DCH Auto Group lost its minority-owned status when it was acquired by Lithia Motors Inc. in 2014.
The sale meant that the National Association of Minority Automobile Dealers lost 27 members, a fact that bothered former DCH Chairman Shau-wai Lam after the move. DCH had been owned by a group of Chinese investors.
Now Lam is looking to build those numbers back up.
In a new partnership with Lithia, Lam plans to develop the next generation of minority dealers who dream of owning their own stores but lack the capital to make it happen. Lam teamed with Lithia to form the Automotive Minority Dealer Academy, which will provide funding to promising candidates and allow them to take advantage of the group’s infrastructure.
Lam said Lithia can aid new minority owners with its “administrative expertise and skill to take care of the operational functions like legal, human resources, digital technology, finance and dealing with banks.”
Lam said Lithia will funnel capital to help minority candidates get their own stores, but they’ll have to bring some money to the table as well in order to “have some skin in the game.”
The amount of Lithia funding for minority candidates will be determined on a case-by-case basis, Lam said. Lithia, of Medford, Ore., ranks No. 5 on the Automotive News list of the top 150 U.S. dealership groups, with retail sales of 137,486 new vehicles in 2015.
NAMAD provided guidance on how the program should be structured. Lam is retiring from Lithia’s board of directors in April to focus on the initiative.
When NAMAD lost 27 members, Lam said he “felt bad about it because I was an advocate [for] increasing the minority dealer ratio. Because over 30 percent of consumers were minorities and only 6 percent of owners were minorities.”
Lam added: “For the consumers, dealers and manufacturers, it is best to have a closer match of the minority dealer representation and the minority consumer ratio.”
Damon Lester, president of NAMAD, said the Lithia program will benefit first-time owners as well as dealers who may own several stores already and are looking to expand.
Lester said the dealers will learn about Lithia’s business methods as they run the stores.
Lam “was really gung-ho with pushing it once he sold DCH to Lithia. It’s a good way for Shau-wai to use all of his talent and all of the stuff he’s learned throughout the years and pass that on,” Lester told Automotive News.
He added, “It’s probably a legacy piece for him to pay it forward. I appreciate his dedication and wanting to push this through.”