Combating High Interest Rates in the Automotive Industry with Anthony  Cameron

Anthony Cameron is the Operations Director for the Diehl Automotive Group located in Western Pennsylvania into Eastern Central Ohio.

Here’s a glimpse of what you’ll learn:

• How Anthony transitioned from a legal career to the automotive industry  
• Why creating a solid company culture across multiple dealerships is critical to success
• The importance of educating your customers about their options as interest rates rise
• How Diehl is combating growing pains within their automotive group 
• Anthony’s predictions for when we can expect interest rates to settle back down. 

In this episode…

How can dealerships stay ahead of crushing interest rates with no clear end in sight? 

While there is no easy answer, the key is to keep your turnover rate high and to keep battling in the name of your customers. By educating your customers about their options when it comes to ownership v. leasing, you can mitigate some of the impact when it comes to sky-high financing rates while building customer loyalty for your dealership.

In the latest episode of InsideAuto Podcast, Anthony Cameron, Operations Director at Diehl Automotive Group speaks to Ilana Shabtay about the steps his automotive group has taken to try to mitigate the impact of rising interest rates on their business and his predictions for how interest rates will behave over the next few quarters. Listen in now to learn more about the light at the end of the tunnel! 

Resources Mentioned: 

• Ilana Shabtay on LinkedIn 
• Anthony Cameron on LinkedIn
• Fullpath 
• Matthew Diehl on LinkedIn 
• Corina Diehl on Linkedin
• Diehl Automotive Group
• Automotive News 

Sponsor for this episode…

This episode is brought to you by Fullpath (formerly AutoLeadStar).

Fullpath is the automotive industry’s leading customer data and experience platform (CDXP).

Fullpath enables dealers to turn their first-party data into lifelong customers by unifying siloed data sources and leveraging that data to create exceptional, hyper-personalized customer experiences.

To learn more, visit www.fullpath.com

Episode Transcript:

Ilana Shabtay:

Ilana Shabtay here, host of Inside Auto Podcast, where we interview top dealers, GMs, marketers, and entrepreneurs in and out of the automotive industry. Before we introduce today’s guest, this episode is sponsored by Fullpath.com. Fullpath is the automotive industry’s leading customer data and experience platform, CDXP. Fullpath enables dealers to turn their… first party data into lifelong customers by unifying siloed data sources and leveraging that data to create exceptional, hyper-personalized customer experiences. To learn more, visit fullpath.com. Today we have Anthony Cameron on the podcast. That’s Anthony, how are you?

Anthony Cameron:

I’m doing very well, how are you?

Ilana Shabtay:

I’m good. Thanks. Anthony is the operations director for the Diehl Automotive Group located in Western Pennsylvania into Eastern Central Ohio. So excited to have him on. So Anthony, tell us how you got into automotive.

Anthony Cameron:

Um… A little bit of a different path. Yeah, so I actually, my background was in marketing when I graduated my undergrad. A couple of years later, I went back to graduate school. So I went to law school, graduated law school, practiced for a few years. In the process, I met Matthew Diehl and Corina Diehl. He was one of my classmates was Matt. And sometime later, he had some growth on the horizon. Could feel that I was kind of getting a little and I said, hey, I’d like to be on board with an opportunity to grow with your organization. And he needed some people that he thought was good. I don’t know if he got good people, but he thought they would be good. And so I jumped on board with him then.

Ilana Shabtay:

And then did you actually leave legal behind completely or do you still practice a bit?

Anthony Cameron:

I still maintain a license. I don’t practice in the private sector at all. In-house, utilize the skill set to stay as sharp as possible. But predominantly, the day-to-day not consumed with legal matters. But I still keep the license to stay sharp

Ilana Shabtay:

Yeah, that’s smart. That’s really smart. And then how long have you been with Diehl?

Anthony Cameron:

Since 2015, I believe it was March of 2015. Yeah, started in sales, moved up to sales management and thereafter have worn virtually every other hat in the dealership level and on so from there just kind of continue to grow to the platform level now.

Ilana Shabtay:

That’s awesome. And then, and you’re overseeing how many stores now as operations director.

Anthony Cameron:

I’m tasked with the oversight of 21. That includes, we’ve got a great team from involvement, good involvement from dealer principal level and down to our platform level. I’ve got a great counterpart, Partner in Crime, as I like to call them, that works well with me, side by side, and then a great team that works around with us too. So there’s 21 total stores.

Ilana Shabtay:

That’s great. And then tell me a little bit about the day to day as operations director. I know that you do have a lot of say in marketing and you’re involved in the marketing side, but what what’s like your main response? So I mean, I’m sure you do everything, but tell us a little bit about your day to day.

Anthony Cameron:

I would like to do a little more of certain things than others, but my primary task has been training and getting our general managers truly up to speed, right? Because if we train our strong general manager and core group of platform and store director level, that trickles down. That creates a stronger team, stronger culture, and you get that kind of next up mentality from beneath you so that the growth, which Lord willing, we continue to grow, you know, you know, we’ve had some success if that continues to happen, we’re not spread too thin at that point. So it’s mostly working hands-on with the general managers, training them, working with them, bouncing ideas. And then on the other side of the coin, like you said, with the full path, a wonderful partner of ours and the other vendors that we utilize and work with, kind of having a hand in just about every other jar, you know, that we, that consumes the day to day. But best days are around when back at some of the stories when I’m seeing customers that we’ve had for a decade that I haven’t seen in a while, and kind of shaking hands and touching base with those customers.

Ilana Shabtay:

I was going to ask you, do you miss the sales? I feel like once you’re in car sales, it’s kind of hard to get out.

Anthony Cameron:

It is. It is. It is. And it’s, it’s a, it’s the, the personalities kind of, you know, when, when you’re in that sales office or you’re on the showroom floor, it’s just kind of like a contagious, the energy and the feelings like that. That’s, that’s why I love being out there walking and walking around on the floor and working with the teams as well day to day. But, um, I don’t get to do that as much as I’d like, but it’s still good to get out there once in a while and connect.

Ilana Shabtay:

Yeah, it’s like re-energizes, which is nice.

Anthony Cameron:

Yeah, yeah.

Ilana Shabtay:

What are some of the, I’d love to know a little bit more about the training actually that you do with the general managers. First of all, do you do it one-on-one or all the general managers come together or both? I’m interested in hearing how that works at Diehl. And then also, what type of training do you do? Do you do all sorts of training where you’re explaining to them about a new software, a new vendor? Is it about how to train their sales staff? Like tell me a little bit about the training that you’re doing. That’s really interesting. We don’t talk about that enough on InsideAuto Podcast.

Anthony Cameron:

So it’s working with the teams to We do one-on-one and we do in a team environment So we’ll have a monthly or quarterly meetings with our general managers get everyone together You know, it’s kind of a brain trust who’s doing what well Will identify several areas that we need to touch in on right? Industry the latest of what’s going on in the industry What’s ahead for us specific to certain OEMs and what’s? industry, right? The UAW is a perfect example of a concern that we’ve got, you know, looking ahead as everyone in our industry has. But we do it individually to the extent that we can on a more of a weekly basis. So for instance, my counterpart Ian or myself might split, you know, work on this grouping of stores, this territory, I’ll take this territory, maybe we switch a few months down the line. But we’re spending time with them day to day where we manage both the P and L, like pull up a statement for instance. Let’s find out, let’s drill into what’s happening, right? These are the certain metrics that each of our key performance indicators. We’re exceeding, we’re exceeding, we’re falling short, there’s opportunity here. And then we find, we talk through it, work through what is causing the root, what’s the root cause of the issue, all right? Or why are we doing something well? And let’s spread this around amongst the team. So a lot of times that ends up with a collaboration cross brand. So we have four Stellantis stores. We like to have all five of those Stellantis stores and managers, communicate with each other. Same message, same strengths, you know the economy is a scale work in your favor. So we do things from you know creative, anything from creative thought you know and get these guys more comfortable in a for instance a fixed operations area that they’re not too familiar with. You know that they came straight for instance out of sales. They barely know what a repair order is when they’re really starting up to train for that position. They want so we walk through them. certain things, what makes a good repair order, what makes a great customer experience, customer process, how do we do it in our organization everywhere to make sure the customer has this as close to the same excellent experience as they can get not just on the sales side but in the back of the house on the service collision etc. That’s part of it, it’s really wide scape or wide spanning. It’s a as much one-on-one as we can get and then get everybody together because together and you start to kind of get some good ideas flowing and we get some good takeaways from it. So it’s a little bit of a blend of both.

Ilana Shabtay:

And when you do implement something new, is it for the entire store or is it by brand, by region or store by store?

Anthony Cameron:

Depends on the on the undertaking or the adjustment. So something is something more like versus like pricing for on your new vehicles. Those should be the same. We’re in a similar geography, same market. We want to price the same so long your geographic region doesn’t restrict that different programs, right? You want to be on the same level there but every store has certain things about it that creates its own ecosystem. Some things that those customers in that environment too. So there isn’t a one thing is best for every store because there’s personalities of your customer base of your employees that we work with to maximize what we gain from them. So it’s not we look at what the change is and the potential risks or benefits of a widespread change. We’ve done that before. It’s worked on it before. And it’s like, we should have rolled that out one by one. And so you kind of learn and evaluate as you go.

Ilana Shabtay:

Yeah, it’s interesting. You also have just so much flex, so much to work with because you’re 21 stores, tons of brands. Like I love that you can just, you can also just test different things on different stores, different brands and figure out what’s working for every single store. So that’s cool.

Anthony Cameron:

Yeah, yeah. And every, like we said, every the customers, I mean, customers in Ohio that buy a, that buy a Hyundai might be a little different than the customers in a different part of the Roe Moor Rural PA part that buys a Chevy, you know, half ton pickup truck or a Chevy, three quarter ton. So it’s, it is, it’s very diverse. And we allow our teams for that reason to get together, collaborate, because, you know, they take some things from, from what’s working and kind of leave others.

Ilana Shabtay:

Yeah, it’s like you have your own internal 20 group. It’s great.

Anthony Cameron:

It is. It’s good. You know, our dealer principals here are involved in part of their own 20 groups. And so we get we got plenty. There’s no shortage of ideas. Right. It’s just about executing it properly.

Ilana Shabtay:

Yeah of course. Yeah, and whatever works too, right? You can have tons of ideas. So what are some of the challenges you’re seeing now? Whether that’s influenced by the economy, something external or within the stores.

Anthony Cameron:

Sure, so I guess the least sexy answer is the obvious, which is the interest rates, right? That’s impacting everyone from consumers to the buying behaviors and habits to the carrying costs for inventory, right? So you gotta run, trying to run as lean and mean as possible, right? That’s a little canned. The biggest challenge I’d say that we’ve had, hats off to Matt and Karina, the Neal family, because I saw, I just read an article in Automotive News We were top, I want to say seven or eight in the fastest growing auto groups in the country for 2020.

Ilana Shabtay:

Well, congratulations.

Anthony Cameron:

Yeah, that’s awesome. And they’re fantastic. Listen, we’re a fantastic group to work for. They’re a fantastic family to work for. But the biggest challenge I’d say is that kind of growth to double, you take this and just double it, right? And the next day and so on and keep growing and growing. The personalities, the cultures within those. the tendencies and behaviors and habits they’ve had from a previous, um, somebody selling a, uh, that that’s, that’s on the market for sale, a group, store, whatever it is, they’re not always selling because they’re not doing well. Sometimes they’re selling and they aren’t doing well. So there’s some, there’s takeaways, good, both good and bad that we need to adopt or change, drop any of the above. So the difference in the dichotomy and personnel, personalities and systems has been, you know, systems. I got, you have DMS, you know, we had at one point there was three DMS’s that we were operating within, right? We’re consolidating that now into one, but that’s a challenge to work with administratively and logistically.

Ilana Shabtay:

Yeah, for sure.

Anthony Cameron:

And then obviously just the simple scope of personalities and personnel, right? It’s when you get to that many employees, it’s it just has its own scale challenges, but it’s great. We, I love the new, the folks that joined us last year, you know, we have a high retention rate, board and I like to think it’s exclusively because I’m so charming I can’t tell you that for sure but we are a great group

Ilana Shabtay:

Sure that has something to do with it.

Anthony Cameron:

no we’ve got a great group to work for we’re open-minded we love people we love people that we work with work for and that we service so that’s an important message from the top down.

Ilana Shabtay:

Yeah. And I mean, growing pains, it sounds pretty typical based on the growth

Anthony Cameron:

Yeah.

Ilana Shabtay:

rate you’re talking about. But let’s go back for a second to the canned response that that’s how you described it. Interest rates. I know everyone’s talking about it and I know everyone’s dealing with the challenges for the most part the same way. But I would love to know, is there something if there’s one specific thing you think that you’ve changed, whether that’s with the messaging with the clients or running lean, meaning getting inventory off faster so that you guys don’t have to pay those high interest rates. Like what do you. If you could think of one or two things that really help the group when it comes to just like adjusting to these crazy interest rates, what do you think it would be?

Anthony Cameron:

Well… I mean, there’s only a limitation that you’ve got, right? So it’s not like I can tell you that we’ve created our own financial lending arm and we’re able to service our customers.

Ilana Shabtay:

That’s what you should do. Go talk to Matt.

Anthony Cameron:

It’s super easy, right? You just snap your fingers, right?

Ilana Shabtay:

So easy.

Anthony Cameron:

There’s no regulations with Finra, right? No, but it’s a… I tell you that we’ve angsted quite a bit over what the best route is, right? Were seeing a ton of financing because your finance was, what, 3% on a dollar? I mean, my last car loan, I think was a 191, like just standard financing rate, not an incentivized sub-bent rate. So like, you know, fast forward three, four years, and then you’re in this boat. So we’re struggling with, A, the amount of cash or outside lending that we have. We’ve tried to explain to outside lenders that we may not traditionally have worked with before, you know, is there something that we can get enrolled with? But with the rates arriving to We’ve just, we’ve battled for our customers. We always will continue to do so. Battle to keep the financing in house to make the transition simple and seamless. And we have inevitably seen a lot of outside financing and cash. So that’s made it challenging to a large extent for us, right? I also, it also kills me when somebody pays cash for a car because you could still make your money in the market. I don’t care whether you’re paying 6%, you should be earning nines, but that’s my… That’s not him. That’s financial.

Ilana Shabtay:

But you’re probably, like you said, you’re seeing so many more cash deals come in.

Anthony Cameron:

Right. Keep that money in the market for another 10 years and your returns will be well above what your finance charge is. But you know on the on the operational side what we’ve done to challenge that is we’re focusing harder than we ever have on turn right because your OEMs are going to ball with you give you a you know you’re going to get your credits back on the back end but holding them is just it’s crazy expensive right and the with the retail it’s the carrying costs has gone up even more than just simply the weighted interest rate because that same truck was three, five, $6,000 less three years ago.

Ilana Shabtay:

Right.

Anthony Cameron:

And so you’d think there’d be a higher, to combat the interest rate pen, you’d think there’d be a stronger lease pen. And we try to encourage our customers to lease vehicles so they’re consistently getting into a new fresh vehicle, your cost of ownership may change. Manufacturer or captive lenders haven’t come back around entirely just yet. They’re just now picking back up. But what we’ve done to, I guess, combat that is we’ve, we try to present both options, every option to our customers at the time of, you know, presentation so that they can make the most informed decision that’s gonna save them the most money, make the most sense for the store, the customer, you know, and long term and, you know, for both parties. And it’s, we haven’t done anything other than the obvious very, you know outside of the box super you know super creative because we’re a little bit we’re a little bit limited by what we can do so to combat it it’s just been sell as many cars as you can as quick as you can now that also while other dealers we get it specifically out of state our pricing vehicles at with adjustments over MSRP that’s not something that you see us or a market the same breath at this point it’s the, it’ll slowly slow down your turn. So we’re doing, we’re being a little more aggressive than what most, I’d say most other markets are being in, you know, around PA and Ohio.

Ilana Shabtay:

That’s interesting. And you’re probably also focusing so much more on your brand because you need people to just choose you guys over competition right now.

Anthony Cameron:

Right? Right.

Ilana Shabtay:

Just to get as many vehicles out. Interesting. Okay, so now before we sign off here, I’d love to know, what do you think, what are you predicting for the next 12 months in automotive? Do you think, do you think like, I don’t know, I can throw out some

Anthony Cameron:

Good, I like to hear your conspiracy theory. Throw out some numbers here.

Ilana Shabtay:

No, I don’t have any conspiracy theories, but I mean, what do you think about like, uh, the influence of EVs or, or our, do you think EVs will really be at the level that people are predicting or what are you seeing even with the EV sales? I’d love to know. Um, so we could talk about that. We could talk about, uh, interest rates. Do you think they’re actually ever going to come down? We’re just going to live like this forever.

Anthony Cameron:

I have no insider information, of course. I just tell you from my perspective, I think on the interest rate side, I think, I think you’re gonna see Q2. I would be hopeful at the Q1. You might see the first drop, but that’s what happened.

Ilana Shabtay:

Guess we have some time.

Anthony Cameron:

So we’re going to be stuck for a minute. I think you’re going to see lenders and the OEMs change their tune a little bit. They’re going to need to get more aggressive. But with a potential strike looming, even if it’s only a two, three month, six week to eight week downtime, that could throw a whole new wrench into the situation.

Ilana Shabtay:

Yeah, that’s true. That is like it like we need it.

Anthony Cameron:

Yeah, right. Like another Lord knows, we don’t need more backward parts for our customers. And then on the side of, you know, on the side of what the market is going to do as a whole, and the advent of the EVs, I think that, well, there’s no secret these EVs, the OEMs are really held if they’ve, you know, depending on where the store is located, carb state, non-carb state, you know, what kind of, you know, what kind of requirements they have had mandated down on them government, what kind of objectives they need to hit. They’re pushing certain things. So a challenge or a unique scenario is in Pennsylvania you’re getting a lot more EVs from most manufacturers. Being a carbon state then you know high. Right? So our consumers have seemed to have adopted the hybrid. The full electric is where the challenge becomes. Those are vehicles that sit, and sit.

Ilana Shabtay:

Is that because of like the battery anxiety?

Anthony Cameron:

Probably, yeah.

Ilana Shabtay:

Or, yeah, what are they calling it? Like range anxiety.

Anthony Cameron:

Yeah. And it’s because the same thing is I don’t have that. I don’t want to install 220. I don’t want to, you know, and then it’s, I don’t want to, it’s a new, still new early adopters are, you know, they’re, they’re going to take the time, uh, after, after there’s, you know, those people have adopted them, but then it’s the, it’s the, I don’t believe the manufacturers have made a way to manufacture them at a competitive enough price point to get more market share, right? They’re not cheaper than, a gas motor or anything like that. So the hybrids are like that first way in. We have a lot of people buying the plugins or the hybrids or the PHEVs, and they’re a hot item. The EVs fully, no, they stay, they set. The infrastructure is what you hear and people are still scared about it. It’s the anxiety, like you said.

Ilana Shabtay:

Yeah.

Anthony Cameron:

They perform well, they’re cool, but they’re not what people know. So I don’t think that’s something that’s gonna change.

Ilana Shabtay:

Right. It’ll take longer than what, than 12 months. That’s what you’re saying for the full adoption.

Anthony Cameron:

I think different markets. Baltimore is a lot different than Pittsburgh, you know. So, but I think it’ll still take a little bit of time, but it’s inevitable, it’s coming. It’s upon us, yeah.

Ilana Shabtay:

Yeah, yeah. Interesting. Okay. Well, thank you so much for telling us a little bit about DiehlAutomotive and your experience. It was great having you on the podcast, Inside Auto Podcast. If you like this episode, please tune in. You can find us on all your favorite streaming podcasts, Apple, Spotify, Deezer, you name it, insideautopodcast.com. Thank you again, Anthony.

Anthony Cameron:

Thank you. Appreciate it.