June 23, 2021

Gp Delivers1

The excellent automotive artisans1

What Dale Pollak would have said on the NADA Show floor

Buick dealer Len Pollak had a rule for his four sons in the 1960s: No going to the NADA convention until you’re 10.

That left Dale Pollak, the youngest, in an annual state of humiliation. Not only did he have to watch his brothers take off without him, he had to endure their taunts as they called home to Gary, Ind., from places such as Miami Beach and Las Vegas.

But Dale had the last laugh. He finally made the cut, to Houston in 1969. And while his brothers eventually steered away from the car business, Dale never did. He’s been traveling to NADA shows every year since — 52 in all — until 2021.

This year, like every other showgoer, he’s attending via computer.

“It won’t have the excitement,” Pollak, 62, lamented last week from his home in Paradise Valley, Ariz. “For me, the excitement wasn’t about the make meetings, and it wasn’t even about the parties and nightlife. The excitement was the show floor.”

In recent years, Pollak has been known to hold court on the show floor, serving as an unofficial guru on the retail automotive scene.

He has earned his stripes through some 40 years in the trenches. After the family business was sold in the late 1990s, he turned to digital retailing and went on to create vAuto, a provider of inventory pricing and stocking software, in 2005.

It’s now part of dealer services giant Cox Automotive, whose NADA display has been the scene of those unscripted meetings with Pollak.

I asked him what message he would have shared this year.

“There’s a very strong reason to be optimistic,” he said. “I would also administer a very strong dose of caution about getting carried away.”

First, why the optimism?

“Success is being driven by once in-a-lifetime events,” he explained.

Namely, the factors that contributed to last year’s second-half sales rebound and robust profits are still in play. The U.S. government stimulus was like “money raining from the sky,” he said. Household savings soared. Those lucky enough to keep their jobs weren’t spending on travel or recreation, but many did buy cars.

Folks wary of taking public transportation added even more sales. And finally, though overall sales of new and used vehicles fell, demand outpaced supply. That left dealers in a position to reap gross margins at levels unseen in years.

“This year, every one of those events is still here,” Pollak said. And there’s a chance that even more stimulus money is coming.

As for that dose of caution?

“When things are really good and success comes easily, dealers lose their discipline,” he said.

To avoid that, he recommends that dealers establish target operating metrics in such areas as inventory levels, headcount, digital-lead generation and advertising spending.

Manage them actively, keep those targets in mind and have accountability. Employees should be recognized and rewarded for managing to those metrics. And should circumstances change, the targets should be adjusted.

If you don’t? “That’s when you cross to the dark side.”

Which would be a tough spot to be in, whether you’re in Gary or Miami Beach, when these one-time factors fade.