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 Joseph J. Agresta, Jr., Dealer Board Chair for Mercedes-Benz USA and President of Benzel-Busch Motor Car.
We get into how AI is transforming phone lead conversion and his vision for rebuilding manufacturer-dealer relationships around shared success.
Dealers and manufacturers need to grow the pie together instead of fighting over slices.
The franchise system only works long-term when both parties succeed together, not when one wins at the other's expense.
"I don't think that there is any model that works where the manufacturer wins and the dealer loses or the dealer wins and the manufacturer loses. That can't work long term."
This mindset shift from adversarial negotiations to collaborative business development could transform how the industry approaches everything from margin structures to facility investments.
Interest rates impact affordability more than vehicle price increases.
Higher financing costs now represent the biggest addition to monthly payments compared to pre-COVID levels.
"We were almost at zero rates. Like an unsubsidized manufacturer rate was like 2%. You know, now an unsubsidized standard rate for most manufacturers is in that 7%, ballpark, right? Unsubsidized."
While luxury vehicle prices have inflated considerably over five years, the 5+ percentage point jump in interest rates creates a larger barrier to affordability than the price increases themselves.
Click-to-call leads now dominate digital forms by a four-to-one margin.
Mobile shopping has fundamentally changed how customers prefer to connect with dealerships.
"Our click to call rate is four times greater today than it was pre-COVID. And that's a function of more people shopping on their phone rather than on a desktop."
Benzel-Busch adapted by implementing CLLEVARautomotive, an AI tool that coaches salespeople during calls, provides objective scoring, and flags missed opportunities for immediate manager intervention.
Answering customer questions first earns the right to request appointments.
The old approach of immediately pushing for showroom visits no longer works when customers can find information anywhere.
"Listening to the customer, providing exactly what they're looking for, taking some opportunity to sell yourself and sell the store, then you get it… the right to ask for an appointment at that point."
This strategy shift helped drive more qualified appointments to the sales floor, where closing rates jumped to 65-70% because customers had already decided they wanted to buy.
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Broker competition reveals gaps in your local market representation.
When ethnic or cultural brokers dominate segments, it signals the dealership isn't serving its community effectively.
"Bergen County in New Jersey is one of the most densely populated Korean markets in the United States. Some of the largest Korean companies are based right here in my backyard. LG is right here. So we want to be here with them, right? We want to make sure that we're catering to that part of the market."
After adding Korean-speaking staff, those team members became the dealership's best sales performers, proving that addressing demographic gaps delivers immediate bottom-line impact.
Serving on manufacturer boards requires a second full-time job commitment.
The dealer board chair position demands extensive time organizing discussions, tracking issues, and representing all dealers across diverse markets.
"It takes a lot of time to be a board chair for one of the manufacturers. It's like having a second job, full-time job. Just organizing the discussions and making sure that we're staying on top of the different issues that are coming up."
After three years as chair and five total years on the Mercedes-Benz dealer board, the transition back to full-time dealership operations will allow renewed focus on driving efficiency and innovation at the store level.
Facility investments deserve fair returns without operational mandates.
Dealers investing tens of millions in facilities should earn differentiated compensation for 15 years without manufacturers dictating business processes.
"They also should get an opportunity to get a fair return over a period of time. 15 years is what I think we believe is the right payback time. So don't ask me to do it again for 15 years, right? I just gave you this investment."
Brand standards and aesthetic requirements are reasonable, but the franchise model's strength lies in dealers adapting operations to their local markets rather than following corporate cookie-cutter designs.
Direct data sharing between dealers and manufacturers protects customer privacy.
Mercedes-Benz and its dealers created a unique agreement allowing anonymous data exchange that enhances the customer experience.
"Lead information can be scored, the missing pieces in a transaction or in a customer shopping journey that happened online can now be shared with the dealer without violating any kind of terms of privacy."
This direct relationship eliminates third parties while ensuring customers don't have to restart their journey when moving from manufacturer websites to dealer conversations.
Dealer innovation drives automotive retail forward, not manufacturer mandates.
The industry's century-long success comes from dealers adapting to their markets, not from top-down corporate strategies.
"Dealer innovation is what drives this business. It's what's driven automotive retail for 100+ years. And I think that's what's needed in the industry. I think that's what will continue to drive it forward. It won't be driven by the manufacturers on the retail side. It'll be driven by the dealers."
Current performance metrics and rigid requirements handcuff the industry's most innovative dealers while failing to improve underperforming stores.
AI shifts consumer shopping from price-focused to value-focused decisions.
Search engines traditionally drove customers toward the lowest price, but AI considers multiple factors when recommending purchases.
"AI is not necessarily looking at price point as being the number one driver of where somebody should buy something. If you're asking the right questions and you're kind of letting the bot do its job, it's looking for value, right? And that value can come in a lot of different forms."
This fundamental shift in how consumers research and make purchase decisions creates opportunities for dealers who focus on experience and convenience rather than just competing on price.
