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Dealer grasps opportunity in electrics and fleet sales

September 3, 2021
Automobile dealers are some of the finest entrepreneurs in America, but their command of car retailing was tested as never before by the pandemic and the sudden rise of e-commerce. Now, add two more trends that are shaking up their industry: the rise of fleet sales and vehicle electrification.
Ohio megadealer Rick Ricart is leaning into those two developments as he aggressively recasts his seven new-car stores and one used-car outlet in Columbus for a different future. He’s a third-generation dealer, but Ricart said he can’t afford to live on his family’s substantial legacy. So he’s rolling up his sleeves to attack those important new areas of potential vulnerability — and immense opportunity.
Electrified vehicles aren’t going to dominate Ohio sales anytime soon, but they’re in the process of doubling in the U.S. every year or so. And while Columbus isn’t California in terms of demand for EVs, it is a college and government town with a consumer appetite for EV models that is going to be ahead of the pack.
"We want to get as far out over our skis as we can, without crashing," Ricart said. "I don’t think it’s a bad investment. As a dealer, we have to be certified [to service] all of our brands, to sell and service all the EVs coming out."
Ricart also needs to "adapt our own facilities to create charging stations and our own infrastructure," including a Level 3 DC fast charger and a "safe warehouse" for batteries and EVs that may be in for recalls. As underscored by the current problems General Motors is experiencing with onboard fires in its Chevrolet Bolt EVs, "we must have the right facility to secure and store these."
Ricart is installing charging stations now for the use of the dealership’s 550 employees, with use of them free for workers and customers. The number of charging stations could total as many as two dozen over the next three years.
"We want to be leaders in our industry rather than say we won’t put charging stations in until it’s a necessity," Ricart said. "Otherwise, from a PR standpoint, we look like we’re environment-killers. ‘This dealership wants to keep burning gas.’ People are going to want to drive their [Ford] GT on the weekends and an electric to work. It’s a balance."
Even more dramatic a change than EV sales, for now, is how quickly fleet sales have risen in importance for Ricart and other U.S. car dealers. It’s one big reason Ford said recently that it’s going to emphasize its fleet business more than ever before. "We’ve gone from private retail transactions to more people driving a vehicle that’s owned by a fleet," Ricart said. "We saw that transition begin two years ago when we sold more F Series trucks through our fleet and commercial division than through our retail showroom."
As for the fleet business, Ricart has created a dedicated division called R2B (Ricart to Business) to service the booming demand. "A lot of companies in our area are looking for a simple way to buy a package of vehicles," he said. "They may be an auto-parts chain making deliveries, a landscaping company, an insurance company that has a fleet." While individual retail customers used to drive the business, Ricart said, now demand is being led by fleet and commercial customers.
"They’ll plan ahead and let us know that they need, say, 20 cars and two big trucks within the next three to six months," Ricart said. "And it’s great when Ford Credit makes it easy for companies to buy fleets," with financial packages that include all regular maintenance and other costs of ownership in a monthly payment.
 
"The service side on fleets is really what’s pulling this along," he said. "Companies want to make their vehicles last until their accountant says it’s time to take it out of the fleet or replace it. But there is such a technician shortage throughout our industry that a lot of times those fleets and companies can’t justify what we pay a technician. So we are doing more maintenance contracts."
 
 

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