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Driving Forces

 

Rob Pion was walking outside at his family’s Buick/GMC dealership on Memorial Avenue in Chicopee, and used the view to put things in perspective for this industry as a trying, but not altogether terrible, year comes to an end.

“That’s basically the new-car inventory,” he said, pointing to a long single line of cars along the front of the property, noting that he was exaggerating, but only slightly.

Indeed, inventory remains an issue for almost all dealers in this region as manufacturers struggle to catch up after weeks, if not months, of shutdown at the factories. And matters are worse for GM dealers, said Pion, the third-generation principal of this venture, because of the lengthy strike at that corporation in 2019.

But aside from supplies of new cars — and things are getting slightly better on that front as well, as we’ll hear — the picture is brightening somewhat for auto dealers, and a sense of normal is returning, at least in some respects.

Or a new normal, if you will.

Indeed, Pion said the pandemic has effectively served to speed up the pace of change within the auto industry when it comes to doing things remotely and moving away from those traditional visits to the dealership to look at models, kick the tires, and even drop off the car for service.

Rob Pion

Rob Pion says inventory remains an issue at his dealership, and it will likely remain that way into the new year.

“There are experts out there saying that we moved forward 10 years in three months when it comes to internet purchasing, out-of-state deliveries, and people doing 98% of the deal over the phone or the internet,” he told BusinessWest. “And that sounds about right.”

Carla Cosenzi, president of TommyCar Auto Group, which operates four dealerships (Volkswagen, Nissan, Hyundai, and Volvo), agreed. She said the pandemic has certainly made online buying, as well as vehicle pickup and dropoff for needed service, more popular, and these trends will have staying power, especially as the number of COVID-19 cases rises again.

And while it was a somewhat tumultuous year, especially when it came to inventories of both new and used cars (and the prices of the latter), it wasn’t really a bad year for many dealerships — and certainly not as bad as things as things looked in March and April, when some dealerships actually closed and all others were seeing business come to something approaching a standstill.

“We’re actually on track for what our plan was 2020, even with what happened in March, April, and May,” said Peter Wirth, co-owner with his wife, Michelle, of Mercedes-Benz of Springfield, quickly noting a few caveats to that assessment. “Some things moved around a little — more used cars and fewer used cars based on supplies — but overall, as I said, we’re on track for where we wanted to be as a dealership.”

Cosenzi concurred. “Given the circumstances and what happened, we feel really good about how we finished in 2020,” she said. “When you look back to how everyone was feeling in March, we feel really appreciative of how we finished the year.”

‘Normal’ also applies, to some extent, to end-of-year, holiday-season sales, said those we spoke with, adding quickly that smaller inventories will certainly limit how many cars, trucks, and SUVs will be sold, including to businesses looking for tax incentives — although demand is certainly there.

But those end-of-year sales, such as Mercedes’ annual Winter Event, are happening, and they are bringing customers to the ‘dealership,’ literally or figuratively.

“It’s like a cherished piece of normalcy,” said Wirth. “People see that the Winter Event is happening, that the deals are out there. I feel like both our customers and our team are enjoying the fact that there’s a normal, busy holiday-selling season — so far, at least.”

He made that statement toward the middle of December, and that tone reflects a degree of uncertainty that still prevails in this industry and most all others as well.

Peter and Michelle Wirth

Peter and Michelle Wirth say their Mercedes-Benz dealership managed to hit most of the set goals for 2020 despite the pandemic.

Indeed, while it’s easy to reflect on 2020, projecting what will happen in 2021 is much more difficult, said those we spoke with. Generally, there is optimism — or guarded optimism, which is the popular phrase at this time of year, and this time in history especially — but still some concern.

Overall, those we spoke with said trends and sentiments that took hold in 2020 — from less reliance on public transportation and services like Uber and Lyft (fueled by pandemic fears) to people gaining more comfort from (while also putting more resources into) their vehicles — should continue in 2021, and that bodes well for the year ahead.

But, as this year clearly showed, things can change — and in the time it takes for one of these new models to go from 0 to 60.

 

Changing Gears

Looking back on 2020, the dealers we spoke with said it was a trying year in many respects, and, overall, a time of adjustment — for both those selling cars and buying them — because of the pandemic.

Many of those adjustments involved the purchase or leasing process, with much of it, as noted, moving online. But the pandemic also forced most car manufacturers to shut down for weeks or months, eventually leading to those half-full (if that) lots at the dealership that became one of the enduring, and very visible, symbols of the pandemic.

Thus, instead of going to the lot and picking out what they wanted, as they had become accustomed to doing for years, many more customers had to factory-order their vehicle and wait, usually several weeks, for it to arrive. This meant extending leases in some cases, said Wirth, adding that the factory-ordering process took longer, in general. Overall, he noted, customers and his dealership adjusted, and there wasn’t a significant loss of business.

“Given the circumstances and what happened, we feel really good about how we finished in 2020. When you look back to how everyone was feeling in March, we feel really appreciative of how we finished the year.”

That’s because demand was consistently high, for a number of reasons, starting with some pandemic-fueled reliance on the family cars — yes, even as people were driving less, and considerably less in some cases — and a greater desire to take care of that car or trade up, something made more feasible and attractive by everything from incentives from the manufacturers to stimulus checks from the federal government, to the fact that people weren’t spending money on vacations or many other things.

Indeed, Michelle Wirth said 2020 was a year of greater appreciation for the car, and a time when many chose to focus on, and put money in, their homes, their cars, or both.

“There was a point in time during all this when your vehicle was probably the only recommended mode of transportation available to you,” she explained. “And if you chose, for whatever reason, not to have a car for a long time, suddenly, you felt you needed one.

“And if you had one, and it wasn’t as safe or new or nice as you might like, you did something about that,” she went on. “It was the same with home improvement — people were looking around and saying, ‘I didn’t spend much time here before. Now I do; I need to do something.’ The same with their car.”

Cosenzi agreed. “We saw many people reallocating their household budget,” she said. “We saw the majority of the people who shop our brands put their money in their houses and their vehicles, and also feel more like they had to rely on their vehicles, now more than ever.”

Elaborating, she said — and others did as well — that this sentiment applies to both service (taking better care of the car currently in the driveway) and buying or leasing something new or newer, more reliable, and in some cases lighter on the monthly budget.

Indeed, some manufacturers have been offering unprecedented incentives — Cosenzi noted that at least one brand is offering no interest for 84 months — and many of those still employed and with stimulus checks in hand soon eyed new or used cars as rock-solid investments.

“People were saying, ‘I can upgrade my car and get a lower interest rate; I can have a newer car that’s under warranty; I can pay less in interest in the long run and maybe lower my payment,’” she explained. “There are a lot of people who weren’t working or nervous about not working, that were taking advantage of the stimulus and really took that to make decisions about how to allocate their income.”

The problem is that supplies haven’t been able to keep up with demand — for most of this year and on most lots, anyway.

 

Keep On Truckin’

Which brings us all the way to back to Rob Pion pointing at that single line of new cars at his dealership. He said inventories have been consistently low and are due to remain that way. And when vehicles do arrive on the lot, they’re either already spoken for or not on the lot for long, especially when it comes to trucks, the pride of the GM line.

“We’re preselling vehicles at an unprecedented rate — the vehicles are sold before they hit my lot,” he explained. “Typically, people just want to come in and see them: ‘give me a call when it gets here.’ Now, they’re ‘here’s my deposit, call me when I can pick it up.’

“I don’t have any pickup truck inventory,” he went on. “So any businesses looking to make those year-end purchases for tax writeoffs … that’s just not happening this year because there’s little or no availability for them when it comes to that type of vehicle.”

Still, overall, dealers are reporting that the parking lots are more full than they have been.

Peter Wirth said supplies have been steadily improving at Mercedes-Benz, and in the meantime, between the stock at the Chicopee location and a sister dealership in New York, most customers have been able to find what they’re looking for or factory-order it.

Cosenzi, meanwhile, said inventory levels have “balanced out” at her dealerships, and there are now adequate supplies for what she hopes will be a solid end-of-year run.

As for what has been a crazy year for the used-car market, where at times vehicles were difficult if not impossible to find and prices skyrocketed, some normalcy is returning to that realm as well.

“As quickly as it went up, the market is perhaps just as quickly coming back down,” said Pion, adding that, overall, it’s been ultra-challenging for dealers to not only get used cars but cope with the fluctuations in that market — from when the bottom dropped out back in the spring to when prices soared during the summer, to the state of relative uncertainty that exists now.

Peter Wirth agreed that it’s been a bumpy road when it comes to used cars — for a time, he had one employee who did nothing else but try to find vehicles to buy — but said some stability has returned.

“We have roughly 75 used cars in stock,” he noted. “It took us a while to catch up on inventory, just because sales were really good on pre-owned cars all year, so while we kept buying more cars, we sold them right away. It’s taken us until now to find more cars so we replenish supplies. And it’s not just about buying cars — you want be selective and find the right cars.”

Looking ahead … well, while people can do that, it’s difficult given how many unknowns dominate the conversation, regarding everything from pandemic spikes to vaccines to new- and used-car inventories.

“The vaccine is a positive, people not wanting to depend on public transportation or ride-sharing is a positive, and the incentives and low interest rates are positives,” Cosenzi said. “But we can’t be in denial that there is still a virus out there and people are being more cautious than ever before.”

But while question marks remain for the year ahead, the consensus is that 2020 was, overall, not as bad as it could have been, and that a sense of normal — if perhaps a new normal — has returned.

 

George O’Brien can be reached at [email protected]

Road Game

Coming of Age

Editor’s Note: This is the second installment of a new series for BusinessWest — car reviews of a sort. These are first-person looks, and some commentary, about some of the vehicles — and issues — that are, let’s say, in the news.

The author found driving the Stinger to be, well, an adventure.

When last we left our heroes — yes, I’m a huge Rocky & Bullwinkle fan and still have a ‘WhatsamataU?’ T-shirt (oldest thing I own) — we were talking about how no one’s driving cars anymore and SUVs now rule the earth.

While that’s an exaggeration (and Bullwinkle loved to exaggerate), it’s not far from the truth. SUVs are the big sellers, and cars are taking, well, a back seat.

These days, people need a good reason to drive a sedan, or several of them. Which is a nice way to segue to the Kia Stinger, the coolest, baddest sedan you’ve probably never heard of. Truth is, you’ve probably seen one and gone ‘what the heck is that?’ You could answer your own question if you, or the car in question, happened to be moving slowly enough to see the word ‘Stinger’ or the Kia logo. Or you were at a red light. It’s probably the latter, because the Stinger doesn’t move slowly. But we’ll get to that later.

Let’s get back to that ‘never heard of’ part. There are reasons for that.

First off, they don’t make many Stingers — it’s a specialty car of sorts and certainly not a big seller. Secondly, it’s made by Kia, which, although it’s made some serious strides in recent years, is still … Kia, a relative newcomer known mostly for making solid, economical cars with lots of value.

And that’s being kind. The company had a reputation, just like Hyundai did 20 to 25 years ago and Honda and Nissan (yes, I know, it was Datsun back then) did 40 to 45 years ago for making practical but uninspiring — and, yes, cheap, cars. Those brands grew up, and Kia has as well.

“It’s a wonderful vehicle — we’ve received a lot of positive response for it; most of the time, when we get them in, they sell out within 48 hours.”

The Stinger provides all the evidence you need, but there’s plenty more, said Mike Spanilo, general manager of Balise Kia in West Springfield, adding that the new Telluride, an in-demand, mid-sized SUV, is certainly making people rethink what ‘Kia’ means.

“It’s a wonderful vehicle — we’ve received a lot of positive response for it; most of the time, when we get them in, they sell out within 48 hours,” he said, adding that Kia now has a deep lineup of cars and SUVs that attract area buyers in all age groups.

Spanilo, who has been with Balise for more than 20 years now and sold GM and Chrysler products most recently, said he came to Kia with some preconceived notions that he soon realized were quite dated.

“My perspective on this, coming from two American-made brands, is that I was pleasantly surprised at what I found when I got here — because I had never driven a Kia before I got here,” he said. “If you’ve gotta sell ’em, you’ve gotta like ’em, and that has not been a difficult thing for me to transition to; this brand has definitely come a long way.”

Looking Sharp

All this brings us to the Stinger, and also … Jose Perozo, a sales associate at Balise Kia, whose story sounds a little like that of Victor Kiam. Sort of.

You remember him — probably. Maybe not. He’s the guy who owned Remington shavers and, later, the New England Patriots — thankfully, not for very long; one of his teams went 1-15. Anyway, the line he used in his commercials for Remington was, “I liked the shaver so much, I bought the company.”

The Stinger blends concept-car looks with performance and value.

Perozo bought a Kia a few years back and liked them so much he went to work selling them. And while selling them, he absolutely fell in love with the Stinger. So much so, he bought one.

Coincidentally, he was bringing his home just a few hours before he took this writer along for a ride — not in his car, but the other Stinger on the lot.

To say that he could barely control his excitement would be an understatement. Every time he accelerated, and every time he thought he saw a Camaro, Mustang, or Charger driver looking over in what he perceived to be envy, you could see some discernable pride in ownership.

And that speaks quite loudly and effectively not only for this model, but the whole Kia lineup.

You don’t have to put the Kerwood Derby on your head (best Bullwinkle plotline ever; Google it) to know that Riverdale Street isn’t a good stretch for test-driving a car. There’s a ton of traffic, red lights that stay red for an hour or two, and long stretches where you have to go in the direction opposite from the one you want to in to get where you want to go.

Fortunately, a U-turn and a few of those lights later, you’re on that stretch of Route 5 that includes the North End, Memorial, and South End bridges, where the Stinger can begin to show what it can do. And after a quick trip over the last of those bridges and onto I-91, you can really get the idea.

The Stinger GT2 we drove ($51,000 fully loaded; top of the line) has a twin-turbo V-6 that delivers 360 horses and goes from zero to 60 in about 4.7 seconds. Drivers can choose a number of ‘modes’ for travel, or the car can pick one itself. These include ‘economy,’ ‘comfort,’ ‘smart,’ and ‘sport.’ The last of those options is obviously the most fun.

As Perozo punched the accelerator while in sport mode, the Stinger showed off its considerable straight-line speed, which is just one of its many positive traits. Others include the exterior design — it has concept-car looks — decent amounts of handling and comfort, optional all-wheel drive, and the requisite bells and whistles in the infotainment category — Apple CarPlay and Adroid Auto are standard.

While the Stinger has many of the safety features available on luxury brands — and even some non-luxury brands — today, it doesn’t go overboard, if you know what I mean.

And the trunk even passes the golf-club test, which, as we all know, is what the experts look for when scoring a vehicle. Forget those JD Power awards — can you get the golf clubs in the trunk?

And there’s something else. While the Stinger has many of the safety features available on luxury brands — and even some non-luxury brands — today, it doesn’t go overboard, if you know what I mean.

(Warning: old-man rant coming!) If you don’t know what I mean, cars that will alert you when to brake or if there’s a vehicle in your blind spot are fine, for the most part. Cars that flash the speed limit for the road you’re on and then make it blink on and off when going above it, and cars that not only alert you if you’re drafting from the center of your lane but yank you back to center, well … I have people yelling at me and telling I’m doing something wrong all day long; I don’t need the car to do that, too.

The Stinger doesn’t do any of that. What it does is almost defy categorization. It’s a luxury car, but not like most. It’s a performance vehicle, but not like most. It’s a muscle car (well, sort of, but not really) that’s not like most. And it can compete with cars in all those categories. It isn’t inexpensive — the entry-level, four-cylinder model is priced at $34,000 — but that’s far less than most of the luxury brands it competes against, and there is considerably more value.

Kia has indeed come of age, and the Stinger is just one of the models that makes this clear.

Speed Thrills

You’re wondering about that Kerwood Derby thing, aren’t you? See, there was this guy on Candid Camera (yes, from the early ’60s, I know), a co-host of sorts named Durwood Kirby who was bland and, quite frankly, dumber than a bag of hammers. The makers of Rocky & Bullwinkle spoofed the name in an episode all about a derby that had magical powers and could make its wearer the smartest person in the world. Guess you had to see it.

If you did, you’re getting old; you need to feel younger. Test driving a Stinger will certainly help.

As for this series of car reviews, in the true spirit of Rocky & Bullwinkle, tune in next time, when ‘O’Brien Vettes a Chevy,’ or ‘O’Brien takes on all Challengers.’

George O’Brien can be reached at [email protected]

Sections

Driving Change

General Manager Mike Filomeno

General Manager Mike Filomeno

The modern auto dealership — marked by drive-in service areas, well-appointed waiting areas, and high-tech touches — have become standard in the industry, and Ford demands no less of its showrooms. Marcotte Ford, with a 50-year history on Main Street in Holyoke, was especially in need of such a makeover, and the family that owns it is set to unveil its new HQ this summer, bringing the company’s look and feel firmly into the 21st century.

When Marcotte Ford reopens its dealership on Main Street in Holyoke this summer — after a year spent in temporary digs across the street — it will be the culmination of two complementary visions: Ford’s on one hand, and the Marcotte family’s on the other.

“It’s been a long, long road to get where we are today,” said General Manager Mike Filomeno. “Obviously, Ford has a rebranding and a new look that they want, to refresh the whole facility and make it more customer-friendly. Then there are all the touch points we’re going to have — a brand-new shop, all-new equipment, indoor delivery areas for the customers to pick up their cars, all kinds of new technology to make the experience more user-friendly.

“It’s like a McDonald’s,” he went on. “Do you want to go to the old McDonald’s or the brand-new one that has the wi-fi and the TVs and the multiple drive-thru lanes? That’s the philosophy. People want to go someplace that’s new. They want new technology and a new experience.”

What both Ford and the Marcotte family are looking for is the fulfillment of two goals that seem contradictory, but really aren’t, and are being reflected in dealership remodels across all brands: to make it easier and quicker for customers to get in and out when buying or servicing a vehicle, but also making the space more welcoming during the time they have to be there.

To get to that point, Marcotte has spent the last year doing business across the street, in the former location of Gary Rome Hyundai, which relocated to a much larger lot on Whiting Farms Road in 2016.

It’s been cramped, Filomeno said, but much better than working out of temporary trailers. To ease the burden on a smaller service area, Marcotte has sent much of its heavy-duty repair work down the street to its commercial truck center, which opened in 2015.

“When this became available, we ended up buying this place,” Filomeno said. “That was perfect timing. It was empty for a while, and we reached out to Gary Rome and talked to him about renting some space, and he needed to do something as well. So we made a deal last June to move over here.”

Come this summer, the year spent in cramped quarters will have been worth it, Filomeno said, with the opening of the 40,000-square-foot, $8 million facility, which will include a 24-bay service area, including a dedicated space for vehicle inspections. As for the former Rome location, it will become Marcotte’s commercial-sales location, bringing to four (along with the neighboring Paper City Car Wash) the number of Marcotte-owned properties along a half-mile stretch of Route 5.

“We haven’t had that prime A location in the automotive world, as far as being on Riverdale Road or King Street in Northampton, where there are multiple franchises and people can go to one from another,” he noted. “But we have been a destination dealer, and we’ve done that by taking care of the customers, having good employees, and going the extra mile for people.”

New Look … and Taste

Doing all that will be easier in the redesigned Marcotte Ford headquarters, which reflects the types of features Ford demands in all its new stores, Filomeno said.

“They want to have the branding in the façade out front, and they want all the touch points to be user-friendly,” he explained. “We’ll have the indoor drive-through, where you bring in your car and drop it off, and service will come out to you to write it up. We’ll have a customer waiting area with a big TV there, and wi-fi hotspots where they can sit while they’re in the customer lounge.”

On the service side, customers have long been able to get a loaner vehicle when they bring their car or truck in for service, and Marcotte will continue with that service, he added, while employees will appreciate the state-of-the-art, climate-controlled shop decked out with new equipment.

The company is especially excited about LugNutz Café, a restaurant that existed in the former building, but will be significantly expanded in the new one.

LugNutz Café initially served breakfast two days a week for employees and customers, but will be expanding to breakfast and lunch six days a week, featuring sandwiches, wraps, soups, pizzas, and breakfast items like omelettes.

“Bryan came up with the idea, and people loved it,” Filomeno said. “With all the employees we have all day long, come lunchtime around here, we have Chinese, pizzas, and grinders being delivered here, or people going out for food. Now they’ll be able to eat right here. That’s another good service that people will enjoy — I think it’ll be a wow factor.”

Company President Mike Marcotte said customers will appreciate the new touches, from the drive-through service lane to interactive screens in the sales offices to help them quickly access information.

Marcotte expects to unveil its 40,000-square-foot renovation in August, followed by a September grand opening.

Marcotte expects to unveil its 40,000-square-foot renovation in August, followed by a September grand opening.

“The building was 50 years old, and we’ve added on, but now it was time to do a refresh,” he said. “It’s definitely more customer-oriented, with better flow and more technology.”

Filomeno said the dealership aims to be different because other Ford dealers have a similar look. “So we’re making it our own with the LugNutz and some of the other things we’re doing to make ourselves stand out.

“It’s more than the tile and furniture Ford wants,” he went on. “We’re looking forward to some new ways to do business, taking care of the customer, getting them in and out of here, both on the service and the sales side. People want to come in and buy a car in an hour and get through it. They don’t want to wait four hours. So that’s what we’re migrating toward.”

Marcotte agreed. “We feel like buying a car should be a fun experience, not stressful, even though it’s most people’s second-biggest purchase after their house,” he said.

It’s also a different sales experience than it used to be, thanks to the internet. “People do a lot more research before coming in, before they even contact us,” Marcotte noted, noting that the visit is still crucial, because vehicles today are so loaded with high-tech safety equipment and other features that customers still want someone to demonstrate everything they might be able to utilize.

The new facility will reflect those high-tech advances as well, Filomeno said. “Our vision is to have the grand opening come the fall, once we’re fully established, and have a soft opening around August. We have to get in there and get everything working.”

Family Legacy

Marcotte’s grandfather, Al, opened his namesake dealership in 1961 at a different site in Holyoke before moving to its long-time location on Route 5 in 1967. Bryan eventually joined the team, followed by Mike a generation later. Today, the dealership employs a number of other family members, including Filomeno, who married into the Marcotte clan.

It’s a company with not only family ties, but deep community roots as well, Filomeno said, noting that Marcotte Ford has supported a number of local nonprofits over the years, from Kate’s Kitchen and Providence Ministries to the baseball teams customers’ kids play on.

“You can only do so much, but we try to be as generous as we can because it does make a difference,” he added. “You’ve got to support the community you work in. So we’ve made a conscious effort to make sure we do that on a regular basis.”

With a 56-year history behind it, Marcotte said, the dealership felt it was past time to make the changes almost ready to be unveiled across the street.

“We’ve been looking at this for several years,” he said, noting that it’s a good time to reinvest, with sales — particularly the truck business and the commercial side — booming.

“Business has been good. We’re just always trying to find ways to find more business,” Filomeno noted, adding, however, that he’s unsure how people will react to Ford’s decision to discontinue some lines.

“That’s a challenge for us, because people are asking why and what’s going on, but I think they’re trying to get rid of some of the less-profitable cars and concentrate on more of the profitable items and come out with some new products. There’s a new Echo Sport, we’re going to have new Rangers, some new Broncos coming in.”

Meanwhile, people’s driving habits are different than before, with younger drivers more willing to rideshare and use public transportation — not to mention the prospect of autonomous cars, which may someday significantly impact people’s decision to even own a car. So it’s important, he said, for dealers and manufacturers to anticipate possible trends while continuing to focus on what they do well.

“There’s some uncertainty as far as what’s coming, but our bread and butter has been the truck line and SUV line, and that has been very strong,” he said. “There have been other changes in the industry, too. Right now gas is going up a little, and interest rates are going up a little. People have been spoiled for years, when we gave them 2%, 1%, 0% financing, and, that’s not always there now. You have to just adapt.”

With 142 team members across all facets of the company, there’s been plenty of adapting and moving around while the main site has been given over to construction over the past year, Marcotte said, adding, however, that employee morale has remained high during the transition.

That’s important, Filomeno added, because, while the internet has helped the company sell outside the local market, it’s still a company built on customer service.

“Although Ford has got a great product, you can’t say you’ll never have a problem with a car,” he told BusinessWest. “But if you do, we try to make that experience as positive as we can. That’s been the forte of our business model all along.”

Joseph Bednar can be reached at [email protected]