A Look Inside the Auto Industry

Some people may not give as much thought to cars as I do. Some people probably see them simply as a method of getting them to where they need to go. I am not one of those people. I am a car enthusiast. Ever since I was little, I have been able to identify the make and model of every passing car. I can tell you almost everything you need to know about almost every car. One of my favorite things to do is visit the different car lots around the city of Richmond.

One specific car dealership that I frequently visit is West Broad Honda, which is near the intersection of West Broad Street and Glenside Drive. Since 1999, my family has been buying cars from Mike McMillen, a car salesman at West Broad Honda. At 60, McMillen enjoys playing tennis and golf when he is not selling cars. McMillen chose to work for Honda because when he first visited the dealership, he noticed that the salesmen who worked there were very laid back, which made West Broad different from the others he had seen. The dealership also had a great location and an even better product to offer. Everyone knows Honda for their fantastic cars and stellar reliability; they practically sell themselves. The Honda Accord has been on Car & Driver’s 10 Best list a record 31 times. McMillen believed that if he worked hard, he would be able to be successful and make a good living selling these award-winning vehicles.

Mike McMillen Infront of West Broad Honda Photo Credit-Hayden Gee

Mike McMillen in front of West Broad Honda.

Honda not only relies on having a great product; it also relies on having great salespeople. McMillen has figured out a method for being successful, which is perhaps why he has been one of West Broad Honda’s top salesmen for the past 26 years. For 13 years in a row, he has also been a Honda Gold Club member, which is given to salesmen due to their high volume of sales and high rated customer satisfaction.

When many people imagine a car salesman, they may picture a shady character who would tell you the car was made of pure gold if that meant you would buy it. This image of a salesman is far from what you get in McMillen. So how does he do it? I spent the day at the dealership shadowing him, observing first-hand what the world of car buying and selling is like from the inside.

West Broad Honda from West Broad Street Photo Credit-Hayden Gee

West Broad Honda from West Broad Street.

McMillen arrives at West Broad Honda every morning around 8:30. He always starts his day by doing the things he dislikes the most. “I like to knock out the menial tasks first… then I get them out of the way, and I’m on to selling,” says McMillen. He claims this helps him to avoid procrastinating. During that time, McMillen does paperwork, makes phone calls, and completes any other work that may need to be done for the day. After he gets some of the grunt work out of the way, McMillen can move on to actually doing what he likes the most, which is selling cars. Before helping customers, he always makes certain he knows his inventory; he learns specifications and features of the various Hondas so that he can answer any questions that customers may have. McMillen always makes sure he knows the dealership’s used car inventory as well, so that he is able to tell customers how much a certain car is priced and how many miles it has on it. He also knows the specific location of each of the different models on the lot so that he can quickly pull one up to the front of the dealership to show a customer.

McMillen has a carefully detailed method for selling cars. When a customer first steps onto the lot, he approaches them and introduces himself.  He always makes an effort to learn the customer’s name. This part is a crucial element of the sales process. “If you mess up the meeting and greeting, then you’re fighting an uphill battle,” suggests McMillen. Once inside the dealership, he offers them a cup of coffee on a cold day or water on a hot day in order to make the customer feel more at home. McMillen strives to “offer the customer some hospitality and they can start to relax.” As soon as the customer is comfortable, McMillen then asks them why they chose to visit West Broad Honda. If the customer knows exactly what they want, McMillen goes to find that exact model to show it to the customer. More frequently, the customer wants to learn a little more about the different models before making a decision on a specific one. When the customer expresses interest in a certain model, McMillen then asks which trim the customer wants. The trim of the car relates to what kind of features it has, like leather or heated seats, a sunroof, navigation, and so on. McMillen always starts with the base trim and moves up from there because “in sales, you want to start low and go high.”

Once the customer has decided on a model and a trim, like a Honda Odyssey Touring Elite minivan, McMillen presents that model to the customer. He walks them around the car, pointing out a few basic features. He believes that this part of the process helps him gain credibility with the customer. “Even if the feature presentation is only five minutes, it’s five minutes more than the person down the street will give them… You know your product, and you actually care to show the customer what they are buying,” states McMillen. He has the customer sit inside the vehicle and shows some interior features. In the Odyssey, he might point out the built-in vacuum that can clean up messes.

Once the feature presentation is complete, McMillen has the customer take a test drive. He does not ask the customer whether or not they want to drive the car; he tells them to do so. Taking a test drive is crucial in making a decision on which vehicle to purchase. “You would be surprised how many customers are not offered a test drive when they go to other dealerships… I hear about it all the time,” remarks McMillen.

While on the demonstration ride, McMillen moves onto the next step: the trial close. He asks the customer whether they would like to buy the car. If they answer yes, he then tells the customer what will happen once they return to the dealership. He tells them that they will discuss price and payment, and go from there. After McMillen and the customer return to the dealership, McMillen sits down with the customer at his desk to go over the “business side” of the deal. First, if the customer has a car that they would like to trade in, McMillen has that evaluated. He believes this step in the process is more than just telling the customer what the dealership will pay the customer for their old car. This step gives McMillen the chance to ask the customer about their previous buying experiences. By asking the customer these questions, McMillen is able to learn what he should do or not do while closing the deal. Once the trade has been evaluated, McMillen presents the trade-in value to the customer, along with the sale price of the car, the monthly payments, and any down payment that is required for the purchase. These four factors are the things McMillen focuses on in closing the deal. These factors allow the customer to see what they are really paying for the car, and they allow them to tell McMillen where they want things to be, a little higher or lower.

When they’ve agreed on the numbers, McMillen asks the customer if will they buy the car depending on whether or not the dealership approves those numbers. If the answer is no, then McMillen will go back to the customer to renegotiate. If the answer is yes, then McMillen is able to present the numbers to the manager with confidence, knowing that if these numbers are approved, a sale will be made.

If everything is approved, the papers are signed, and the customer is handed the keys. However, the process does not end there. McMillen invites the customer to sit down in the car with him and go over certain features more in-depth, so that they can drive off the lot with confidence. McMillen believes that this step in the process, called the delivery, is critical. “A delivery is important because this is the last time you will see the customer, so you want to make sure the customer is happy with the car.”

The next day, McMillen emails and calls the customer personally, asking the customer how they like the vehicle. He also uses this opportunity to get feedback on the buying process he facilitated. This step “puts things on a personal level.” He gets back in touch with the customer every six months, just to make sure that everything is going well and to see if the customer or someone they know is in the market for a new car. He is sure to remind the customer that he can sell new and used cars.

While I was at the dealership, McMillen gave a quick history of the Honda Motor Company. In the 1990s, which is arguably when the brand “took off,” people were drawn to Honda because they offered small, economical cars. At that time, people were also more drawn to station wagons, which Honda offered, because they featured larger storage capacities. In response to this demand, Honda introduced the Odyssey in 1994. The car was a taller station wagon, which looked like a cross between an SUV and a station wagon. The Odyssey eventually transitioned into a minivan, which is what it is sold as today. In 1995, Toyota released the similarly sized RAV-4; however, Honda revolutionized the industry in 1997 when they introduced the CR-V. The CR-V is a small SUV that offers the storage of a wagon or a larger SUV, while maintaining the ride quality and fuel economy of a sedan. This segment, called “compact SUVs,” has exploded since Honda introduced the CR-V, which is currently the best-selling compact SUV. Other major brands have followed suit, developing their own compact SUVs. Ford released the Escape in 2001, and Nissan came out with the Rogue in 2007.  Compact SUVs are beginning to surpass the family sedan in popularity.

The Honda CR-V

The Honda CR-V.

McMillen also discussed the future of automobiles, including self-driving cars. This type of car has gained popularity in the past few years since Tesla introduced Autopilot on their Model S sedan. McMillen believes that this technology will not become mainstream until many years in the future. However, he does believe that electric cars are going to become more and more popular in the coming years. Once the driving ranges of fully electric cars get long enough and charging stations are installed in more places, this technology will become more accessible. I asked McMillen if West Broad Honda had any plans to accommodate this new technology. He said that they did not have any immediate plans to install a charging station at the dealership, since Honda does not produce an electric car or plug-in hybrid, but if and when they do, West Broad will surely support the new trend. Honda currently offers the Accord as a hybrid, but there are no current plans to offer a plug-in hybrid model.

With electric cars growing more and more popular, owning one here in Richmond is becoming more feasible, and now there are more incentives to buy one. There are more places around town that offer charging stations so that you can refuel your car while you are at the store or at the office. Many car dealerships, like Richmond BMW, Richmond Ford, Sheehy Ford, and Nissan of Richmond also offer charging stations, since they sell electric cars. In Ashland, there is a Tesla Supercharging station, which can refuel a Tesla in just 30 minutes. There are several of these charging stations around the country, and Tesla decided to put one in Ashland because of its location along the I-95 corridor.

A map of electric car charging stations in Richmond from PlugShare Photo Credit-Hayden Gee

A map of electric car charging stations in Richmond from PlugShare.com. 

However, Richmonders who own electric vehicles, or EVs, have to think about the accessibility of charging stations when they travel. Many other places do not have the availability of charging stations that Richmond has, and this makes electric cars a less sensible option in the River City. Some of the electric cars offered today have ranges that are more than adequate for the average consumer’s daily driving needs. For example, the Tesla Model S, depending on the model, can go up to 302 miles on a charge. The BMW i3 can travel up to 114 miles when it is fully charged. While these ranges are significantly longer that those of older EVs, owners may not be able to travel certain places because their destination may be outside their car’s range. Instead, many consumers are choosing a gas-electric hybrid, like a Toyota Prius, that combine a traditional gasoline engine with an electric motor. People are drawn towards hybrid vehicles because of their superior fuel economy. Also, the premium the consumer pays when they purchase a hybrid model over a regular gas-powered model has decreased, and their dependability has increased. These hybrids recharge their electric motors by taking energy generated by breaking and recharging the battery. If you drive mostly around town and do not go on road trips very often, then an electric car may be more of a feasible option. But if you do take longer trips, a hybrid is a better option.

Regardless of which you choose, both offer special benefits exclusively to owners of these environmentally friendly cars. If a hybrid or electric vehicle has the “Clean Special Fuel” license plate, owners are allowed to use HOV lanes across the state, even if they are riding alone. Unfortunately, some benefits are being taken away due to the increase in popularity of electric cars. For example, Dominion Power used to offer reduced electricity rates to electric car owners who charged their vehicles during off-peak hours, but since the popularity of electric cars is increasing, they have phased out these credits. The federal government offers purchasers of electric cars a tax credit of up to $7,500, but these credits are being reduced as electric cars and hybrids become more popular.  

An electric car charging station at Richmond BMW of Midlothian Photo Credit-Hayden Gee

An electric car charging station at Richmond BMW of Midlothian.

One final topic that McMillen and I discussed is automotive trends over the years. The trends in car buying correlate to gas prices; when they are high, people dump their gas-guzzling SUVs for more fuel efficient models. Six years ago, during the recession, no one was buying large SUVs like Chevrolet Surburbans or Ford Expeditons, because at four dollars per gallon of gas, it did not make sense to own these cars. People were trading these cars in and purchasing ones that would cost them less at the pump. The resale value of large SUVs during this time was incredibly low. Now that gas has come down to a more reasonable price, people are once again attracted to SUVs. Many of these SUVs have far superior fuel economy than older models.

Investigating car trends here at Collegiate has uncovered many interesting findings. A survey conducted among juniors and seniors showed that almost 82 percent of Collegiate students have a car that is primarily theirs, and 12 percent share a car with one or more of their siblings. Most of these cars are hand-me-downs from their parents or an older sibling. Others are given a new or gently used car by their parents. McMillen shared that customers frequently come to West Broad Honda looking for something affordable and reliable for their son or daughter to drive. He said that a used car under eight thousand dollars is one of the most sought-after vehicles. Many Collegiate students do not help with maintenance costs of their vehicle, and 49 percent of students surveyed do not pay for their own gas.

Catherine Clark (‘18) drives a 1997 Ford Taurus station wagon that was first her grandmother’s, then her father’s, and now hers. She did not have very much input in her parents’ decision of what car she has. They wanted her to drive something “safe and reliable, and [something] at not too steep of a price.” However, if she had been given the choice, Clark says that she would want “a Jeep Wrangler or maybe even a Tesla!”

Lee Kennon (‘18) drives a 2005 Chevrolet Tahoe that is a hand-me-down from her mother, and she also said that she did not have much input in the decision. When asked if she had any financial obligations relating to her vehicle, Kennon said she “has a very small source of income just from babysitting,” so when she is able, she purchases her own gas. Her parents typically pay for her gas, since she lives almost a half an hour from school.

Whether it’s your grandma’s ‘97 Ford Taurus station wagon or your sister’s ‘15 Honda CR-V, both capture my attention because both are cars. Indeed, they are both cars but their brands, their models, their engines, their wheels, and their interior features are all different, and that is what makes them captivating to me as a car enthusiast. Having such an interest in cars is why I am considering a career in the automotive industry. McMillen was also interested in cars, and that is one of the reasons he chose to be a car salesman. While working in the industry, he also realized he enjoyed working with people. Through the years, he has developed the ability to quickly form relationships with people, which is one of the many factors that has led him to be so successful at selling cars. Since he can quickly relate to customers, they are more comfortable throughout the buying process, and many of them will return to McMillen for their future automotive purchases.

Should I become a car salesman, I will try to use what I learned while shadowing McMillen and hope to one day be able to emulate his valuable skills. In addition to having an interest in cars and working with people, I am also fascinated by the rapidly-changing car industry that affects our lives every day. We have seen some of the most revolutionary innovations over the past several years with the introduction of hybrid and electric cars, as well as self-driving vehicles. Hybrids and electric cars are helping to reduce our dependence on fossil fuels. These cars have little to no emissions, which also helps to reduce our carbon footprint. Self-driving cars strive to make driving safer and bringing us closer to the ideal of accident-free roads. To be part of a such an important industry that can have such an impact on our society is pretty remarkable.

All photos by Hayden Gee unless otherwise noted.

About the author

Hayden is a junior at Collegiate School.