Tammy Darvish Back to Selling Cars

This is the last in a series of executive interviews on the state of the North American auto industry.

Tammy Darvish went from being a dealer to a dealer advocate three years ago after General Motors and Chrysler terminated thousands of U.S. dealerships as part of government-ordered post-bankruptcy reorganization plans.

She cofounded a dealer-advocacy committee, testified at congressional hearings and lobbied on Capitol Hill to fight the nationwide dealership closures. Last year, she wrote a book, “Outraged,” which details that part of automotive history and her part in it.

Darvish is vice president of Darcars, a Silver-Springs, MD, family-owned 20-store dealership group founded by her father. Darcars lost two Chrysler-brand stores during the consolidation.

WardsAuto: What’s new with your dealer-rights fight?

Darvish: There’s nothing really new. We are continuing to monitor the situation, and the manufacturers know that was a one-time hall pass that will never be issued again. 

WardsAuto: What was the reaction to the book? Was it binary, with dealers liking it and auto makers hating it?

Darvish: The most common reaction was, “Oh my God, I just didn’t know that was what it was all about.” People didn’t know these were thriving, successful, profitable businesses; even some in our own dealer body didn’t know.

Outside our industry, people do not understand the relationship between dealers and manufacturers. They feel they are much more as one, and they’re really not.    

WardsAuto: Did you take a lot of heat because of the book?

Darvish: Directly? No, not at all.

WardsAuto: A lot of people predicted bankruptcy would be a kiss of death for General Motors and Chrysler. That didn’t happen. Are you surprised it didn’t?

Darvish: No. That would have never happened. They might have looked differently than they do now, maybe broken up or something, but they would have survived.

WardsAuto: How are customers different today compared with, say, 10 years ago?

Darvish:  Customers don’t drive around and visit 10 different dealerships anymore. They do a bunch of research online. They research about 18 dealerships before deciding on which one to buy from. They do all that work online.

They don’t come in to see what they might like. It’s not like that anymore. They usually come in for a specific car. They know more about the package content than some of our associates do.

Today’s customers know the incentives, the payments. They know everything. It’s just a matter of who they want to do business with.

WardsAuto: What do you do to get them to want to do business with you?

Darvish: We are not marketing to people by saying, “Come on down now and let me tell you why.” We are marketing ourselves as people you want to deal with. And we tell them why. We tell them who we are. What we do in our communities. How we give back and how we are able to provide levels of service people expect, and more importantly, deserve.

WardsAuto:What problems will you face in selling electrified and other high-tech fuel-efficient cars to the American consumer in the next few years?

Darvish: The biggest challenge we have is that these are generally niche vehicles that a majority of our customers are not interested in. In addition, the cost prohibits entry-level and first-time buyers from purchasing them, simply as a matter of affordability. 

While fuel economy is important to consumers, many modern gasoline engines offer 30 mpg-40 mpg (7.8-5.9 L/100 km), with much more economical transaction prices. 

It really is up to the consumer to decide. We live in a free nation. It’s easy for the government to mandate, but consumers are going to choose what they want. The government will have to find a way to corral people and get them interested in electric vehicles.

We sell both the Chevrolet Volt extended-range electric car and the Toyota Prius hybrid. We can barely give the Volt away, even though an owner can get a $7,500 tax credit. On the other hand, people line up for the Prius. I don’t get it.

WardsAuto: Is there more competition in auto retailing, even though dealer ranks have been thinned out?

Darvish: The competition of the market isn’t any different since the shakeup. How we compete is different.  

WardsAuto: Dealers have seen more regulations in recent years, especially in auto financing. Are there too many regulations, or are they just something you have to live with?

Darvish: There should be more consistency with regulations. Auto dealerships are among the most highly regulated businesses in the country. That said, it is really important for dealers to comply with regulations, because they are here.

Dealers should make sure all of their associates know what the laws are, what the compliance requirements are. Otherwise, they get in trouble out of ignorance, and that’s no excuse.

WardsAuto: As a multifranchise dealer, what franchise looks good to you these days?

Darvish: Quite frankly, they all look good. So we’re not concerned about any of our franchises. Some are at way higher volume levels than others, some have better retention rates. We try to balance them.

WardsAuto: You must not have a Suzuki franchise if you say they all look good.

Darvish: No, we don’t sell Suzukis. 

WardsAuto: What is the strongest department in your dealership group right now?

Darvish: How do you define strongest?

WardsAuto: Most profitable by the conventional definition, but that’s not the only one.

Darvish: The most important for us is our service operation, because that’s what most determines a customer’s loyalty to your brand. The service experience has more of a direct connection to what our future is going to look like.

WardsAuto: Even more than new-car sales?

Darvish: No question. Probably triple. We’ve improved our service department process. Before, we were just order-takers. Now we are sales consultants. No matter what someone does, they’ve got to be a good salesperson.  I tell my daughter who’s in college, “You’ve got to know marketing.”

WardsAuto: When you were fighting the dealer terminations, you cofounded a coalition, attended court hearings and spoke before a congressional subcommittee. A lot of people said you had a lot of drive. Where’s that come from?

Darvish: Probably my father. We’re similar. He’s probably softer-spoken, but he is a great source of motivation for me.

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