The dealership whisperer: How to turn around a failing dealership!

Welcome to another edition of expert insights from the Car Dealership Guy Podcast, an episode recap that breaks down the key takeaways from the conversation.

Today’s guest is Raul Gomila, General Manager at City Kia of Orlando, Florida. Raul shares his insights into everything from CPO sales to serving the Hispanic community, along with his advice for marketing and providing the best customer experience. Raul worked in many industries before joining the car business. He attributes his rapid success in the auto industry to the mentorship he received from leading dealers such as Rick and Rita Case.

You can stream the full episode now on YouTube, Spotify, or Apple.

1. Raul’s early career.

Like many, Raul had a unique entrance to the car business. Born in Cuba, he started his career journey dabbling in a variety of sectors, ranging from real estate to printing. During the stock market crash in the late 90s, he changed focus to work more closely with electronics and technology. By the time he transitioned to car sales, Raul had met leaders from many different cultures and walks of life, whose lessons helped drive his current success in the auto industry.

2. Entry into the car business.

After winding down his tech business, Raul’s grandmother died under tragic circumstances. “I went off the grid for a minute...I was just mad at life,” he recalls. Around six months later, a friend who owned a dealership in Miami gave him a call and asked him to help assist with a major sales event. The experience proved to be a defining moment in his life, hooking him on dealership culture for life.

3. His early successes.

One of the first stores Raul came to manage was losing roughly $1 million per year. Despite joining the business the same month that the 2008 recession hit, he was able to make the store profitable in less than a year. “It’s a series of small victories, a long, long road of small victories,” he advises. “It’s not a Superbowl, you have to win the race.” Raul believes his impressive performance during that challenging year and the strong personality it gave him has helped drive many of the partnerships he would go on to acquire.

4. Hiring the right people.

Raul urges retailers to think about the long-term costs of hiring an individual who seems less than trustworthy: such a person might generate income in the short term but will end up harming the business in the long run. Raul attributes much of his success today to hiring the right caliber of people at his stores and paying close attention to their attitudes and work ethic. When working with a new store, he advises showing up unannounced and monitoring the showroom floor to gauge the character of the team.

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5. Training for quality.

Cars are a major purchase for most consumers, which is why dealers must provide the highest quality experience possible. Unfortunately, many retailers struggle to make their buyers feel at home due to a number of mistakes. One of the most common issues is forcing buyers to repeat steps in-store they already completed online due to poor website integration. Raul believes that training can help overcome many of the obstacles to providing a good customer experience and requires his receptionists to take weekly training sessions with his BDC director.

6. Navigating the certified preowned market.

City Kia is a major certified preowned (CPO) retailer, making reconditioning an integral part of its business model. The dealership recently built a new, offsite reconditioning center to meet its needs, one of the most challenging parts of which was finding the space to construct the new department. The average reconditioning cost at Raul’s dealership varies between $1,400 and $2,100 depending on the age of the model but currently sits at around $1,740. Recouping reconditioning costs and profiting on a CPO unit can be achieved through a variety of tactics. Some stores will pack servicing costs for CPO vehicles, some tack on a higher price tag, and others use a combination of the two. Raul adds reconditioning costs to the price of the vehicle but avoids using higher service fees.

7. Reaching Hispanic car buyers.

Roughly 72% of City Kia’s customers are from this Hispanic community, well above the average dealership. However, Raul notes that grouping the entire population together is ineffective, as every demographic, from Cuban to Puerto Rican, is unique. For instance, while many are bi-lingual, some communities are more likely to only speak Spanish. That being said, Raul comments that most of his customers do have similar cultural identities, which he defines as the “Latin flavor.” Identifying and speaking to those shared ideas has helped improve the effectiveness of his marketing strategies. Other strategies, such as focusing on charity and sponsoring events have helped boost awareness of City Kia’s role in the local community.

8. Targeted marketing strategies.

Dealers must target their local communities when it comes to marketing. When he first took over his dealership, he recalls that 100% of the company’s advertising budget was aimed at white buyers. The effect of adding Hispanic voices to the storefront’s marketing content was almost immediate, bringing in many more customers from the local area. Partnering with popular voices in the community, both through traditional platforms like cable TV and newer channels like social media, has also proven effective at boosting City Kia’s sales and brand awareness.

9. Challenges facing the Florida market.

The auto landscape is still in correction mode following the COVID-19 pandemic, a process that continues to create new challenges for dealers. Labor costs have exponentially increased for City Kia, which went from employing around 80 workers before the pandemic to well over 300 today. While that’s a result of its heavy growth over the last several years, maintaining profitability during a time of price declines and an increase in employment is impossible without an increase in sales volume. “At the end of the day, whether you sell a car and make $100 or lose $100 you’ve got to sell the car,” he concludes.

10. Behind the scenes of the Kia brand.

Raul has maintained a good relationship with Kia corporate over the years, giving him special insights into the brand’s future. He notes that the company’s strength lies in its ability to follow new paths and innovate. One area the automaker is looking to grow is fleet sales, which Raul believes will help offer stability during times of weak retail demand. Kia also continues to implement advice from its dealer body, going further than manufacturers in maintaining a positive relationship with its retailers.

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