'Auto Trends' Talks To Minority Automotive Dealer Historian Damon Lester (Two Shows)

As Auto Trends with JeffCars.com wraps up Black History Month, Damon Lester, the current owner of the Maryland-based Nissan of Bowie and the former president of the National Association of Minority Automobile Dealers (NAMAD), joins us over the next two weeks to discuss the highs and lows he encountered during his 16-year tenure at the helm the organization. 

Since its founding in 1980, NAMAD has collaborated with policy makers and auto manufacturers to establish fair and sustainable business practices for minority dealers in America.

Currently, ethnic dealers account for approximately 8 percent of total U.S. dealerships. When Lester became president of the dealer advocacy organization in 2006, the total minority dealership count was just short of its an all-time high at 1,756, according to NAMAD data stats. However, when the subprime mortgage crisis crippled the economy a few years later, 54 percent of the ethnic dealerships were forced to close their doors, bottoming out in 2010 with only 811 stores still standing.

Airing Saturdays In June: NAMAD Joins "Auto Trends with JeffCars.com" For A Two-Part Conversation In June

Damon Lester, President of NAMAD

On the hills of The National Association of Minority Automobile Dealers (NAMAD) convening in Florida next month to celebrate their 36 anniversary, Damon Lester, who has served as president of the organization since 2007, joins “Auto Trends with JeffCars.com” to talk about the triumphs and trials minority dealers have faced over the years. Lester provides both a historical and a future framework for the show’s listeners.

Video Interview: President Of Minority Dealers Organization Tells Why This Group Is Needed

At this year's Detroit Auto Show, JeffCars.com had an opportunity to connect with Damon Lester, president of the National Association of Minority Automobile Dealers (NAMAD).  Lester's organization represents every ethnic-owned new-vehicle dealership in America. This group consists of women, African A,ericans, Hispanics, Asians and American Indians.

Ethnic-Owned Dealerships

In 2009, at the height of the recession, there were 20,453 dealerships throughout America, 1,076 were NAMAD dealerships, representing 5 percent of new-vehicle dealerships. Conversely, in 2013, there were 15,800 dealerships, 1,074 were NAMAD dealerships, which represented  only 6 percent of total dealerships.

Ideally, the U. S. dealer count should represent the demographics of America. According to the U. S. Census, minorities represent close to 30 percent of the population. In most cases, whether its pertaining to employment being provided by a major corporations, shaping the electorate or examining one's household budget, if we don't track things statistically we'll never know when things are out of balance.

Seventy-Five Percent of Minority-Owned Dealerships Could Go Under This Year

We've heard about our government offering a rescue plan (bailout plan), saving the financial industry and the auto industry. However, have you heard of any requests to save minority dealers? Everyday we hear more bad news about the turbulent economy. Earlier this week the auto industry announced another dismal month of vehicle sales. Industry sales were down 32 percent from October 2007. In fact, sales at GM were so bad they toppled by almost 50 percent. Overall the industry is down close to 2 million sales for the first ten months of this year, when compared to the same period last year. Because of the unregulated mortgage industry, the credit crisis, the recent high gas prices and the U. S. auto industry not having the right mix of fuel-efficient vehicles, many dealers are struggling to stay afloat - particularly minority dealers, who are undercaptialized.

Since June, Damon Lester, president of NAMAD (National Association of Minority Automobile Dealers), says his organization has lost over 60 minority dealers. The count prior to that is estimated at another 70, bringing the combined total to 130 so far this year. On average Lester says he's been receiving seven to ten calls a week from dealers, who will either run out of cash and/or have their bank loans called-in over the next thirty to sixty days. This isn't the first time minority dealers have been in a crunch. In 1980, when NAMAD was formed, the country was in a recession and president Carter was in the White House. At that time, NAMAD requested a financial assistance package from the government. Unlike today, the average consumer car loan was in the double digits.

Twenty-eight years later, NAMAD is again requesting the assistance of our current president, seeking financial relief to help save minority dealers. If the government doesn't act soon, this could bring additional stress to the strained economy. Take a moment to read the letter, which was recently sent to president Bush, seeking assistance.

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NAMAD Sends Letter of Support to President Bush for NADA Proposal to Implement Dealer Assistance Program

Today, NAMAD president Damon Lester sent a letter to the White House urging president Bush to provide immediate access to capital by way of an Automobile Dealer Emergency Loan Program and to implement steps to assist the entire retail auto industry.
Specifically, I have asked the president to:


1. Work with the Small Business Administration to immediately provide access to capital by way of an Automobile Dealer Emergency Loan Program.

· Declare ethnic minority automobile dealerships a national economic disaster to qualify them for the Economic Injury Disaster Loan (EIDL) Program that is administered by the Small Business Administration

2. Provide refundable tax credits for car and truck buyers.

· Federal support for "cash-for-clunkers"
· Accelerated expensing/depreciation for vehicles

I've urged the president to act immediately to provide assistance to ethnic minority dealers to ensure the recovery of the nation's auto industry.

Please read the letter below:

Damon Lester

President

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Actual Letter Sent to President Bush

November 4, 2008

The President
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President:

On behalf of the National Association of Minority Automobile Dealers (NAMAD), I write to you in full support of the recent request of the National Automobile Dealer Association (NADA) for emergency financial assistance to help revitalize the auto retailing sector and allow it to lead the nation back to economic health. NAMAD is a 501c(3) non profit organization headquartered in Lanham, MD representing 2,100 ethnic minority-owned new automobile dealers, both domestic and import, in the United States.

While the entire automobile industry is suffering and majority-owned dealerships are in financial difficulty, ethnic minority-owned dealerships are failing at a more alarming rate than other dealerships. If immediate federal financial assistance is not provided to ethnic minority dealers, over 75% of them will not survive by year end. That 75% equates to over 150,000 direct and indirect jobs. In addition, there will be over $51 billion in annual gross sales tax revenue lost as a result of these dealerships closing.

Like NADA, I specifically urge you to work through the Small Business Administration to immediately provide access to capital by way of an Automobile Dealer Emergency Loan Program, consisting primarily of loan guarantees designed to provide immediate access to working capital. I also urge you to declare ethnic minority automobile dealerships in the United States a national economic disaster to qualify them for non-physical disaster loans under the current Small Business Administration Economic Injury Disaster Loan (EIDL) Program. Such programs were implemented successfully in 1980 when the nation's dealers, particularly ethnic minority dealers, were facing similar financial challenges. It was because of these types of programs that ethnic minority dealers were able to survive during the turbulent financial crisis of the 1980s. That 1980 program could serve as a model for structuring a comparable approach today.

NAMAD also strongly supports the economic stimulus initiatives suggested by NADA, including refundable credits for vehicle purchasers, vehicle loan interest deductibility, federal support for state "cash-for-clunker" programs, and accelerated expensing/depreciation for vehicles used in business.

Working together, we can stabilize capital for automobile retailers, thereby helping to ensure the recovery of our nation's auto industry and preserving the economic foundation of communities across the country.


Sincerely,

Damon Lester
President

Cc: The Honorable Harry Reid
The Honorable Mitch McConnell
The Honorable Nancy Pelosi
The Honorable John Boehner
The Honorable Jim Clyburn
Congressional Black Caucus
Congressional Hispanic Caucus
Congressional Asian Pacific American Caucus
NAMAD Board of Directors