Interview with Mike Marsh on Bill Marsh Radio

ANNOUNCER: Welcome to the Bill Marsh Chatroom brought to you by the Bill Marsh Automotive Group. Do better, a lot better at BillMarsh.com. Now here’s your host Mike Kent.



MIKE KENT: Welcome today on the Bill Marsh Chatroom we’re talking to Mike Marsh. We’re going to be talking about several things; Saturn of Traverse City, we’re going to be talking about used vehicles and if we have some time we’ll talk about some charitable endeavors. Mike, first of all, Saturn’s been in the news a lot. We’re not going to in this discussion get into speculation what’s going to happen to Saturn, because that could all change tomorrow. But, the whole idea of Saturn has been very important to the Bill Marsh Organization. What does Saturn bring to the company? Where is the value of Saturn?



MIKE MARSH: Well the value of Saturn starts back to when we first opened. Saturn was the pioneer in negotiation free selling and when they kicked it off everybody that was going to be a part of the Saturn of Traverse City team went down to weeks of training for cultures and values training. That really started what was a cultural revolution for our company. Not only was it negotiation free selling, but the culture of the dealership, you know, respect for the individual including trusting our customers were some really core principles and concepts from Saturn that we related to and then carried over to every franchise that we have today. It was just a blessing to be a part of that.



MIKE K: It has become a cornerstone then of the business?



MIKE M: Yes.



MIKE K: Saturn has announced that they will build Saturns until 2011. Did that come as a surprise to you?



MIKE M: Not really. I think that the decision for that was when GM decided to narrow their business to four core brands; being Chevrolet, Cadillac, GMC, and Buick. That did not include Saturn. But, unlike the other brands that it did not include, GM knew they had this wonderful distribution network. And that despite the economic times throughout the world someone would be interested in that retail network. Someone would be interested in that brand.



MIKE K: What are the strengths of Saturn that make it a worthwhile brand?



MIKE M: Well, Saturn is located, the retailers are located, in the best markets. They’re in the best locations in those markets. And Saturn really did their homework in who they selected as Saturn dealers. It was very, very difficult to become a Saturn dealer. As a result, and in addition to all of the training and the principles Saturn started with, they have developed a network of dealers that are well known as the best in the industry. And when I say that, we’re probably the smallest of that group. There are a lot of larger well established outstanding retailers that have created the high standards for customer satisfaction today that Saturn is known for.



MIKE K: And how do you know how you stack up to those other Saturn retailers?



MIKE M: How we stack up to them? Saturn has their own award, which is called the Summit Award. The Summit Award is based on customer satisfaction, market penetration, included in customer satisfaction is sales and service satisfaction, profitability, and community involvement. And you have to rate in the top 20% of every one of those categories. If you are outside of the top 20% of any one of those categories you don’t qualify. And we have been, in fact this year would be our third Summit Award. And that literally is of the best of the best. So it’s an honor to achieve that.



MIKE K: With that in mind then, that you have been successful with Saturn. Saturn maybe going away as of 2011; what impact does this have on Saturn of Traverse City?



MIKE M: What impact does the Summit Award have?



MIKE K: Not the Summit Award, but the fact that Saturn is kind of up in the air.



MIKE M: It has a big impact in that we have our market penetration in this market is way beyond the national average. So we have a large group of loyal customers to Saturn as well as Bill Marsh. You know, it would be a disappointment for all of us if Saturn did not have a future. However, we certainly would hope to retain those customers.



MIKE K: Well that really is the key, the customers. Isn’t it?



MIKE M: Yes.



MIKE K: What makes a Saturn customer different?



MIKE M: They tend to be a very loyal group. I think they are people that originally many of our customers today were customers of ours at the inception of Saturn at its start and have with the brand and think that they very much identify with the core principles and values of Saturn. They have been very loyal. I think they feel a part of special group, an identity that Saturn has.



MIKE K: That loyalty, I would assume, would still be around depending on what happens with Saturn, but they will be a part of your business. Correct?



MIKE M: Certainly a large part of them will. Those relationships are now with our Saturn team, our employees, with our sales people, with our service personnel, with our technicians. So, a lot of those relationships would be retained which means they would be retained as Bill Marsh customers.



MIKE K: Great. We’ve been talking with Mike Marsh. We’ve been talking about Saturn and what’s going on with it. We’re going to take a little break and when we come back we’re going to talk about used cars. So, we’ll be back with the Bill Marsh Chatroom.



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ANOUNCER: We now return you to the Bill Marsh Chatroom. Now here’s your host Mike Kent.



MIKE K: And we’re back with the Bill Marsh Chatroom talking with Mike Marsh. We’ve been talking about Saturn, the future of Saturn. Let’s talk a little about used cars if we can, because it’s a major part of your day to day job and Price Point Used Car Supercenter. What is happening with used cars right now?



MIKE M: Used cars are very strong. There’s been, in this market, a 50% decline year-to-date in new car sales. However, used car sales have remained steady, in fact, they are up a little bit. And that’s what’s very stable about the used car business. If we go back, as long as we have been tracking it, 8 or 9 or 10 years the used car market is amazingly stable. The mix of cars, you know, four or five years ago it might have been a lot of 1 and 2 year old cars that we’re selling, today it maybe more like 3 or 4 year old cars, but it’s a constant market.



MIKE K: What makes Bill Marsh any different than any other used car operation with its Price Point Supercenters?



MIKE M: A lot of things. Price Point is the end result. That is where the cars are. That is where you see them, but a lot goes into it. We have really been students of the used car business over the last 5, 6, 7, 8 years and it starts with tracking the market, tracking what’s selling, what’s not before you buy a car, before you ever trade a car and then determining what cars you are going to put on your lot. Our level of sophistication and our people involved in determining what mix of cars are put on the lot is very high level and we spend a lot of time doing that.



MIKE K: So, what’s in it for the customer?



MIKE M: We track, we know that we stock what people are looking for and that changes month to month. And so, we will stock 85, 90 cars at Price Point and we’ll sell 110, 120 on one lot and that is extremely unique to be able to do that. In addition to that, to the customer there are a lot of things. Not just what cars you put on the lot, but the thorough reconditioning we put them through. Every vehicle, the first thing we do is pull the vehicle history report. If there is anything in that report that we don’t like we do not keep the car. We wholesale, not most, a lot of cars that you see on other dealers lots were ones that didn’t meet our standards. Second, we have a very rigid 102 point inspection. We have dedicated technicians just to our pre-owned cars. And then if anybody, perhaps the best selling tool is our appearance reconditioning center. We go through and to say we clean them is an understatement, we thoroughly go through these vehicles and bring them back to an almost new standard and we’re very proud of that. And so the end result is a vehicle that is as nice and clean and thoroughly gone through as you can find and we stand behind it.



MIKE K: There is in used cars a school of thought that, ‘I don’t want to buy somebody else problems.’ When it comes to. Ok, I want you to level with me, give me the inside skinny, what are the three things, if you’ve got more that’s fine, but give me the three things that a used car salesman is not going to tell me as a customer.



MIKE M: What they may be able to keep from you is: one, the history of the vehicle. You can cover up a lot of things, but if you look real hard and do your research you’ll be able to tell if a vehicle has been in flood damage, if it’s been in a major accident where the airbags have been deployed. Those are the first things that if someone is trying to sell a vehicle like that they’re not going to come out and tell you. Secondly, customers don’t really know what a good price is for a used car. There are some guides out there, but they’re not very accurate. So, it is still unfortunately easy to sell someone a vehicle for significantly more than it’s worth and that really can’t happen at Price Point with all of the documentation that we provide to the customer. Third, I guess would be a claim that they would back it up. We like to think that we provide a lot more than a claim.



MIKE K: When it comes to, again, when you’re buying a used car, I think probably the greatest fear somebody has is am I going to buy a lemon. Is there a way that somebody can protect themselves from doing just that, buying a lemon?



MIKE M: Sure. First of all, a service contract is available to most anybody and we do recommend them. Because there are some things that will go wrong that no one can tell. But, before you buy a vehicle you want to do a vehicle history check. Check the number of previous owners. Where did they own that car? How many owners did it have? Was it in an accident? If so, what was the nature of that accident? What was the extent of the repair? Was it any type of flood damage or hail damage? The reports are getting better and better and more descriptive in their history. And then, you want to see a mechanical reconditioning report. We like to recommend to our customers that they have a third party inspect the vehicle, so they know exactly from a third party they can trust everything we’ve said we’ve done about the vehicle.



MIKE K: We’re talking with Mike Marsh of the Bill Marsh Automotive Group and talking about Price Point. You mentioned that right now is a pretty good time for used car sales. Look into your crystal ball. What do you see going on in the future when it comes to used cars?



MIKE M: I see a lot of what we’ve seen in the past. The history is a great indicator of what’s going to happen going forward. This market is going to continue to slowly and steadily grow in used vehicles. I do think there’ll be a few changes. Mostly, from the dealer end and that is that as new car leasing is drying up there aren’t as many leasing sources and there will be a scarcity of 1, 2, and 3 year old vehicles. So they will be a little harder to find, but that’s not all bad because, it will help stabilize the market a bit.



MIKE K: What’s happening with the financing of used cars? Readily available, or getting better, or getting worse, or what?



MIKE M: It’s been difficult, but it’s getting better. It’s slowly getting better. As you hear about the support that is eventually going to come to these banks and banks will start to lend more money. We’re starting to see that slowly.



MIKE K: And you see that continuing?



MIKE M: I do. Yeah, I think that things are going to continue to loosen up in the credit as the year progresses.



MIKE K: Overall, automotive market good? Bad? Getting better? Getting worse? What do you think?



MIKE M: It’s two stories. Used cars is good. It’s very solid. It’s very stable. It’s good. New cars hopefully it’s at the bottom. It’s been very difficult. The silver lining with the new cars is when we do get through all this there will be some pent up demand. There will be some dealers that will not have made it. So, for the dealers left it will be, the future will be good.



MIKE K: Thank you Mike. You’ve been listening to the Bill Marsh Chatroom. We’ve been talking with Mike Marsh about Saturn, Saturn of Traverse City, Price Point Used Cars, and the automotive market in general.



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