NEXT MEETING: January 18, 2013
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MEETING OF January 11, 2013
Jim Young, Club President, called the auspicious Richmond Rotary Club to order, after which Ralph Hill led the Pledge of Allegiance. Stoney Stonework asked for a moment of silence for “freedom, peace, and justice on earth”. Henry Kelman, gave us the “thought of the day” by providing today’s stock market assessment – it’s up!
Rotarians with Guests
Jim Young introduced and welcomed Larry Maxson, General Manager, and Scott Vickery, General Sales Manager of El Cerrito Honda. Scott is today’s speaker.
John Nicol’s 90th birthday is on January 24th, but there will be a party for him on Saturday, January 19th from 12:00 to 5:00 at his home. Everyone is invited. Hank Covell announced that John is in good spirits although he can’t play poker with the gang anymore.
Again this week there were no birthdays, Club anniversaries or wedding anniversaries to acknowledge.
Happy and Sad Dollars
A housewife called in a plumber to fix the drain in her kitchen sink. While the plumber was working, she asked him how much he charged.
Honda of El Cerrito
Jim introduced Scott Vickery, General Sales Manager for El Cerrito Honda, noting that El Cerrito Honda has a reputation for operating a state-of-the-art, modern car dealership with great customer service.
Scott got his start in the automobile industry nearly 35 years ago when he took a job at a service station outside St. Louis, Missouri that had four gas pumps, two mechanics’ bays, and typically around 5 or 6 automobiles for sale at any given time. If they sold three cars a month the owners figured they’d been successful. Today, El Cerrito Honda sells in excess of three cars per day, and would count it a bad day if they sold no more than that. Scott stated that the auto industry impacts 7 out of every 10 American jobs in one way or another be it through electronics, shipping, parts and materials manufacturing, advertising, healthcare, or a host of other sectors. El Cerrito Honda was purchased in the ‘90s by Mr. Hendrick, owner of the Hendrick Automotive Group based in Charlotte, North Carolina, who over the years introduced a host of “best practices” to the business. These innovations have made El Cerrito Honda a top-notch dealership offering a world class customer service experience and as a result, word-of-mouth advertising has been one of its most important sources of new business.
In 2012, El Cerrito Honda grew by 12% growing from a staff of 100 to 112. It is a culturally diverse organization with eight different languages spoken among its staff members allowing them to serve a wide variety of customers. Last year the dealership sold 1,804 brand new cars and 818 pre-owned cars bringing in approximately $70 million in gross revenues. Revenues comprised $41.3M in new car sales; $17.6M in pre-owned sales; $4.7M in service; and $6.65M in parts. Scott reported that for every car sold approximately $3,000 goes back to the state of California in taxes and fees and that net profit per vehicle is approximately $487. Scott noted that the days of $3-5,000 margins are gone and that to maintain a profitable dealership is a much more difficult proposition in today’s economy.
Scott stated that El Cerrito Honda is proud of the role it has played in the community. They have established a scholarship fund for dealership employees and have contributed funds and volunteer efforts to a variety of community organizations and events including the One World Music Festival; the El Cerrito School District’s “Clothes for Kids” project; the Mira Vista Country Club’s golf tournament fundraiser; and both the Richmond and El Cerrito Chambers of Commerce. They also rebuilt a classic Harley Davidson motorcycle for the Richmond Police Department. They are interested in creating partnerships in the community and are always looking for ways to give back.
In the question and answer period, Scott told the group that the two most significant ways the car business has changed over the years have to do with advances in technology. Most new vehicles have 3-7 computers in them and repairs are almost entirely computer-based. Computers diagnose the problem and tell you what to fix and how to fix it. The other technological change is that approximately 85% of sales are now made via the internet, placing smaller dealerships at a distinct disadvantage if they are unable to fully utilize web-based applications. Scott stated that in terms of quality, American cars stack up just fine against the big Japanese brands, namely Honda and Toyota. When asked about what changes in automobiles we might see over the next five years he noted that there will be more electric cars available but didn’t foresee any major changes in the industry.
Lynn Martin, Scribe