May 3, 2010: Industry Leader-Malcolm Smith, Malcolm Smith Motorsports
May 3, 2010
Filed under Features
Riverside, Calif., dealership owner Malcolm Smith is best known for his racing exploits on both two and four wheels. But the industry icon made national news last spring when he and his multibrand metric dealership defied a new and controversial federal law that outlawed youth motorcycles and ATVs. Saying he “finally had enough,”?Smith worked with a marketing agency to coordinate a public event that included motorcycle celebrities. The result: His public stance against the federal law was covered by a host of media, including USA Today.
What’s the biggest challenge for the industry and what should be done about it?
Financing: We have a terrible time getting people financed. It used to be if they had a 695 credit score, they got financed. Now most of the (lending) companies won’t even think about it. They’re not giving anybody money unless they’re absolutely sure they’re getting it back.
Land closures: It’s a Democratic administration and the “Greenies” have Obama’s ear. They’re trying to close a lot of things. They’ve already done it in California — Clear Creek. They’re trying to take our Green Sticker money that is supposed to go to off-road parks and they’re putting it in the (state’s) General Fund. I just see a major land grab right now. If the local forest service is having a planning meeting, the dealers need to go and get their customers to go and support all of these organizations that are helping us. There are a lot of organizations out there now so it costs a lot of money. But we need to figure out who we’re going to help and do it.
What has been the biggest challenge in your current position, and how have you dealt with it?
Having enough customers that want to pay close to retail price. Margins are really down. Everybody (dealers) wants a sale so they cut each others’ throat to get the sale. We’re trying to talk about our nice store and good personnel, but they (the consumers) don’t really care about that. They really care about the price more than anything. Luckily, a lot of the big discounters are out around our area because they couldn’t survive on those low margins. So it’s getting better. I’d rather miss 10 or 20 sales a month and make profit on the rest of them. Profit is not a dirty word.
What’s the best advice you can give to others in the industry?
Don’t be too cheap. Don’t cut the price too far. You have to make margins to pay the rent and overhead and all your costs of doing business. Build a relationship with your customers and keep the good customers that don’t mind if you make a little profit too.