Mon | Jan 22, 2018

Auto dealers face off in competing shows - The 'Circuit' takes on 'Revolution'

Published:Friday | March 10, 2017 | 12:00 AMNeville Graham
Kent LaCroix, chairman of the Automobile Dealers Association.
Adam Stewart, CEO of ATL Group.
In this November 2014 file photo, auto brands sold in Jamaica are on display at the ADA Auto Show at the National Arena in Kingston. This year's show, which should have been staged from March 10-12, 2017, was cancelled after one member, ATL Automotive, pulled out.

This weekend should have seen the biennial staging of the premier ADA Auto Show. Instead, car dealers representing some of the world's top brands have retreated to their corners and are staging competing promotions meant to gin up sales.

On one side, five dealers have created what they call the ADA Auto Circuit-Kingston Edition that directs prospective clients into their showrooms - assisted by a map circulated in the newspapers on Wednesday.

Among the teasers from Toyota Jamaica, Kingston Industrial Garage, Fidelity Motors, Stewart's Automotive, and Magna Motors Dealership is the prospect of a $1-million discount on purchase, from March 9 to 12.

On the other side, ATL Automotives Limited will be staging Auto Revolution at its showrooms at Oxford Road in Kingston, from March 10 to 12.

The ADA flyers, issued on Wednesday, appeared at first blush to be an attempt to drive sales in a weakening sales market. But chairman for the Automobile Dealers Association (ADA), Kent LaCroix, said that was far from the case. He said auto sales are up 25 per cent, a claim that appears to be borne out by the most recent port statistics showing that motor vehicle imports were up substantially last year.

LaCroix said plans for the ADA show, which would usually be staged at the National Arena, was cancelled after ATL Automotive pulled out in February.

But ATL's story varies slightly. The company says it had every intention of participating and had tried to get details about the planning from LaCroix and his team as far back as November, in order to finalise it own arrangements. But instead of information, the company kept getting assurances that everything was going well, ATL Group CEO Adam Stewart told the Financial Gleaner.

Assurances weren't enough

Stewart said such assurances were not enough, especially since it wanted to make a good showing of new brands in its stables, particularly BMW and Porsche.

Finally in February, he said, ATL decided it would do its own event and advised the ADA accordingly.

The events leading up to this week follow a shift in the dealership landscape.

Last May, ATL Automotive scored the BMW franchise away from Stewart's Automotive, and is now the master dealer for the brand across Caribbean markets. In Jamaica, it operates the dealership under the name ATL Autobahn, whereas Stewart's operated it under the name of Stewart Motors Limited. ATL currently occupies the BMW facility that was developed under Stewart Motors, but will vacate it once it finalises its own showrooms now under development in the upscale Golden Triangle at Lady Musgrave Road.

"We're supposed to be on the same team," said LaCroix. "They are members of the ADA, but they chose not to take part, and so they are having their show and the rest of the dealers are having their show," he said.

The promotional flyer for Auto Circuit promises over $10 million of dealer discounts across the four-day event.

"Each dealer will have a different theme and they are showcasing the vehicles that they would have shown at the Arena at the dealerships themselves," LaCroix said, while dismissing talk that the Auto Circuit will be a poor cousin to the biennial show.

"It's a show at each dealership, so each dealer can put their own spin on it," he said, adding that the format was decided on after ATL opted to do their own thing.

Adam Stewart said that when he pulled his company from the show it was because he had got frustrated. He said he was advised on February 7 that the show would happen on March 10-12, a timeline he described as "unworkable" and too narrow to prepare for a modern auto show.

"We made the decision within 48 hours of them notifying us. We got it, we came to Kingston, we had a meeting and I said 'Guys, this is crazy! How are we gonna tell BMW or Honda that this is what we're doing?'" he fumed.

Stewart says he pulled out because the ADA, in his opinion, was not meeting its mandate.

"As a paid-up member, I can say that I do not feel that they are keeping up with the vision of what is supposed to be world-class, but also what ATL expects. We expect to have the opportunity to be a part of something that is world-class and the ADA auto show is stuck in a bygone era," he said.

No title sponsor

Both LaCroix and Stewart confirmed reports that there was no title sponsor for the Arena show, which is necessary to cover costs.

"We were not able to secure a main sponsor for the show, and it is important that you have a main sponsor so that you can cover your costs," Lacroix acknowledged.

Stewart said when he pulled out of the show, he was not aware it would cause a cancellation of the event. He said it signalled to him that the show would have been heavily dependent on the resources that ATL would bring to the table as a participant.

"If we knew that the project was so cash-strapped, and pulling would have overturned the ADA show, we probably would have had a different conversation," said the ATL CEO.

Stewart says the money that would have gone to finance participation in ADA 2017 was ploughed into the ATL Auto Revolution show, with cash to spare, even as he declined to disclose the spend.

"Within the budget that we had planned for the ADA show, we were able to execute a stand-alone show with no scale, get title sponsorship, and a broad spectrum of sponsors, including all the banks," said the ATL boss.

"We have artistes to the extent that it will be a festival of automobiles. In two and a half years, the ADA could not put on a show that we put on in a week," he said.

The two auto shows come at a time when all auto dealers contacted say they are coming off their best year in 2016.

LaCroix says the new dealers sold more than 7,000 cars, which was 25 per cent more than the previous year.

Used car dealers were also singing the same tune, and like LaCroix, president of the Jamaica Used Car Dealers Association Lynvale Hamilton dismissed suggestions that the dealerships may be over-inventoried.

Port statistics indicate that 18,322 vehicles were imported up to June 2016, being twice the number for the same period in 2015.

Banks lining up

At the same time, there is an indication from the banks that they are lining up to score as much of the business as possible, for example, Scotiabank, JN Bank and First Caribbean are now offering special loan rates.

The car shows are usually stomping grounds for banks to write new business, but indications are that they will be stretched thin trying to cover the eight locations for the two auto shows this weekend.

LaCroix says Auto Circuit's five dealers will be pulling out all the stops at seven locations across the city, including test drives and discounts.

Stewart says ATL has spared no effort in making Auto Revolution "something out of the top drawer that could compete with Las Vegas, or anywhere for that matter". All of ATL's brands will be on show, and the event will feature test drives, entertainment, and a kids' zone.

LaCroix says the ADA plans to stage another show in November at a single venue, and targeted at all members.

"We would have wanted the big show [now], but circumstances didn't allow that. We're planning the big show for the end of this year," he said.

Stewart said he is looking forward to that show, while also stating up front that he was interested in planning the event.

"Adam Stewart is willing to underwrite the next auto show and have his team run it and assume all the risks," he declared. "Give us one shot to run a show and we will show Jamaica what we are capable of. Given one, chance we could get 25,000 to 30,000 people into that arena," he asserted.

"We look forward to a proper presentation of a plan, like any normal business plan, with a full marketing plan. Any support that the ATL Group can lend in making this show successful, including finding a title sponsor, we will lend a hand as a member of the ADA," Stewart said.