At NADA 2020 in beautiful Las Vegas, host Jim Fitzpatrick was joined by Forrest Heathcott, President of the JM&A Group, a comprehensive dealer solutions company that has been in the industry for over 40 years.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: JM&A, you guys are out there leading the cause for dealers and increasing profits for them continually. Congratulations, I understand you just finished a phenomenal year once again, right?
Forrest Heathcott: We had a great year. Far better than expected.
Jim Fitzpatrick: Really? Wow.
Forrest Heathcott: Our dealers sold more contracts than they’ve ever sold in the history.
Jim Fitzpatrick: That’s fantastic.
Forrest Heathcott: The PVRs are bigger than ever.
Jim Fitzpatrick: What do you attribute that to?
Forrest Heathcott: Focus.
Jim Fitzpatrick: Focus, yeah.
Forrest Heathcott: It’s absolute focus on the dealers’ part. The shrinking margins on the front end have put more focus on-
Jim Fitzpatrick: Which we’re going to talk about today, because that’s-
Forrest Heathcott: … providing the customers this service, and they’re doing a great job with it.
Jim Fitzpatrick: Yeah. You guys been around what? 40 years, I think. You celebrated your 40th, yeah.
Forrest Heathcott: JM&A, 40 years. Well, we’re in our 41st year. JM Family Enterprises in their 51st year.
Jim Fitzpatrick: Wow. Wow. Nobody knows the car business better. So as customer preferences continue to evolve, as we know, how’s JM&A refining that and helping from the traditional approach with dealers that they’re trying to navigate through?
Forrest Heathcott: We are constantly trying to give our dealers opportunities to do things differently. They desire to do things differently in a much more digital way, much more seamless.
Jim Fitzpatrick: Sure. That’s right.
Forrest Heathcott: We’re supporting that effort. One of the things that we’ve done in the last year, about two weeks ago, we delivered our 1000th vehicle virtually.
Jim Fitzpatrick: Wow, very cool.
Forrest Heathcott: The PVRs are outstanding.
Jim Fitzpatrick: Yeah, that’s fantastic.
Forrest Heathcott: So now we need to find scale for our dealers in that regard, because they like it.
Jim Fitzpatrick: That’s right. Digital retailing is here to stay.
Forrest Heathcott: Definitely.
Jim Fitzpatrick: Every dealer that talks about it, talks about it in a nervous sense, right? Like, “Uh-oh, we know it’s coming down the pike.” It seems like the dealers’ kids, the next generation if you will, are much more in tune with it. To say, “Mom and dad, this is something we got to deal with.” Right?
Forrest Heathco…: I heard yesterday, John Bergstrom, who is not a millennial,-
Jim Fitzpatrick: No, he’s not. That’s right.
Forrest Heathco…: … he’s been out there for a long time, talk about the focus. It doesn’t matter where you are in your dealer journey, you’re focused on getting there quickly. And big believers at all levels.
Forrest Heathco…: Now, I would say three, four years ago, it was the millennials and some of us older pros were thinking,-
Jim Fitzpatrick: I mean, —
Forrest Heathco…: … “Maybe not.” But I can assure you right now everybody in this building is focused on it.
Jim Fitzpatrick: So for the last five or six years, or maybe 10 years even, there’s been this talk about margin compression in the industry. Every dealer just gets a pain in their back when they hear how low the margins are going on new cars. Now even on used cars, because it’s such a competitive market out there.
Forrest Heathco…: Yes.
Jim Fitzpatrick: And with the SAAR now maybe coming in from what Cox Automotive says, maybe 16.6, to make money is a real-
Forrest Heathco…: 16.8, hopefully.
Jim Fitzpatrick: Yes, I know. Exactly. But now to make money on these cars is very difficult. What are you doing at JM&A to help dealers make a little bit more money on these cars and be able to have a good year?
Forrest Heathco…: Yeah. A couple of things that we’re doing. One is, we’re working with, we have a lot of large used car players that we also support. We’re helping them get a little more domesticated and process oriented in their operations, which they very much desire to do, and they’re making those investments. The days of a used car retailer looking much different than a new car retailer are pretty much over. They are more on the leading edge. They’re getting to be more on the leading edge quicker, because they have less OEM things to deal with. So we’re trying to help them execute on those types of plans. Obviously, they’re eager for product, and we have great products. So we’ve been able to do that, and they’re eager for training, and that’s a focus of ours.
Forrest Heathco…: One of the other issues that we’ve been developing and working on is we have fixed operations consulting, which we spent the past year in a transition year getting our team up to speed and train and develop to go out and help the dealers in a more precise way with their needs in fixed operations.
Forrest Heathco…: Additionally, we’re helping dealers on their talent management. We’re helping them hire and find platforms that they can use within the store to have stronger HR presence and hire the right people and retain them. As you know,-
Jim Fitzpatrick: That’s the key.
Forrest Heathco…: … the turnover has been the biggest-
Jim Fitzpatrick: I know.
Forrest Heathco…: … challenge.
Jim Fitzpatrick: Can’t get our hands around that, yeah.
Forrest Heathco…: Anywhere from a half a million a year is what a dealer spends in this, to $1.5 million depending on the size, per rooftop.
Jim Fitzpatrick: It’s crazy.
Forrest Heathco…: So we are working on giving them some talent solutions that will help them in that way, which we really think helps us.
Jim Fitzpatrick: That’s huge, especially for the smaller dealer that doesn’t have and they really can’t afford that training mechanism. I mean, you guys have it with the training center and the performance center, right?
Forrest Heathco…: We do. Yeah.
Jim Fitzpatrick: That’s a huge-
Forrest Heathco…: Our Performance Development Center is really one of the best things we have going, that gets probably the least amount of focus on the outside, because everybody knows the JM&A brand. But there’s a really talented team, and the curriculum there is vast.
Jim Fitzpatrick: Yeah, for sure.
Forrest Heathco…: We’ve been developing it for many, many decades at this point.
Jim Fitzpatrick: That’s right. I interviewed Jeff Dyke recently and talked about EchoPark, and we talked about partners making it happen. He said, “Partners like JM&A I couldn’t do it without.”
Forrest Heathco…: Jeff Dyke has given us more credit than we deserve. He’s a great partner.
Jim Fitzpatrick: Great. He’s the real deal.
Forrest Heathco…: Sonic is great. He really is. He mentions us more than we would ever …
Jim Fitzpatrick: That’s great.
Forrest Heathco…: We appreciate it so much. But one of the things that Jeff has done as a leader is his team works well with our team, and that’s why it works.
Jim Fitzpatrick: Yeah, absolutely.
Forrest Heathco…: We have the same type of thing with Hendrick Automotive and Asbury. When the teams work together, it’s amazing how far down the road you can get.
Jim Fitzpatrick: No question about it. No question. So what can we expect in the next five or 10 years and beyond? Where do you see the industry going? I know it’s a loaded question.
Forrest Heathco…: I think the digital thing is coming on-
Jim Fitzpatrick: Yeah, in a big way.
Forrest Heathco…: … faster than … Not fast enough for us, but faster than people would speculate. I think that’s going to happen. I think all the things that you hear about autonomous vehicles and subscription services and all that are not moving as quickly as some had anticipated a year ago or two years ago. So that gives a little more runway to prepare for that. But I think in that whole scenario, without the dealer, I don’t believe it works.
Jim Fitzpatrick: I know.
Forrest Heathco…: They need that point-
Jim Fitzpatrick: I agree.
Forrest Heathco…: … of technical support-
Jim Fitzpatrick: I agree.
Forrest Heathco…: … to make that thing work.
Jim Fitzpatrick: I agree. Forrest Heathcott, it is always a pleasure, because you know the business better than anybody.
Forrest Heathco…: I wouldn’t go that far.
Jim Fitzpatrick: Well, you’re a great partner, I know, at JM&A for so many dealers nationwide. We have had them on CBT News, and they’ve mentioned you more than Jeff Dyke has. Thank you so much. I really appreciate it.
Forrest Heathco…: Thank you very much.
Jim Fitzpatrick: Absolutely.
