HANOVER, ONT. — Dave Lantz and his two brothers are pumping young blood into an aging dealership body facing uncertainty in the age of high-tech disruption.
“I can’t speak for [the next] 50 years, but I think we’re really far away from ordering [cars] online and picking them up at a kiosk,” said Lantz, sales manager at Hanover Honda in this town about 360 kilometres northwest of Toronto. “I don’t know how there could be another facet to do the things we do.”
Lantz, 35; brother Rob, 36; and their 32-year-old stepbrother, Terrance Copeland, all work for their father, Larry Lantz, who took over ownership of the dealership in 2007 when it was called Town & Country Honda.
All see a long-term future in the family business, despite predictions that online shopping, the growing prevalence of ride-hailing services and the advent of autonomous and electric vehicles could render the current dealership model obsolete within the next decade.
“There’s such a human connection to the vehicles — to the whole process — that will never go away,” said Copeland, vehicle and leasing specialist at Hanover Honda. “It’s a very emotional time for purchasing a vehicle. It’s a human interaction, and that’s basically why I got into this business.”
Decisions to stick with the dealership business, such as those made by the Lantz family, are becoming tougher in an already turbulent time.
Farid Ahmad, CEO of Dealer Solutions Mergers and Acquisitions in Markham, Ont., said the number of dealers 65 and older is at an all-time high in Canada. The demographic trend also has been a major factor driving consolidation in recent years as retailers look to retire before the market turns south, he said.
“Canada and the United States have never seen so many dealers that are above the age of 65. If the previous cycles are to be believed, the car industry has peaks and drops every eight years. Well, a person that’s turning 65 years today is basically in a dilemma. Do I take what I can take [in selling the store] today, or will I last eight more years?
“Do I want to put eight more years in before it turns up again?”
Erin Kerrigan, founder and managing director of U.S.-based Kerrigan Advisors, said about 50 per cent of dealers in the United States and Canada are in the “retirement-age zone.”
Those looking to pass down the business to their children wonder whether they are up to the task of “managing this business through change” that lies ahead, she said.
More than half of dealers with adult children want to pass down the family business, said Michael Lewicki, president of Toronto-based Lewicki Automotive Consulting Ltd.
“It’s more common than it is uncommon for this process to take place,” Lewicki said. “In some cases, there is not a next generation that is capable.”
At the six-store Plaza Auto Group in Ontario, brothers Daniel, Adam and Dustin Stein make up the fourth generation owning the family business, comprising two dealerships in the Greater Toronto Area, three in Orillia, 150 kilometres north of Toronto, and one in Walkerton, 185 kilometres west of Toronto.
Tech-savvy millennials possess the digital skills needed to adapt to the ever-changing world of selling cars, said Adam Stein, fixed operations manager at Plaza Kia in Richmond Hill.
“Obviously, there’s a lot of changes that have been happening with the digital world, and [we have] knowledge of how social media and digital marketing works in our upbringing,” he said.
“But at the same time, there’s similarities to what has always been around in the car business with treating customers well.”
Father Robert Stein said his sons, who range in age from 25 to 30, have narrowed the generation gap at Plaza Auto.
“My boys have been a great help in taking our ideas to the digital world and helping me to understand the younger generation of employees and customers,” he said.
It’s a sentiment echoed by Hanover Honda’s Larry Lantz, who credits his sons with giving him a “different perspective that I wouldn’t see — newer eyes, younger eyes.”
PRESERVING ‘THE HERITAGE’
Before the Stein brothers could join the family business, their father insisted they had to first acquire university degrees and explore other career options.
Dustin, sales and finance manager at Plaza Kia, graduated from the sports-management program at Brock University in St. Catharines, Ont., but knew at a young age he wanted to work for his dad.
“It’s our family business,” the younger Stein said. “It has been around since my great-grandfather ... so it’s pretty special, and I wanted to keep going with the heritage.”
Hanover Honda’s Dave Lantz said he caught the car-selling bug from his father.
“Larry was always bringing home new cars that had that new-car smell,” said Lantz, who graduated from the Georgian College program in business administration that is focused on auto motive marketing.
“There’s new-product launches; there’s always something going on that’s interesting. You see the latest, greatest of everything.”
TECH TREND IS ‘KIND OF SCARY’
With tech giants Google and Apple racing to develop self-driving vehicles Dave Lantz admitted the future looks hazy.
“It’s kind of scary with these large tech companies like Google getting int the business,” he said. “We don’t know what they are going to bring to the ma ket. So far, technology has made the business better ... I don’t think you are ever going to pull the personal aspect out of buying cars.”
But brother Rob, Hanover Honda’s general manager, appears ready for anything.
“If they get rid of cars, maybe we’ll be the next flying-machine dealer. There will still be transportation. You’re still likely going to need a place to go to sell and service it, and we may be that down the road.”