The Loaded Sticker Price

When it comes to import cars, black dealers still find themselves stranded by the side of the road

"I believe Jaguar was ready to give an African American an opportunity in a location they considered to be a good market and where the chances of success would be greater," says Stephens. There are plans to add at least 44 new minority-owned dealerships over the next four to five years. At present, Jaguar has 134 dealers overall.

Sim Fryson of Sim Fryson Motor Co. (No. 70 on the be auto dealer 100 list with $30.4 million in gross sales) says he encountered a "kinder, gentler" Mercedes-Benz in 1994 when he opened Sim Fryson Motor Co. in Ashland, Kentucky. "The first time I applied for a dealership with Mercedes-Benz, I got it," says Fryson, who purchased the dealership from an individual owner but still had to get final approval from Mercedes-Benz. He also carries Honda and Nissan lines, making him the first African American to exclusively carry import cars.

Among Asian auto manufacturers, Honda has in the past year appointed 10 new minority-owned dealerships — at least half of which are African American-owned — to its current total of 1,200 Honda and Acura dealers. Of the current total, 32 are ethnic minorities. At Toyota, of its 1,195 dealers, 47 are ethnic minorities, including 16 African Americans. Four of Toyota’s 174 luxury line Lexus dealerships are owned by ethnic minorities; two of them are African American.

Nissan, which has 1,070 dealerships — 13 owned by African Americans — promises to increase its minority-owned dealerships by 25% (including double its current number of African American-owned dealerships) by the year 2002. To further improve the odds that this will happen, the company has even linked salary/bonus incentives to regional executives’ performance in matching qualified minority candidates with dealership appointments.

One reason why so few minority applicants land actual dealerships is not lack of experience but lack of capital. And unlike the domestics, few of the imports offer financial assistance. Honda Motors, however, is an exception. Through its Dealer Investment Program — an ownership-from-profits program — Honda helps with the purchase and establishment of dealerships for qualified applicants.

"The dealer makes an initial 15% or $100,000 investment, whichever is greater, and Honda finances the rest," explains Barbara Ponce, manager of corporate diversity. "After five and a half years, the dealer can build up enough profits to fully own the dealership," she adds. Lee, however, remains unimpressed by all the diversity fervor and has sworn off the idea of ever owning an import dealership. Instead, he prefers the tried-and-true domestic brands. "I’m all-American when it comes to selling automobiles."

While these changes are bright spots on the horizon, will this new commitment to diversity by import manufacturers continue in light of the consolidation that’s gripping the industry? There are skeptics.

To increase revenue potential and profit, automakers are now paring back the number of dealers — creating a leaner, meaner selling force. Analysts predict that over the next decade, the Big Three will reduce their dealerships

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  • Brian

    This is an incredibly informative article of history of the truth of the auto industry. I am very proud as a minority and a lover of the brand to have the opportunity to be able to work under Mr McGowen’s leadership and tenacity. Truly he is a inspiration to me and a role model for others of similar goals and aspirations. Thank you