How The Automotive Industry Is Changing - Liza Borches CEO of Carter Myers Automotive

SPEAKER_01 0:04

This is the Beyond the Story Podcast, a show that goes way beyond the story. And now, Sebastian Frost. Wiza Borges, what's happening, Rockstar?

SPEAKER_00 0:34

I am so happy to be on here. I got your energy earlier this morning, and now we get to create more energy uh to take us through the rest of the day.

SPEAKER_01 0:41

Let's go. It's so funny. I have a dear, dear friend of mine. His last name is Borges with a G. So Borges is is it's it almost sounds similar there. And I talk for a living, so I try to nail those pronunciations on there.

SPEAKER_00 0:56

But uh I had no idea how hard that last name was gonna be when I got married. If I had known, I probably would have kept my maiden name because it gets butchered all the time.

SPEAKER_01 1:04

Well, we'll blame your husband. It's easier. Everyone believes it too. So uh you and I got a chance to connect over in the incredible community to tap it over on Clubhouse Breakfast with Champions. Uh a good friend Glenn Lundy has started uh this movement um uh almost a little over uh nine nine or ten months ago, short amount of time to see what this thing has absolutely exploded into. So meeting incredible human beings, uh just like yourself. I always initiate any relationship with new awesome people with let's get you on the podcast because it's a great way to kill two birds with one stone and get to know you a little bit, but I also get to hear your story while we're recording a podcast episode and helping my audience uh know what you're all about. So, for some context, let's back up a little bit. I'd like to go back to the beginning of the story that really brought you to present day of what you're currently doing right now and the work that you're passionate about, etc.

SPEAKER_00 1:58

Okay. Well, there's so many different places you could start. I'm sure everybody could go to a different spot in their life. Um, but I'll start by saying my my family's been in the automotive industry since 1924. Wow. Um, my great-grandfather actually started the company that I'm right now the CEO of Carter Myers Automotive. Um, but where I'm gonna start the story is in 1998 when I met my husband, we were both living in Southern California, and I was working for American Honda Motor Company. And so I was working on the manufacturer side, I was calling on dealers and working around the country. And I told him, I said, I might get married one day, but I'm definitely not having children, had no interest, and I'm definitely never going back to Virginia to work in our family business. And now we live in Charlottesville, Virginia. We have two amazing children, and I am the CEO of Carter Myers Automotive. Um, but the reason I said that back then, when I was, I think I was 22 years old when he and I first met, was I had only seen the automotive industry as a child watching my dad work 24-7 and watching our company almost go bankrupt back in the 90s. And so when I, although this industry had been in my blood and I decided to go out to work for Honda out in uh Torrance, California, um I had aspirations of being the first female CEO of Honda. And what I guess I knew, but I hadn't internalized, was there'd never been an American CEO of Honda at that time, much less a female. But I didn't let that stop me, and I loved every moment of the time that I was with that company, and it was very good to me. However, after six years while I was with Honda, my husband and I were at that point engaged to be married, and we were living in Annapolis, Maryland, and I was still working for Honda. And Honda had let me know that they were gonna move me back to Southern California. It would have been our fourth move in seven years, because every time you we'd get a promotion with the company, you had to move. And I was working with a dealer group up in Maryland who invited me as a young 27-year-old, I think I was, um, who really had not been exposed to a lot of professional and personal development at that time. I was just in my first job out of college, working my tail off, you know, running the rat race, getting promoted every year and a half, moving across the country. And I got to spend three days with a dealer group up in Maryland with their entire leadership team. And at the time I was thinking they're a pretty darn large dealer group. They're about the same size that we are now. And we had a trainer come in, and at the end of the three days, I was so inspired. I had learned more about myself through every all the different exercises they put us through, the books they had us read at night, the journaling that we did. And we all left, and each of these leaders were going back to their own dealership. They had action plans for their team, they had goals they wanted to achieve, um, people they wanted to impact. And I was driving by myself back to a home office in Annapolis, Maryland, where then I would go call on dealers to help them improve their business. And it was just a wake-up call to me. I said, there were, I called my husband on my drive back and I said, you know what, I'm meant for more than this. One, I don't want to move to the fourth place in seven years so we never put down roots or get to know a community. That kind of bothered me. Two, I said, I'm helping other people grow their businesses, but I want to be there in the trenches. What I love is actually talking and impacting people's lives and understanding how I can help them get where they want to go in life. And I'm not really doing that right now. And I couldn't, I wasn't able to verbalize this as well back then. But he and I decided to make a leap. We said, you know what? Let's go talk to your dad. Charlottesville is a great place to raise a family. Because at that point, I was starting to think maybe kids were a good idea. And um, at that point, my dad had three dealerships in Virginia. We had about a hundred, a little over a hundred associates. And um I came back and talked to him. And the funny part of my story, my my professional story, my career story is my dad, while this was a at that point third generation company, he and I had never talked about me coming to work in the business. It was never a part of the conversation. And so I didn't know exactly how that would go. So that brought us to how I joined Carter Myers Automotive back in 2003. We had uh three dealerships at the time. We were in two different markets. And uh since then, um, my dad and I transitioned to the ownership of the company in 2012 uh fully, and we are now 15 dealerships, uh, soon to be 20 in the next uh uh couple weeks, and we'll be up at about a thousand associates across Virginia in six markets.

SPEAKER_01 6:31

Unbelievable. I heard about you, girl.

SPEAKER_00 6:35

I love what I do, Sebastian. I gotta tell you, it energizes me every day.

SPEAKER_01 6:39

I can tell. I can absolutely tell. Something about doing what you love and knowing that you are in the lane that you were supposed to be, that you were put on this this this earth to do. So the car business, it's changed a lot uh since 19, what'd you say, 24? Uh a lot significantly, specifically over the past 18 months. Um, I don't know a ton about it, but I know that there's been a chip shortage which has affected inventory. We can chat about that in a minute here. But what do you think the most fundamental shift has been in the auto industry over the past, say, three decades?

SPEAKER_00 7:15

You know, I think that there are there have been so many shifts, but the one thing that stands is that our industry and especially the small, I still consider it to be a small business because the majority of dealerships are family owned or individually owned, um, is the resilience that this industry has shown with every single change that has been made. But here's what I'll tell you about today, Sebastian. As I look forward, and I tell this to our team all the time, um, it's not about cars. In fact, I say this every day to our team. I I like cars, I love people. We are in the business of helping people get where they want to go in life. And over the next 10 years, so instead of answering your question and saying, what's happened in the last 30, the next 10 years, consumers in our country are going to be faced with decisions around transportation that they've never been faced with before. Our industry has not changed in a way from a technology standpoint. We've had internal combustion engine vehicles since 1924. We've had a spattering of some EVs, but really nothing to talk about. The next 10 years, consumers are going to be faced with decisions on am I comfortable driving in an autonomous or semi-autonomous vehicle? Does uh a subscription type model work for my family? Do I want to have personal transportation? How do I feel about ride? All these things are starting to bubble up as we also get all these options within alternative fuel vehicles. You know, EVs are just one. I think we're gonna see technology come that we don't even know exists right now. And so our industry needs to be prepared to be the trusted partner for all consumers to be able to have someone to go to to help educate them on making these decisions that they've never been faced with before. You know, previously it was what kind of technology do I want on my car? How, you know, what sort of safety features, how new, what can I afford? But they're gonna be different questions about transportation coming in the next several decades that our uh consumers in the US haven't been faced with. So we are really focused on how does our company make sure that we are always focused on we are here to help people get where they want to go in life. In fact, our our mission is to move lives forward. That's what we do. We move lives forward. And we talk about what that means internally for our associates, but we also talk about what that means for our consumers. They don't come to us because they love coming to a dealership, they come because they're trying to get somewhere in life and they either need a safe, reliable car to get there, or maybe they're pregnant with twins and they need to upgrade from a sedan to a minivan, or maybe they just need their car to be fixed so they can get to work every day so they can put food on the table for their family. But they come to us because they're trying to go somewhere, and our job is to help them get there.

SPEAKER_01 9:43

I love that. So one thing that really sticks out without knowing a lot about your business, other than what you've told me and what I've actually heard about you through uh Glenn and Breakfast with Champions and his relationship with you guys, et cetera, is that you guys are focused on one thing, and that is culture. Because if building from the inside out uh works, and not a lot of brands and businesses really believe that, but it seems like you guys have been ridiculously. I know it's Carter Meyer's Wednesday on Breakfast with Champions and their plugging opportunities. If you want to become an owner as part of the team, everyone that's part of the team is an owner there. I'm thinking culture, culture, impact, building from the inside out. I want to know more. So let's talk about culture a little bit. What what was this was this something from the get? Was this a pivot that happened later on? How did this whole culture as the number one priority be uh become a thing?

SPEAKER_00 10:36

So I believe that it was it was always important to my grandfather, to my dad, although I was not around to be able to see it and feel it the way that I am now. Um, one of the things that I think lent itself to moving our culture forward around putting people first was the fact that we are an we have an ESOP, an employee stock ownership plan. So 26% of our entire company is owned by our associates. That started back in 1979, really as a way to help people with retirement. That was the initial purpose. Um we had a profit sharing plan starting back in the 1940s, which was unheard of back then. We transitioned it into an ESOP and really to try to help set people up for their second phase of life. We know that when when people, when we talk about moving lives forward, it's not just about what they're doing today, but it's what they've earned and deserve later in life. And our country is terrible about retirement, so we're trying to kind of force a little bit of that on people. But the reality of how that fits into our culture really didn't start sinking in until about 12 years ago. And I started asking a lot of questions. I was like, Dad, you know, I understand why you originally set up the ESOP, but our team doesn't understand it. They don't know it. They just get a statement once a year and they're like, oh, I own stock in this company, and when I retire, here's how much money I'll get. So we really started exploring about what it means to be an owner. And I asked, I talk about this in our new higher orientation every single month. And I ask people to raise their hand if they ever owned their own business. And we talk about the responsibility that you get to have when you're a business owner, right? You get to have all the risk and all the reward and all the responsibility. And what we talked to our team about is an eSOP is the perfect combination for people to still be able to get the reward of being an owner. They're taking a little bit of risk, really through sweat equity, because they don't put in a dime, but they are sharing in the responsibility of wearing that ownership hat every single day and making sure they take care of every customer that's standing in front of them or every associate that comes to them that needs support or help, just like they're the owner. But if we share that responsibility across 700 plus and soon to be a thousand associates, ultimately we can create even more reward. And that's reward for our customers, it's for our associates, and it's for our community. So our culture is really built around the fact that we give ownership to every associate in our company, but we ask them to take on that responsibility with us. When we do that together, it's just exponentially more powerful.

SPEAKER_01 13:01

And have you have you found that your team members are more committed to the job and the company because of that?

SPEAKER_00 13:09

You know, you can't measure that. You can't put a number on it, but you can feel it. And I won't tell you, I'm not gonna put be in the cotton pie in the sky and say every single associate at CMA cares more and gives more and does more, has more discretionary effort put in their job because of it. But I think a large majority do. And especially once they're with us five years and 10 years, and they start seeing their stock grow and their ownership. I mean, the the uh third largest stockholder in our company, he started with us when he was 17 years old as a technician. And he's now a service director at one of our Honda stores, and he's the third largest stockholder in our company. We have one in the top 10 who's been in the accounting office booking deals for 43 years. And she's like, I think number seven on the list now. So there's just some amazing success story. So people don't always get it the first year, maybe not even the second year, but as they stay with us longer and they start really understanding what it means to be an owner, um, I do believe it makes a difference in our many dealerships do you plan on opening? I mean, you said there's well, it depends on what time frame you're getting these. You said soon to be 20.

SPEAKER_01 14:13

So I'm like, great, when's 50? I mean, I know.

SPEAKER_00 14:16

Yeah. So we are really paying attention to this consolidation that's happening in the auto industry. Every single day you're hearing that Lithia and Group One and the and Asberry, these large dealer groups, are buying even more stores. And I think that there's a uh a good combination of wanting to be bigger and being a regional impact player so that we can negotiate deals and floor plan rates so that we can recruit with strong career paths and opportunities, while also being small enough that we can keep our culture strong, keep our foundation strong, and keep our values strong. And so I'd say one of my primary jobs is paying attention to where are the right acquisitions that can fit within our model. How do we make sure that we're big enough to be relevant, but not too big to not be able to move fast and be flexible? I love that.

SPEAKER_01 15:02

So I bought my last car. I'm a car guy. Disclosure. I love cars. Cars are my my good.

SPEAKER_00 15:08

We love people like you.

SPEAKER_01 15:09

I love them. My my my yellow Camaro, my canary yellow Camaro is the love of my life. Um, and uh, I bought it online. Uh I bought it on an app, actually. I applied for it on Thursday. They delivered it to my house on Sunday and they picked my old car up and they said, You got seven days to make sure you're happy. We'll leave your car in the yard in case you're not interested or in case you want in case you want it back. Um, and um I I thoroughly enjoyed that experience. Um, short of them telling me, Sebastian, make the payment because we might not do the payoff in time and we don't want you to be late. And I'm like, nah, it's good. I got my new car. You guys will get it in time. They paid it off a day after 30 days, so I got my first ever in 42 years 30 day late. But that was my fault. But they stroked a check for 500 bucks for the hassle and headache and said, We're really sorry that you were irresponsible. We just wanted to tell you you were awesome. So I thoroughly enjoyed that experience, but I don't think that's the norm of someone going and buying a car. I'm well immersed in the digital world and I love the the ease of use of something like that. Um, but uh a buddy of mine would never do something like that. He's got his car guy at the dealer, at the specific place, whether it's buy or lease or whatever it may be, and that's that's his go-to person. And I think a majority of people think the same thing. They they they buy a car, I don't know however many years they do it. My mom's on her fifth equinox. She loves these equinoxes. I mean, she just keeps buying them, but she goes in for an oil change.

SPEAKER_00 16:32

We do have two Chevrolets, we do have two Chevrolet dealerships just in case it was.

SPEAKER_01 16:36

I love that. I absolutely love that. Yeah, she'll go in for an oil change and need new tires, and they're like zero down, brand new one. You want it? Same payment. And uh, so she'll come home with her fifth equinox. So I still love that. But where do you think that's going with that? I remember talking briefly with Glenn when I first connected with him, had him on the show last year, and I mentioned uh uh that that that I had just bought a car on a car app in my living room and I didn't go into a dealership, was which was extremely pleasurable because in Miami, you know, second language is English. So I I'm already at a disadvantage on there. Um, and plus, no matter what they say, we'll have you in and out. I spend the entire day at the dealership. What are you guys doing to mitigate through number one, making sure people are on the road as soon as possible um with that process? Because I think that's an ongoing like conversation of like the negative experience of buying a car is like I'm not gonna go spend an afternoon, let alone a day, in the dealership, which usually ends up happening because the time you apply and then the bank gets back and you got approval and here and there, it does take I've I I think I've expedited it. Last time in a dealer was four hours max, and I was chomping at the bit to get out of there. Yeah, so how how is that all working in 2021 now with the fact you can buy a car on an app, have it delivered directly to your house, um, and then also you can go to a dealership. I remember we did get my sister's car um last year. Um, they're Chevy, we're a Chevy family here if you can't know if you haven't noticed. And we were in and out of there in um in about two hours. And that was the same guy bought two Camaros from prior two on there. And I called him I'm like, listen, I'm not the dolphins kick off at one o'clock. I'm gonna come buy a car from you right now if you can assure me that I can be sitting on my couch by 1 p.m. watching the game. He goes, get over here, I'll be in at 10. Uh so that was, I know it's improving that process on there, but what are you guys doing to improve that and then these new solutions that are popping up?

SPEAKER_00 18:27

So the key is you said there's some consumers that like to do business the same way you did as far as buying on an app. There's some that like their guy at the dealership and they want to go in and spend four hours and drive seven cars and go through the whole process. And the most important thing our industry is doing is we have to be, we have to have offerings for everybody like you, your friend, and everybody in between. And the reality is most consumers are between the two of you. They don't want to spend four hours in the dealership, but they might want to touch and feel the car or take it on a quick drive before they they sign all their paperwork to either finance lease or just purchase the vehicle. And so, for example, at CMA, we have something called easy purchase, and you can go on our website and you can go through the whole process. You can determine if you want FI products, you can select your payment, you can submit your credit app, select your car. Here's how much money you want to put down, and then we can deliver it to your home, or you can come in, touch it, feel it, then choose to sign on the iPad or paperwork and then take your car. And so we we're trying to be flexible in the way that the consumer wants to meet us. Um, I was just on the phone this morning, actually, before coming on here with uh the head of our dealer association, brainstorming with them because I said in Virginia, there are still two pieces of paper that the state requires to be wet signed, which is crazy. No other industry is still requiring that. So we found some workarounds when we do go deliver it to someone's house. But right now there's still these two pieces of paper. So we're our goal is to have that resolved by the end of the calendar year. Um but you're but you're exactly right, Sebastian. We we need to build your business and we can do business exactly the way that you said. You could go on our website right now, put everything in, submit your credit app, we'll deliver the car to your house. But there are also a lot of consumers who can't buy a car as easily as you can. Or when we think of like, I'm gonna use Tesla as an example. You know, it's very easy for them to sell cars online. They have one finance source and one offering. But the majority of American Americans are payment buyers. We have a lot of Americans who have negative equity in the cars that they're trading in. We do have a lot of situations where we'd have to figure out who is the right bank to be able to work with this consumer to get them approved. And so the ease of that consumer going on to an app, it can happen. It's just still gonna take even longer electronically. So I think that there's a role all the way across the spectrum as far as how we're gonna work with a consumer. It's critical for a dealership to be able to do business in all, I would say four of those ways, all online, all in person, and then majority online or majority in person. And we kind of use those as our four points of how we can walk a customer through the process. I believe that as we move over the next 10 years, it's going to shift more and more and more to the right side of doing it all electronically. Um, but it's not, it hasn't happened quite as fast as we thought. When we went into the COVID period and we all went, you know, we were like, everything has to be done online, everything's being delivered to people's homes. We still had consumers saying, I want to come to the dealership. We had a minimum or a maximum of 10 people we were allowed in our Chevy store during I probably early last summer when we stole a lot of those guidelines. They said you can have 10 people in your showroom at a time. We had like 18 people lined up, standing six feet apart outside of the showroom to come in us, and we're like, we'll bring the cars to you. But they wanted to come in. So I think the shift is there's no question it's happening, and we have to be able to do business in every different uh area of the spectrum, but it is happening a little slower in some parts of the country than others.

SPEAKER_01 21:51

I love the fact that you guys have the variety of options available. What do you want? You want to come in, you want to shake hands, you want to drive the cars, you want to hang out, get a cup of coffee? Cool, got that. You want to come in. Just check out the car and do everything else online. Excellent. You don't even want to come in at all. We have that option too. You're across the nation, no problem. So uh, and I believe that's the direction to head because you're you're allowing you know, I just don't think that technology is gonna replace human interaction and a handshake and a hug.

SPEAKER_00 22:17

Well, Sebastian, I want to I want to take your point on that one step further. Even when we sell a car completely online, if we if we delivered one to you in Miami, everything we talk about in our company is the technology is great, but our job is to wrap it with a relationship. So that when you do have that question after the fact, you're not calling into a 1-800 number and hoping that somebody can pull up the notes on your deal and be able to get your payment taken care of. We want to make sure that we can have all the technology to do uh a purchase as easily as what you just did, but that you also have a live human that you can call that is going to be there with you through the entire life of your ownership experience.

SPEAKER_01 22:53

So take technology, wrap it with the relationship, and that's that's smart too, because I've found that every guy that sold me a gal that sold me a car um that I've been able to stay in touch with, when it's time to buy another car, guess who I'm calling? Uh it's that individual. So um, you know, that that I think I still get a birthday card from Fletcher Jones Mercedes B Mercedes Benz in Newport Beach from 12 years ago. Liza, it's still Sammy still sends me a happy birthday card, and I'm not even a Mercedes customer. I do. I still know his name. Exactly. Exactly. Uh well, this has been such a fun conversation. If you're listening to this right now, you're thinking, hold on a second, I I need a new car. Then um Liza and our friends over at uh Carter Myers Automotive Group would be more than happy to chat with you. There's gonna be a link in the show notes. That's the description of this episode. You can click on it, you can buy a car online for uh uh uh for crying out loud and have it shipped right to your house on there. So this episode may be brought to you by Carter Myers Automotive. Such a fun conversation here, uh Liza. I'm madly in love with my Camaro. Otherwise, I would say I'm gonna go take a peek at that inventory on there. I heard a rumor they're not making Camaros anymore. Is that just a rumor? Did you hear that?

SPEAKER_00 24:01

I think it's just a rumor, but we'll just leave it at that for now. I will say the inventory situation has been so crazy and things fluctuating so much during this chip shortage that I think there are decisions being made and being unmade during this time as they try to figure out how to prioritize certain models over others uh where they can provide chips. And then that's that's affecting long-term decisions.

SPEAKER_01 24:22

Well, I'll enjoy it for now. It's only got 32,000 miles on it, and uh, I don't need a bigger engine. That thing is enough. Okay. They're like, is it the is it the SS? I'm like, no, I'm a lunatic in the RS. I can only imagine a little bit more horsepower. So well, Liza, thanks so much for taking some time out of your busy day. It's so great to uh to see you face-to-face outside a clubhouse on here. And I look for I look forward to to staying uh connected with you here. And when I'm in town in Virginia, I'll have to swing by uh and see one of those incredible dealerships on there.

SPEAKER_00 24:54

We would love to have you, Sebastian, anytime.

SPEAKER_01 24:57

Thanks, Liz. I appreciate it. Come back soon, will you?

SPEAKER_00 25:00

Absolutely.

SPEAKER_01 25:01

Until next time, friends. Thanks so much for tuning into this episode of the Beyond the Story Podcast. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show. This way you'll get updates as new episodes become available. If you feel so inclined, please leave us a review. We sure do appreciate it. Signing off from the podcast, launchlab.com studios. We'll talk to you next time.