Issuu

FALL/WINTER 2021

FUELING THE FUTURE

Sparking electric vehicle sales

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FROM THE PRESIDENT

Change is Coming My Grandpa Dewey, whom I remember well, was born five years before the Wright Brothers’ first flight. That short flight happened just a couple of days after my Grandma Myrtle’s first birthday. Dewey Anderson and Myrtle Kelley were coming of age when Henry Ford installed the first moving assembly line leading to the mass production of automobiles. They had been married just 10 years and my dad was already four when the federal government helped bring electricity to Iowa farms. The internet was invented the same year their youngest grandchild (that would be me) graduated from college. In the span of three family generations, the world not only changed completely; it changed completely repeatedly. It’s happening again. The shift from internal combustion powertrains to the electrification of the world’s automobile fleet is underway. I am not saying that it’s going to be as revolutionary as flight or electricity or the internet—or even that electrification is the final or ultimate solution to powering automobiles—but I am certain that it is going to change the automotive retailing and automotive repair industries. That change may be gradual and it will probably come in fits and spurts. After all, it took some time for today’s aviation industry to develop from that field in Kitty Hawk, North Carolina. Likewise, the pervasiveness of the internet today bears little resemblance to the email read on an amber-colored monitor nearly 40 years ago. Like dial-up modems, today’s electric vehicle may simply be a bridge to a future that we can scarcely imagine.

Quite a bit of time passed between stringing that first Rural Electric Cooperative wire to Grandpa and Grandma’s house and the installation of the mesh wifi system that enables the home security system, laptop computers, and entertainment system that home’s current owners use. The pace of adoption of any new technology varies from location to location and user to user. An affluent urban dweller looking for a second (or third) car may be quicker to buy electric than a rural customer with a longer commute who is looking to buy his only vehicle on your pre-owned lot. I am confident that whenever the customer is ready to try the new technology, Iowa’s dealers will be there to help educate that buyer, facilitate the sale, and keep the vehicle in good repair. The feature story “Fueling the Future” in this edition of Iowa Auto Dealer provides a peek into what’s coming. I hope it will help you and the folks you work with and work for think through how the coming integration of electric vehicles into the marketplace will impact the automotive industry and how you—and your dealership in particular— can continue preparing to meet your customer’s needs and demands in that future. How is your dealership approaching electric vehicles? What’s working? What needs to change as automotive retailing moves forward? I need to hear from you so that the Iowa Automobile Dealers Association can help our industry develop into whatever the future holds.

Bruce Anderson IADA President

Let’s continue the conversation. Call 515.440.7630 or email banderson@iada.com to talk about electric vehicles, the future of the industry, or anything else automotive.

FALL/WINTER 2021

IN THIS ISSUE

Departments 01 FROM THE PRESIDENT

A technological shift is underway.

04 NOTEWORTHY

Catch up with past chairs and get the scoop on scholarships and cool products.

1111 Office Park Road West Des Moines, Iowa 50265 Phone: 800.869.1900

07 FIVE THINGS

CHAIRMAN Matt Brown VICE CHAIRMAN Jon McCoy PRESIDENT Bruce Anderson SECRETARY Dave Wright TREASURER Jim O’Halloran IMMEDIATE PAST CHAIRMAN John Gookin DIRECTOR AT LARGE Tim Godfrey DIRECTOR AT LARGE Danny Wilson HEAVY DUTY TRUCK DIRECTOR Fred Grask INDEPENDENT DIRECTOR J Olesen DISTRICT ONE DIRECTOR Lindsay McGrath DISTRICT TWO DIRECTOR Josh VanNess DISTRICT THREE DIRECTOR Jason Willis DISTRICT FOUR DIRECTOR Carey Kemna NADA DIRECTOR Jeff Weber

10 SHOW & TELL

CPR and AEDs could save a customer’s or employee’s life.

20 Q&A

Dealership consultants share the biggest mistakes they see businesses making.

24 ODDS & ENDS

The 2020 census results offer perspective on the state of Iowa’s franchised dealer network.

TOP PHOTO BY MARCIE KLOMP, TIMES PLAIN DEALER; THIRD PHOTO COURTESY OF BILL C0LWELL FORD; FOURTH PHOTO COURTESY OF MYRA DANDRIDGE

EDITOR Brittany Bungert

Diversity and inclusion is good for business.

Feature 12 FUELING THE FUTURE

The electric vehicle future is coming.

COVER PHOTO

The infrastructure for electric vehicles is growing, with charging stations popping up across the state, including at Jester Park in rural Polk County. PHOTO BY TIM BUNGERT

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NOTEWORTHY

Grab Bag News of note from your association.

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IOWA AUTO DEALER

NOTEWORTHY

Words of Wisdom What is the biggest change in the auto industry since you led IADA? Probably the sheer number of rural dealerships, as much as they have either closed or consolidated. And certainly the presence of the internet has changed everything compared to what it was back in ’98. The way you deal with the customers now, so much of it is over the internet, which was not even heard of when I started. What advice from when you were starting as a dealer is still true today? Take care of the customer. You can’t do enough of that. Earn their trust.

What advice from when you were starting out as a dealer is still true today?

When I was 25 or 26 I thought I knew everything in the whole world. My father and Warren McEleney were having lunch together and invited me to come along. I was pretty busy and pretty important, but I went. Warren sat there pretty quietly. He was a great guy, sort of the godfather of IADA and NADA both. He said to me, “You know, John, you’re going to be a small dealer. You can make yourself so much better by staying involved in IADA. If you’re going to stay involved in this business, you need to stay involved in IADA.” That advice is just as important today as it was then. There’s nothing more important for a small Iowa dealer.

— DEAN BEECHER

1998 IADA Chairman

— JOHN FALB

1984 IADA Chairman

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FALL/WINTER 2021

NOTEWORTHY

Cash for College Cha-ching! Help a student pursuing a career at a dealership by sharing the application for scholarships from the Iowa Automobile Dealers Foundation for Education. As many as 25 $2,500 scholarships will be awarded in the spring of 2022. Applications will be available at iada.com/scholarships beginning December 1, 2021.

Jim Riley of Riley Subaru in Dubuque (left) and Tim Weber of Anderson-Weber Toyota Lincoln in Dubuque present Jared Krow with the L.R. and Iven Weber Memorial Scholarship.

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FIVE THINGS

Five Things from Myra Dandridge NADA’s Executive Director of External Affairs and Public Policy shares what she wants Iowa dealers to know.

Make diversity, equity, and inclusion (DEI) a business imperative as it is good for the bottom line. In general, businesses that embrace DEI are stronger, more successful, and better equipped to serve their local communities. For franchised dealers, this is especially true because dealers must be connected with their customers to thrive in any market. To put this in perspective, ask yourself: 1. What does my customer base look like? Is it different than it was 30 years ago? 2. Does my employee base reflect the community in which I operate? If you want to continue to establish those cherished “customer for life” relationships, your opportunities will increase if your employees and customers mirror each other. Of course, this is not a static analysis. A dealership workforce should keep pace with the everchanging community where the dealership is located. Dealerships

that continue to lean into diversity and inclusion can take advantage of significant opportunities to sustain and enhance the viability of their business. Bottom line: A dealership engaged in this manner is a dealership that is growing. Finally, as with every other key aspect of dealership operations, the dealer principal will play an essential role in setting the tone and creating a business culture that looks for diverse, qualified employees who can work in every facet of the dealership.

For more information about making diversity a business imperative, NADA members can refer to the NADA Driven Guide at: iada.link/diversity

FALL/WINTER 2021

FIVE THINGS

While always seeking to improve our embracing of diversity, equity, and inclusion, auto dealers are on the right path as an industry. Leaning in on matters of DEI requires a longterm commitment and is far from complete. There is much more to be done, but we should be gratified that our record to date is a good one and we should celebrate those that have made it so.

IOWA AUTO DEALER

Strengthen your connection to the community you serve. Your business success has always been tied directly to your ability to develop and nurture relationships within your community. Don’t be afraid to build bridges where none have previously existed or to go beyond your obvious or traditional associations. Identify and embrace diverse constituency groups that would be non-traditional collaborators. In fact, making these connections should be a top priority to expanding your customer base. As you look to expand your outreach and engagement, look for opportunities to build longterm relationships with different constituencies. For example, your traditional sponsorships in the community, such as Little League, are part of building goodwill and awareness in the community at large. Look for similar opportunities with more targeted constituencies where your dealership is located. As with any other relationship building exercise, the desired outcome is expanding natural synergy while steering clear of any potentially controversial areas.

Create opportunities to promote equity in the workplace to keep your business on a successful track. Fostering equity in the workplace is not only the right thing to do, but it is also good for business. For a dealership, workforce equity is akin to a threelegged stool. The concept is a win for the dealer, the employee, and the community where the dealership is located. It is important that all employees, particularly women and other underrepresented groups, are given the unique resources they need to have access to opportunities. Dealers should continue to invest in pathways for employee promotion and advancement, including business training, coaching, and mentoring. These resources and tools are a recipe for success for the dealer.

FIVE THINGS

Think expansively as you confront the shortage of skilled automotive service technicians and other dealership jobs. As nearly all sectors of the American workforce are experiencing labor shortages, recruitment and retention strategies have become more important. Now more than ever, you can present your dealership in a positive light at community colleges and technical schools, as well as to high school and even middle school students. Career days in local middle and high schools present a great opportunity to educate students on the many opportunities available to them working at a dealership, including a competitive salary, valuable health care benefits, and the potential to one day move into senior management.

And remember that the students in the classroom directly reflect the changing demographics of your community. So, to maximize your recruiting potential make sure that your “school sales team” reflects the diversity of your dealership. Also, you should not be shy about recruiting prospective workers from unconventional, nontraditional places. Places like religious institutions or even a homeless shelter could prove to be a source for finding highly motivated people with prior experience who just need another chance to thrive. A d d i t i o n a l l y, f o r t e a c h e r s , administrators, students, and parents, dealers have a great story to tell about finding a career opportunity instead of just a job! An entry level job at a well-run dealership can be a ticket to a sustainable middle-class lifestyle, which has universal appeal in these

uncertain times. Today’s service work requires computers and high-tech equipment, which involves problem solving that is both challenging and rewarding. And, probably the most persuasive point, with on-the-job training and development, a college degree is not necessary to advance into management positions within a franchised dealership.

Myra Dandridge is NADA’s executive director of external affairs and public policy, a role she has held since 2020. She previously served as communications director for the Congressional Black Caucus and as vice president of government relations for the National Association of Broadcasters.

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SHOW & TELL

Auto Pilot

Quick thinking and emergency preparedness help dealerships deal with cardiac distress when it matters most. BY ASHLEY FLAWS One minute, Kevin Roesler of H & S Motors in Cresco was examining if the check engine light was on during a routine service job—the next, it was lights out. Roesler went into cardiac arrest. In other words, his heart stopped. Fellow employee Brian Sobolik was finishing up his own service job before lunch when a commotion alerted him to Roesler’s condition and his two worlds collided. Jumping into action, he began chest compressions, as he had been trained to do in his secondary role as a volunteer firefighter. “The adrenaline was pumping, I know that,” Sobolik said. “Practicing

on one of those ‘dummies’ versus an actual person, it’s quite a big difference.” Police were on the scene within minutes. The sheriff deputy who happened to be in the area at the time took over CPR, or cardiopulmonary resuscitation, as Sobolik helped prepare the automated external defibrillator (AED) from the police car. Paramedics arrived moments later and successfully revived Roesler with the AED. “I’m doing fine ever since,” said Roesler, now fully recovered from the November 2020 incident. “I was very appreciative to [Sobolik] and the

deputy who was on the scene there real quick like. Things were on my side that day.” According to the American Heart Association (AHA), 90% of people who suffer cardiac arrest outside of a hospital die. Immediate CPR performed by a bystander triples a victim’s chance of survival. But not every bystander happens to be a trained first responder like Sobolik. Minutes later, either one of them could have been out for lunch, and the story may not have had a happy ending. Two Steps to Save a Life Traditionally, CPR combines chest compressions with breathing at a rate of two breaths per every 30 compressions, but the AHA lists hands-only CPR as a life-saving action any bystander can take when disaster strikes. When a person enters cardiac arrest, they are nonresponsive and will not answer or otherwise be able to react as you assess their condition. They may gasp for air or stop breathing

When Kevin Roesler (center right) went into cardiac arrest while working at H & S Motors, co-worker Brian Sobolik (center left), Howard County Sheriff Deputy Shane Thorsten (right), and Cresco Police Chief Tim Ruroden (left) sprang into action. PHOTO BY MARCIE KLOMP, TIMES PLAIN DEALER

IOWA AUTO DEALER

SHOW & TELL

altogether. If you suspect a person has entered cardiac arrest, there are two critical steps to hands-only CPR: 1. Call 911 or ensure another bystander does so. 2. B egin chest compressions, pushing hard and fast at the center of the victim’s chest. CPR plays a crucial role in what the AHA calls the Chain of Survival. Chest compressions help keep blood flow active until an AED is available or emergency personnel arrive on the scene. Jump Start Sobolik is not the only Iowa dealership employee who can add lifesaver to their resume. In 2014, an employee of the Wilson Toyota service department in Ames saved then Ames Mayor Ann Campbell’s life with his quick action. Though the employee has since moved out of state, owner Danny Wilson recalls the day vividly. Acquainted with Campbell since he was 10 years old, Wilson grew up with her children. He had enjoyed chatting with Campbell in his office, catching up while her Prius was in the shop. He stepped away for a moment, and when he returned, she appeared to be choking on the ground. She had actually entered cardiac arrest, and a young service advisor had begun chest compressions while Wilson dialed 911. Within 10 minutes, emergency responders were on scene and were able to revive her with an AED, though it was touch and go for a while. As soon as he could after the incident, Wilson acquired an AED

to remain on site at the dealership at all times. “It’s sitting right in our service department, right in the front door when you walk in,” Wilson said. “You’re not going to hurt somebody by putting it on them. If you don’t know if they’re having a heart attack or not, you put it on them and it will know. It will take care of it. It’s kind of amazing how that deal works. Once you pop that thing open, it tells you everything you have to do. You don’t have to worry about it.” An estimated 10,000 incidents of cardiac arrest occur in the workplace each year in the United States, yet only 50% of employees indicate they are aware of an AED located at work, according to the AHA. An AED is a portable device able to assess a person’s heart rate and deliver an electric shock if needed. The AED vocalizes each step required along the way to simplify the process for those springing into action. Ambulances, fire trucks, and police cars are equipped with AEDs, but businesses can consider having an AED on site as well to increase the odds of saving a life that much more. The likelihood a victim will survive cardiac arrest drops up to 10% every minute their regular heartbeat is not restored. Immediate availability of an AED at the dealership, whether displayed prominently on a wall or easily accessible at the reception desk, may save the life of a colleague, customer, or friend someday. Roesler was one of the lucky ones, he said. “Everything fell in the right place at the right time.”

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FALL/WINTER 2021

Fueling the Future

Electric vehicles are poised to become a booming market in the decade ahead. Investments in infrastructure and dealership education are key to making the most of it. BY BRITTANY BUNGERT

IOWA AUTO DEALER

Earlier this year, President Joe Biden announced a target for automobiles: By 2030, half of the new vehicles sold will be zero emissions. That’s a tall order for Iowa, which would see an increase from just over 6,000 total electric vehicles in the state to annual sales of more than 66,500. But as technological advances and new models are introduced, it’s not an impossible goal—so long as the infrastructure, both physical and in dealership support, develops. EV adoption has a bit of a chicken and egg problem. Drivers may be hesitant to purchase vehicles if it is difficult to find a charging station. And businesses may be hesitant to invest in charging infrastructure for only a few thousand drivers. But as Iowans have heard time and again: If you build it, they will come. Investing in Infrastructure Approximately 2,100 gas stations cover the state of Iowa, allowing motorists to conveniently refuel their vehicles. Iowa’s charging infrastructure remains in its infancy, ranking 33rd among states and the District of Columbia according to Department of Energy data. As of September 2021, the state had 521 ports at 246 locations, with more than half of all counties not having a single public charging station. Many charging stations are centered around urban areas, with 114 stations in the Des Moines metro area alone. Just under half of Iowa’s public charging locations have come online since the start of 2020. The number of charging stations is growing as the demand for electric vehicles and the chargers to support them increases. But even with that growth, Iowa has a lot of work to do to make charging as convenient as pumping gas. “In general, the amount of

charging infrastructure needed depends on a variety of factors, such as how many drivers have access to charging at home or work, the types of vehicles (plug-in hybrid and battery electric) that are in use, and most importantly, how many EVs are projected to be on the road over time,” said John Gartner, senior director for transparency and insights at the Center for Sustainable Energy, a nonprofit energy program administration and advisory organization. Utility companies are establishing charging networks within their service areas by installing their own charging stations and offering rebates to both residential and business customers that install chargers. “We’re seeing electric vehicle adoption momentum here in Iowa,” said Tina Hoffman, vice president of corporate communications at MidAmerican Energy Company. “By offering EV rebates and Level 2 charger rebates, we see this as an opportunity to support our residential and business customers, including dealerships. These incentives help make EV ownership more affordable and more convenient.” In addition to rebates, MidAmerican is developing a network of DC fast chargers throughout its service area. “MidAmerican is working to help reduce range anxiety for those times people do need to charge away from home, which is why we launched our growing DC fast charger network,”

“Understanding where these vehicles are, how and when drivers are charging, and impacts on the distribution system are important to planning and preparing for additional EVs on the system.” —ROB WOZNY, ALLIANT ENERGY

FALL/WINTER 2021

Top Cities for Public Charging Stations 1-99 Des Moines 44 Cedar Rapids 34 Iowa City 31 Coralville 28 Altoona 15 Ames 15 Dubuque 14

IOWA AUTO DEALER

Waukee 12 Burlington 11 100-199 Davenport 11 West Des Moines 11 Waterloo 10 200-299 Cedar Falls 9 Ankeny 8

300-399 400-499

1-9

Urbandale 8 Mount Pleasant 610-19 Council Bluffs 5 Fort Dodge 5 Sioux City 520-29 West Burlington 5

30-39

Charging Stations & Registered Electric Vehicles Registered EVs 1-99 100-199 200-299 300-399 400-499 500+

Charging Stations 1-99

1-9

100-199

10-19

200-299

20-29

300-399

30-39

With 521 ports at 246 charging locations, 400-499 Iowa ranks 33rd among states for charging infrastructure. 500+

40-49

FALL/WINTER 2021

“Car dealers are on the frontlines of the EV market and must be prepared to take on a variety of subjects beyond the scope of traditional car sales.” —VAASHA LUCHTMAN, CENTER FOR SUSTAINABLE ENERGY

Hoffman said. The utility plans to have 50 level three charging locations in Iowa by the end of 2022. Alliant Energy uses data from its rebate program to make informed decisions as it develops electric vehicle infrastructure. “There are currently more than 1.8 million electric vehicles on the US roads and may be 18 million by 2030. Understanding where these vehicles are, how and when drivers are charging, and impacts on the distribution system are important to planning and preparing for additional EVs on the system,” said Rob Wozny, electrification program manager at Alliant Energy. “We’re still learning, too. The data collected through the rebate program allows us to make

A 2021 Ford Mustang Mach-E charges in front of Bill Colwell Ford in Hudson. The charging station located in front of the dealership is available for public use. PHOTO COURTESY OF BILL COLWELL FORD

IOWA AUTO DEALER

changes based on the information we’re seeing from our customers.” As dealers invest in charging stations, both for their service bays and customer use, they have decisions to make. How many chargers to install? Where? Is the electric fuel complimentary or do members of the public filling up their batteries need to pay? What are the manufacturer’s requirements? “By offering charging at their locations beyond what may be required by their OEM, dealerships are showing support for EVs and consumer adoption,” said Gartner. “It also makes it easier to assure models are ready for test drives. If the charging is free and open to any EV driver, it could encourage EV owners

Finnin Kia in Dubuque recently became EV certified. PHOTO COURTESY OF FINNIN KIA

with other brands to visit, which gives a potential selling touchpoint.” If a dealership decides to add public charging stations, how to proceed depends on the energy company. Alliant Energy recommends dealerships contact them at the outset, while MidAmerican recommends working with a third-party charging station supplier and installer. “The earlier the utility is involved in installation plans, the better off the dealer will be in the long run,” said Wozny. A New Type of Sale Customers considering an EV purchase have questions that are simply never asked about a car fueled by gasoline. “It’s a different discussion than dealers are used to having with people who drive gasoline cars,” said Joel Levin, executive director of Plug In America, an association that supports EV drivers and advocacy. “When you sell someone a gasoline car, you never have to answer questions like

‘Where do I get gasoline?’ ‘How do I put gasoline in the car?’ ‘How does gasoline make the car move?’ ‘Is it dangerous to put in gasoline in the rain?’” Plug In America wants to help dealerships answer those lifestyle questions. “We discovered there was a need there that dealers had that, for the time being, wasn’t being filled elsewhere,” Levin said. So Plug In America began offering PlugStar training for dealerships. “We know that dealers know how to sell cars,” said Kat Urquhart, program director for Plug In America. “That’s what they do, they sell cars every day. Our training is not meant to replace the current training that they’re getting. Our training is meant to be complimentary to what they’re already getting.” The PlugStar training program, which is available online, certifies dealership employees for 12 months. If at least two employees go through the training, the dealership can achieve PlugStar Certification. “Dealers need more training,” said Levin. “OEM training is really good on the features of the car. That’s what they’re used to doing from the sheet metal in, but in terms of supporting the dealer, they don’t help as much going from the sheet metal out.” The Center for Sustainable Energy is also developing dealershipspecific training materials to help educate employees. “Car dealers are on the frontlines of the EV market and must be prepared to take on a variety of subjects beyond the scope of traditional car sales,” said Vaasha Luchtman, senior manager for the fleet and dealership team at the Center for Sustainable Energy. “As more people consider an EV for their next vehicle purchase, dealership staff will need resources beyond basic OEM EV training. For example, they will need answers to consumers’ questions about cold weather performance,

Chargers & Plugs

Filling up a vehicle with electric fuel is different than pumping gas. Brush up on the different types of chargers and plugs commonly used on EVs.

LEVEL ONE

LEVEL TWO

LEVEL THREE AND UP

Standard 120 volt household outlet, adds 4-5 miles of range per hour

More than 200 volts, adds 12-60 miles of range per hour

Direct current fast charging, also called DC fast charging, can go as high as 800 volts and add 3-20 miles of range per minute

COMBO CCS

Compatible with most electric vehicles Level 3 charging

CHADEMO

Compatible with fewer electric vehicles Level 3 charging

J1772

Compatible with all electric cars Level 2 charging

FALL/WINTER 2021

Alphabet Soup Electric vehicle acronyms, explained.

alternating current, a charge that changes direction

BEV

battery electric vehicle

BMS

battery management system, an electronic system that manages and monitors rechargeable batteries

direct current, electricity that flows in one direction

FCEV

fuel cell electric vehicle

ICE

internal combustion engine

kWh

kilowatt hours, which is how electrical power usage is measured

MPGe

miles per gallon equivalent, which is determined by seeing how far a vehicle can travel on the equivalent of one gallon of gas

PHEV

plug-in hybrid electric vehicle

SOC

state of charge

ZEV

zero-emissions vehicle, or a vehicle that does not emit exhaust or other pollutants

IOWA AUTO DEALER

battery life, how and where to charge, and available incentives to help close the sale.” The shift to EVs involves relearning everything consumers and dealership sales staffs have traditionally known about fueling vehicles. Reframing that thought process will take time. “There’s a learning curve for most customers looking at EVs, so salespeople often spend the most time answering questions such as, ‘Where can I find charging and how much does it cost?’ While sales staff are experts on the vehicles they sell, they are not necessarily experts on charging infrastructure, utility rates, incentives, and electric vehicle drive train systems, especially because those details are constantly changing,” L u c h t m a n s a i d . “ T h a t ’s w h y specialized on-going and up-to-date training and customized resources are needed to successfully boost EV sales and increase EV adoption.” In addition to training employees, dealerships can use apps and other services to help educate both customers and staff about the lifestyle changes involved with owning an EV. Chargeway is one of those services that partners with dealerships to enhance the shopping experience both through the dealership’s website and in the showroom. “What our platform does is it takes all the questions that people have about EVs and puts the answers to those questions on the dealer’s website,” said Jo Borras of Chargeway. The service has multiple ways of doing that: a plugin that connects directly to a dealership’s website, an app, and in-dealership devices called Beacons that allow customers to access the information they need to make informed decisions about EVs. “Dealers are stuck in the middle because they don’t have the tools to present things correctly. That’s the only thing that’s missing,” said Borras. “So if we can give them those tools, they can sort of re-establish

“When we start thinking of things in terms that are familiar to us, it becomes much less of a boogeyman.” —JO BORRAS, CHARGEWAY

themselves as that community leader, that trusted source of information about cars.” Chargeway’s platform allows users to input their vehicle information, see nearby chargers that are compatible, and create routes for road trips with charging stations along the way, even factoring in variables like outside temperature and expected speed. The approach of the platform is to help drivers connect the new technology to the old. “When we start thinking of things in terms that are familiar to us, it becomes much less of a boogeyman,” said Borras. Instead of thinking about how much battery life is left, think how much electric fuel is in the tank. Drivers that typically refuel at a quarter tank might shift to refueling at a quarter charge. “If we start using that same kind of familiar language, it demystifies the process of adapting to an electric car,” said Borras. Platforms like Chargeway can also help dealerships sell pre-owned EVs from other manufacturers. With dozens of EVs on the market and rapid technological advances, it can be difficult for pre-owned vehicle salespeople to be knowledgeable about each individual model. But integrated

apps can give the salesperson the confidence to answer questions about range and charging, regardless of make and model. Another way dealership employees can help customers reframe their perspective is in looking at the overall cost of ownership. Today, EVs tend to have a higher initial price tag, but lower maintenance and fueling costs. “EV drivers can expect to save up to $1,000 per year and $9,000 over the lifetime of an EV (200,000 miles) on fuel costs alone compared with driving a typical gas-powered car,” said Luchtman. Putting that into perspective for customers is vital. “When you talk about pricing, its more meaningful to talk about the monthly cost of owning it than the cost up front because it’s so much cheaper to maintain and fuel,” said Levin.

Looking Forward Electric vehicles have plenty of competition in Iowa, especially because of the state’s focus on renewable fuels. But the constantly improving technology appears to be here to stay—and poised to take advantage of the state’s growing wind energy production. “Our renewable energy makes EV ownership a great choice for several reasons,” said Hoffman. “One, our renewable energy helps keep MidAmerican’s electricity rates low, which helps keep costs affordable to power EVs. Second, because over 80% of our customer’s electricity in Iowa comes from renewable sources over a year’s time, it helps reduce our customers’ carbon footprint from transportation.” W h i l e u t i l i t i e s a n d p r i va t e businesses develop the state’s charging infrastructure, dealerships can develop the people infrastructure, boosting the

specialized EV knowledge of Iowa’s dealer network. “A s t h e s e b e c o m e m o r e mainstream, the EV buyer is going to resemble the standard car buyer that we’re used to more than they have in the past,” Borras said. “It’s going to be less technical, fewer engineering questions, fewer gotcha kind of questions, and they’re going to be more interested in how the car fits their lifestyle, which, the salespeople already know how to answer those questions.” And there’s a booming industry of groups looking to support dealerships as they learn how to answer those lifestyle questions. “It’s a little bit different technology and it’s a bit of a different sale than what they’re used to,” said Levin. “But there’s a lot of benefits to it. There’s a lot of ways in which we think it’s actually a better technology across the board.”

FALL/WINTER 2021

Q&A

Know Better, Do Better Experts share missteps from other dealerships.

QUESTION What’s the biggest mistake you see dealerships making? ANSWER

I see dealers who don’t really commit to safety and then receive fines worth thousands for easily preventable things. A simple air gun that is not OSHA compliant can be a fine of up to $2,500 per gun. Those fines are because you think your insurance company has covered you already, your employees don’t feel heard or safe, or a regulatory agency decided to stop by. Your insurance company will check that your building won’t catch fire, but they’re not checking if you’re compliant with federal and state rules, if all your certifications are current, or if your employees are using machine guards. Your safety program must cover employee safety and regulations that aren’t part of your insurance plan. Your commitment to safety impacts your bottom line. I’ve had technicians say they’ve

— MIKE REEL KPA kpa.io

IOWA AUTO DEALER

talked to management about safety issues, but nothing happened. Ignoring these issues could leave you open to accidents or incidents that result in workman’s comp claims or worse. Your employees can be whistleblowers who call OSHA stating they don’t feel safe which could get you audited. Your attendance at scheduled safety meetings is important and shows why required training, PPE, and manifests are all part of being in compliance. An investment in safety now saves you money later. The National Safety Council estimates that for every $1 spent on safety, you’ll save at least $2 in the future. Having a safe work environment for your employees is what it is all about at the end of the day—keeping them happy because they feel safe and valued, which also means less turnover for you.

“Having a safe work environment for your employees is what it is all about at the end of the day.”

Q&A

ANSWER

“All businesses will likely experience a cyber attack at some point, we just hope we can get businesses in a position to respond whenever this happens.“

One of the biggest mistakes that I see dealerships making is not believing they could potentially be the target of a cyber attack. I too often hear that “It would never happen to my company” or “The hackers are only going after large corporations or the government.” This couldn’t be further from the truth as hackers have become too advanced and would rather take the easy money found in small/medium sized private companies as opposed to hitting the jackpot with a Fortune 500 sized company. Something I always like to ask my clients is “What do you think your IT team is doing for your business that a large Fortune 500 company is not doing in order to avoid a cyber breach?” The answer normally draws a blank stare and a realization that if companies like Target, LinkedIn, Facebook, and our own government can be breached, these types of hacks could occur at the local level as well. All businesses will likely experience a cyber attack at some point, we just hope we can get businesses in a position to respond whenever this happens. Some questions all businesses should be asking themselves when thinking about cyber breaches: • How many personal records of employees, vendors, and clients do you store? Even if given to a third-party storage company the risk of getting hacked is still on your own company. • What is your IT team doing to prevent cyber breaches? • How often are independent cyber audits being conducted to find areas of improvement? • What would your company do in the event that you did find you had a cyber breach? If you have any questions about what to do pre and post a cyber breach, please don’t hesitate to reach out to me at spencer.bowers@assuredpartners.com.

— SPENCER BOWERS AssuredPartners assuredpartners.com

FALL/WINTER 2021

Q&A

“... many dealers generally spend little or no time monthly trying to identify financially weak areas of the dealership and then, most importantly, doing something to improve those areas.” ANSWER

The biggest mistake we see dealerships making is the dealer not analyzing or having someone analyze the various departments of their business. Specifically, not analyzing the poorest performing department or those departments not contributing their share of gross profits and net profits (pretax net profits). Said another way, many dealers generally spend little or no time monthly trying to identify financially weak areas of the dealership and then, most importantly, doing something to improve those areas. This is especially true the last few months when profits have been so good. Why? The profit margins from May 2020 through July 2021 have generally never been better. The profit margin for 2020, from NADA, was 3.6% of sales where the typical year for the last ten years has been roughly 2.5% of sales. The 2020 period included a weak period when COVID first hit. This year, dealers have had several months averaging over 5.0% of sales and the year-to-date return on

IOWA AUTO DEALER

sales through July 2021 for our group of dealers has been averaging 4.8%. It is easy to become complacent when profits are nearly twice what they have been for the last ten years. Recently, a dealer found out their service department was not contributing its share of gross and net profit. Upon analyzing their statement, the dealer found that the dealership had too many technicians doing too little, paid too much, and too many administrators not performing or making little to no effort to present and sell needed products to their service customers. Most dealers usually have reasonable areas of improvement and opportunity but either are not aware or not willing to address these shortcomings. The better performing dealers are always looking for areas of improvement and then addressing the issues to make the needed change. What about your dealership?

— CARL WOODWARD, SCOTT WOODWARD & PHIL WEGENG

Woodward & Associates Inc. cpaauto.com

PROUD SPONSOR OF THE

Iowa Automobile Dealers Association

For more information visit truecar.com/dealer

ODDS & ENDS

CENSUS SAYS

The 2020 census sheds new light on the state of Iowa’s franchised dealer network across all 99 counties.

Automobile Franchises Per 100,000 Residents 0 franchises 1-20 franchises 21-40 franchises 41-60 franchises 61-80 franchises 81+ franchises

Counties Without Franchised Car Dealerships COUNTY

POPULATION RANKING

Adams

Taylor

The five largest counties contain

35.3% of the state’s

Franchises Per Capita

Wayne

Van Buren

Worth

COUNTY

POPULATION

Decatur

Ringgold

4,663

Greene

Sac

Davis

Franklin

Mitchell Guthrie Appanoose Mills

LEAST

MOST

(with at least one franchise) COUNTY

POPULATION

Polk

492,401

9,814

Keokuk

10,033

Clayton

17,043

Clarke

9,748

Union

12,138

Story

98,537

Hancock

10,795

Monona

8,751

Humboldt

9,597

Lucas

8,634

Calhoun

9,927

Linn

230,299

Cherokee

11,658

Dallas

99,678

Madison

Kossuth

14,828

Scott

174,669

Tama

Louisa

10,837

Monroe

7,577

IOWA AUTO DEALER

FRANCHISES

population but only

19.4% of the state’s automobile franchises.

Woodward & Associates, Inc.

1707 Clearwater Avenue ·P.O. Box 1584 ·Bloomington, IL 61702 (309) 662-8797 ·Fax (309) 662-9438 ·Email woodwardassoc@cpaauto.com ·http://www.cpaauto.com Providing service to Iowa dealerships and their related entities. We specialize in automobile dealers in the following areas:        

Certified Public Accountants

Memberships in:

     

Dealership valuations Automobile dealer legal support Buy-Sells for dealerships LIFO inventory computations Financial statement analysis Corporation Income Tax returns Personal Income Tax returns CPA prepared financial statements Dealer estate planning Employee theft consulting Internal control studies and audits Profit consulting Training office managers/CFO’s 401K Audits

AUTOCPA Group The American Institute of Certified Public Accountants Licensed to practice in Iowa

Serving more than 250 Automobile Dealers throughout the United States

You’ve mastered the art of selling cars. What about selling your dealership? Our firm has completed over 100 dealership buy/sell transactions throughout the Midwest and beyond. When you consider the importance of these transactions, you want us on your side of the table. See how you can put our experience to work at Arenson Law Group, PC.

Gold Sponsor of IADA and longtime member of NADC

www.arensonlaw.com info@arensonlaw.com 319-363-8199

Left to Right: James “Jim” Arenson; John Hofmeyer IV