We recently had the pleasure of sitting down with John Hill, Director of Acquisition Management at DSMA, to discuss his extensive experience in the automotive industry, the challenges applicants face when applying for OEM approval and his advice for navigating the process.
John, could you start by sharing a bit about your background and how you became the Director of Acquisition Management at DSMA?
My background includes 32 years with the Volkswagen Group, during which I spent two years as a regional network development manager for Audi and 10 years leading the national network development team for Volkswagen. I also led the team that established Volkswagen of America as the importer of Bugatti Automobiles and established the dealer network across North and South America. During my work with dealers across the Americas, I developed a strong understanding of what OEMs expect of a dealer applicant.
With nearly 40 years in the automotive industry, what are some of the most significant changes you’ve witnessed, particularly in the OEM approval process?
Today, OEMs have greater access to information, including background checks. In the past, we would send a written request for a background check and wait a few weeks for a response, but now there is nearly instant feedback on an applicant.
Also, the trend of greater involvement with large groups can make it more difficult for smaller operators to gain access to new points or buy/sell opportunities.
In my role with DSMA, I work closely with the team to thoroughly understand each candidate’s background and qualifications, then craft a compelling narrative that highlights why they are the ideal fit.
What are some common challenges that applicants face when applying for OEM approval for an existing dealership?
OEMs in the Southeast are especially rigorous when evaluating dealer candidates, as the region’s fast-growing economy and diverse consumer base create fierce competition. They scrutinize every aspect of a dealer’s operations, including capitalization, profitability, and sales effectiveness, while considering local economic trends and customer service indices (SSI/CSI). OEMs are particularly attentive to how well candidates align with corporate identity and customer satisfaction.
How do the challenges differ when applying for a new open point compared to an existing dealership?
The basic approval criteria remain the same, but a new point is more difficult as a dealer may be in competition with a few hundred other dealers seeking the same appointment. In a new open point application, an applicant not only has to meet the stringent OEM criteria but also needs to distinguish themselves from other highly qualified candidates. This means presenting a compelling business plan, showcasing robust financial backing and demonstrating a clear understanding of the market dynamics. It is crucial for applicants to be thoroughly prepared and exceptionally strategic in their approach.
How does your team’s experience and network with various OEMs benefit applicants?
We seek to identify any issues that may affect OEM approval, such as financing limitations, performance issues, etc. Knowing these things upfront can help us direct a candidate to the best opportunity for their situation or build a story to alleviate what we know an OEM will discover in their research on a candidate.
Our relationships with OEMs in the Southeast are built on trust and mutual understanding. This allows us to anticipate and address any issues that may arise during the approval process, whether it’s performance metrics or regional financing conditions.
How do you foresee the OEM application process evolving in the next few years?
My concern is that it will become more automated, reducing the reliance on personal relationships. AI seems to be taking over everything. I can see OEMs using it more for the more repetitive steps in the process, with minimal review at the face-to-face level, which is dangerous as the relationship between the two parties is critical to a successful partnership.
Finally, what drives your passion for helping dealerships and applicants succeed in the automotive industry?
I have been fortunate to work in this industry for over 40 years. One half of my experience has been working face-to-face with dealers and their teams, the other half was in strategic positions determining the direction of a brand. No matter which role I was in, I always tried to remember the impact that decisions have on dealers and their teams and have enjoyed seeing the effect of my work over the years. My goal has been to support dealers and to balance their goals with the expectations of the OEM, which may not always seem to be in alignment.
For expert guidance on acquisitions, including Open Point Packages, Dealer Profile Packages, and opportunities in the Southeast USA, please contact Andy Church, VP East Coast, USA at DSMA. He can provide personalized advice and support tailored to your acquisition needs. Reach out to Andy directly at andy@dsma.com for more information.
