Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Fred Emich IV, Partner at Emich Automotive.
We cover how Emich Automotive became the #1 EV retailer for Kia, the challenges Fred’s faced as Chairman of VW’s National Dealer Council, and the evolving threat Scout poses to VW dealers.
Controlling the right real estate unlocks franchise opportunities.
Fred needed to relocate his Volkswagen store in 2019 and found prime property he could own long-term, realizing early that real estate control gives dealers leverage with manufacturers.
"If you control the real estate where the manufacturers want to be, you have a much better opportunity in terms of getting an open point."
A nearby Kia store had closed, and with time remaining on his old lease, Fred pursued the opportunity, knowing ownership of the location strengthened his position.
Federal litigation delayed his Kia store opening by three years.
On the last day of the protest period in 2019, two dealers filed an injunction against Kia, and COVID moved the case from state to federal court.
"It wasn't until May of '22 that we were operating a Kia location. And that's after Kia won in federal court, blocking the injunction."
Kia funded the entire lawsuit while Fred operated a profitable used car dealership on the property, keeping the business viable through the legal battle.
Top-down belief in the product drives EV success.
Fred's stores became the #1 Kia EV dealer in America and operate the #1 and #2 VW EV dealerships nationally, supported by Colorado's strong EV market and tax incentives.
"I've driven an EV for probably three or four years. I believe in the technology. I love the cars. So from the top down, I really promote EV driving technology."
His team invested in public charging infrastructure (125kW chargers at VW and 200kW chargers under construction at Kia) to support both customers and the broader EV ecosystem.
Making EV transactions effortless accelerates volume.
His sales team used templated quotes with no-negotiation pricing that worked for both sides, similar to direct-to-consumer brands but through the dealership model.
"We had kind of templated quotes that were printed out that you could take any trim level, and you could send it. It was kind of a no-negotiation deal. It was a great deal for the customer. It was a good deal for us."
Almost all of his salespeople drive EVs themselves, making them authentic advocates who understand the performance, technology, and cost benefits firsthand.
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Losing the federal tax credit creates immediate sales pressure.
The removal of the $7,500 federal EV tax credit eliminated the primary reason customers were buying EVs at Fred's stores, where 90% of transactions were two-year leases.
"With our Chevy and VW business now, we have to now wait until that market realizes that they're willing to buy an EV for the same or more than what an ICE car costs, which was not the reason that we were extremely successful the last year and a half."
Fred describes the current environment as "wartime" as his team rapidly adjusts strategy while Kia continues supporting EV incentives.
EV service customers are more loyal than expected.
Despite lower maintenance needs, EV owners return to the dealership annually for service, and there's minimal aftermarket competition for battery repairs and specialized work.
"We've actually been happy to see that people are pretty loyal to come back to the dealership for an annual service. There's not a lot of competition in the aftermarket for that."
Battery repairs under warranty have been significant, and the weight of EVs drives tire sales, both contributing to strong service department performance.
VW dealer sentiment mirrors Nissan's struggles.
Fred has been contacted more frequently by frustrated dealers as return on sales drops to levels comparable to Nissan, without a clear short-term turnaround plan.
"The mood is pretty low right now…Our return on sales is very similar to Nissan return on sales and it doesn't necessarily seem like we have this master plan to get us out of this in the short term."
Direct conversations with VW executives have intensified as dealers push back on resource allocation toward Scout instead of supporting the core franchise network.
Product gaps and quality issues hurt brand competitiveness.
VW lacks hybrid products in a market where hybrids are succeeding, and software bugs combined with reliability problems frustrate customers in key segments.
"We don't have a hybrid product. We're either EV or ICE. And now the EV strategy has totally changed. So we're pretty much stuck with ICE, without a truck or large SUVs."
Without trucks, large SUVs, or hybrid options, VW is competing with one hand tied behind its back in the segments driving the most volume.
Scout's direct-to-consumer strategy threatens dealer trust.
VW's investment in Scout as a direct-to-consumer brand creates tension with dealers who view it as competition rather than support for the core business.
"They tell us that we are their core business, but then they need to support us like we are their core business, and not continue to spend billions of dollars on what what I call their passion projects."
The introduction of a hybrid Scout model complicates the original EV-only positioning, raising questions about what prevents any OEM from launching competing brands against their own dealers.
Employee-led philanthropy builds culture and community connection.
Fred created Emich Cares, a board of 10-12 employees across his four stores with a $100,000 annual budget to make their own decisions on charitable giving and employee hardship support.
"I like how it gets everyone involved. It's not me making the decisions on what we're donating to and who we're supporting."
The board meets monthly, rotating between stores, and has supported causes from meal programs for families in need to organizations helping battered women.
