metro
The Real Deal
Jeffrey Tamaroff talks about the changes
in cars, customers and the auto business.
Allan Nahajewski
Contributing Writer
effrey Tamaroff has been in the
car business his entire adult life. "I
started cleaning cars and cleaning
the shop when I was in high school',' he says.
Today, he is the president of two dealerships
— Tamaroff Honda Nissan on Telegraph in
Southfield and Jeffrey Nissan Honda Acura
Kia on Gratiot in Roseville. The Tamaroff
family has owned the Southfield dealership
since 1969.
"My dad sold Buick and Opel models',' he
recalls. "Back then, if you had Buick, you had
Opel. So in order to help sell Opels, he started
selling Hondas. They were tiny back then,
and just about nobody was buying imports.
"Look what ended up happening."
On the eve of the 2012 North American
International Auto Show in Detroit, we asked
him to tell us what auto buyers can expect in
the coming year and beyond.
Q: 'What can we expect to see at this
year's auto show?
A: I'm on Acura's national dealer advisory
board. We just had our meeting two weeks
ago. They showed us everything that's corn-
ing. We have a brand new RDX (Acura's corn-
pact crossover SUV) that will be announced
at the show. It will come out in the spring
as a 2013 model. It's a total remake and a
very nice transition from the current model.
They're also going to announce a brand-new
car called the ILX, which will be built off
the Civic platform in Indiana. And they're
bringing back the NSX, which will debut at
the Detroit show as a new super car. Its going
to be class-leading in fuel economy, horse-
power, everything.
Nissan has an all-new Altima (mid-size
j
2012 Automotive
Industry Forecast
The following is excerpted from Booz
& Company's 2012 Automotive Industry
Perspective:
F
or U.S. automakers and suppli-
ers, the past year can best be
described as 12 months of mixed
results, leaving unanswered questions
about the future direction of the industry.
In 2011, U.S. light car and truck sales
will exceed 12.5 million, a nice bump
from 11.6 million in 2010 and 10.4 mil-
lion in 2009. And though the most opti-
mistic analysts forecast that U.S. vehicle
sales will rise to more than 14 million in
2012, that's a far cry from 17.3 million at
12 January 5 - 2012
iN
car) coming out in the spring — a 2013
model. And they have three models that are
going to come off their all-electric car.
Across the board, you can expect to see a
lot of new products at the show.
Q: Anything else in particular that we
should check out?
A: Definitely, the Honda CR-V (compact
crossover SUV). It was just named as a final-
ist for Truck of the Year. We've just celebrated
40 years with Honda, and its amazing how
far they've come. Every model Honda makes
is on the safety list with a five-star crash rat-
ing. And just about everything Honda builds
is made right here in the United States. They
make lawn mowers, generators — they're
even making jets in North Carolina.
Q: Are you finding a lot of customer
interest in the electric vehicles?
A: None. It could be related to our climate
and our cold weather. It's a niche market.
But I expect we'll be seeing more emphasis
on electric soon. I've got proposals to put in
charging stations at both of our stores before
next summer.
Q: How have consumer tastes changed
over the years?
A: They change with the gas prices. You
can track it. When gas went over S4 a gallon,
we saw a big spike in sales of Honda Civics
and those types of models. But now every-
thing is becoming a lot more fuel-efficient.
For example, the big new Honda Pilot, which
is an eight-passenger SUV, has class-leading
fuel economy for something that size —18
mpg city/25 mpg highway, which isn't bad for
a big vehicle. Same for the Honda Odyssey
minivan, which provides great fuel economy,
safety and value. That's one thing about
Honda — it's a great value proposition. The
residual values hold up for so long.
the turn of the millennium.
Last year's U.S. sales figures might
have been higher if not for the tsunami
and earthquake in Japan and flooding
in Thailand, which forced Toyota, Honda
and, to a lesser extent, Nissan to curtail
production in virtually all of their assem-
bly plants around the world.
Auto sales growth is far more rapid
in emerging nations such as China and
India, with average annual sales gains
since 2001 of 23 percent and 15 percent
respectively.
All of this should be good news for
U.S. automakers, which have restructured
their operations to be profitable at lower
volumes in the U.S. General Motors, Ford
and Chrysler gained market share at the
expense of the Japanese manufacturers,
and the Detroit Three have now posted
There's a lot to like about
the 2012 vehicles, says
dealer Jeffrey Tamaroff.
Q: In terms of resale value and the
overall cost of vehicle ownership, is there
an optimum number of years that some-
one should keep a vehicle?
A: It depends on a lot of factors. When we
had the Cash-For-Clunkers program to help
stimulate the economy, that took so many
cars off the road. And when the tsunami
hit Japan in 2011, it created a real shortage.
Some of the critical components came from
a couple of plants in Japan. It affected every-
body, but it affected Honda and Toyota the
most. That caused a shortage of new cars,
which caused a spike in pricing for used cars.
And it stayed pretty high so far. Demand for
used cars has increased. Its all supply and
demand.
Q: How would you characterize the cur-
rent state of the auto industry?
A: Ever-changing. People today shop on
the Internet, and then they go buy a car close
to home. I've never seen a business where
everybody knows your prices. They know
exactly what we pay to the penny. And it
makes it so much more challenging, because
some people don't want you to make any
money. Yet you have to pay your employees.
Its not a small investment here.
Q: Would you say the Internet is the
biggest cause of change in your business?
A: Absolutely. But it always comes down to
treatment. If you treat your customers fairly,
they're going to come back. They're not going
to buy from a place where they don't think
they're going to be treated right. And that's
several quarters of consistently strong
operating performance.
Challenges To Be Met
Automakers will also face technologi-
cal challenges. For example, advances in
braking, parking assistance, propulsion,
sensors and other critical areas are bring-
ing us closer and closer to the era of self-
driving automobiles; indeed, Google has
already logged well over 100,000 miles on
its unmanned robotic vehicle.
In urban areas, in particular, these
innovations could improve traffic flow,
provide revenues (through "smart tags"
and traffic congestion pricing) and reduce
accidents through vehicle-to-vehicle com-
munication and coordination.
Meanwhile, vehicle-based mobile com-
munications technology continues to
usually what it ends up coming down to.
Q: How has running a dealership
changed?
A: There are so many more regulations
in the business. Before, we hardly had any.
Today, I can't have a customer's deal on my
desk because of the privacy laws. I could
be subject to fines up to $2,500 a deal.
Then there's the 8300 rule: If customers
pay by cash, we need to make sure they
get reported. There are a whole host of
laws — mostly federal. And there are some
that haven't come on yet, like the (Federal
Trade Commission's) Red Flags rule, which
is so comprehensive and so confusing that
the government hasn't really enacted it yet,
because it doesn't have a grip on all the rules.
I don't know what's going to happen when
that comes out. They don't know the impact
its going to have on small businesses. It's so
disruptive.
Q: What effect does the auto show have
on your business?
A: We do see a spike in interest after the
show. The last week in January is usually a
busy one.
Q: Do you go to the show?
A: Always. I go during the press days.
Q: Other than shopping at your dealer-
ship, can you share any tips with custom-
ers on how to get the best deal?
A: Communicate with your salesperson.
Know what you want. Be honest and upfront.
That's the best way your salesperson can help
you get exactly what you want. fl
produce breakthroughs in voice-activated
telephony, GPS, information and enter-
tainment. For example, GM customers
can now use the automaker's OnStar
(driver communication) and RelayRides
(vehicle location tracking) systems to
rent their personal vehicles to others and
charge fees based on usage.
Clearly, anything that consumers are
willing to pay for, that increases safety
or functionality, or that reduces cost has
the potential to be successful. At the same
time, auto makers must be careful to inte-
grate new technology into vehicles effec-
tively and only when it is well perfected,
or risk adding features that are annoying
or, worse yet, prone to breaking down,
which could negatively affect consumer
perceptions about the quality of the auto-
maker's products. I I