Herb Chambers talks cars, customers, competition
He discusses a boom in used cars and an electric future.
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Herb Chambers has seen the automotive business go through a series of ups and downs in the 31 years since he bought his first dealership, a Cadillac franchise in New London, Connecticut. (Disclosure: Herb Chambers is a Boston Globe Media Partners advertiser.)
This year, new car sales have leveled off after a series of outstanding sales years as the Herb Chambers Companies expanded steadily to its present 57 locations.
“The new car business generally is down 1 or 2 percent over last year in Massachusetts,” he says, “but our used car sales are up 17 percent year to date, which is compensating nicely.”
Chambers credits the used car sales surge to his company’s no-haggle “smart pricing” policy, coupled with some branding ingenuity and a liberal return-exchange policy.
“Our used car buyers have five days to return their car for a refund. For the next 25 days, they can exchange the car for one of equal or greater value,” he says.
“When Home Depot came along with its liberal return policy, I took notice. I’m sure it helped them get where they are today,” he says.
Of course, Chambers is in a good position, too, as the sixth-largest privately owned dealership group in the country.
Helping Chambers is his variety of brands. A used Honda, for example, doesn’t sell well on a Toyota lot, but instead of wholesaling that car, Chambers can relocate it internally, most likely to one of his four Honda locations: Boston, Burlington, Seekonk, or Westborough.
“Because we have almost all brands, we can offer you a better price on a trade-in,” he says. “If someone wants to trade in a Volvo at one of our Lexus dealerships, for example, we can call the Volvo dealership and get the best price we can offer. Then we have the option of remarketing it in a different outlet.”
Traditionally, large dealership groups ran each outlet as separate entities.
Today, thanks to computerization, intelligent inventory control, and internet marketing, cars can be moved as needed.
NEW ENDEAVORS: One of Herb Chambers’ most recent franchises is Lincoln in Norwood.
Here are some of his thoughts on the industry in general, Herb Chambers Companies, and on the few brands—Subaru, Volkswagen, Mazda, Tesla—he doesn’t have.
How he keeps everyone on one page: “We have a monthly 7:30 a.m. breakfast meeting for everyone,” Chambers explains. “And there’s a monthly general managers’ meeting at corporate headquarters to go over the past month and plan the next month. Sometimes people grumble about driving an hour-and-a-half that early, but they know I’m up at 4:30 a.m. to be there, too. I think the breakfast meetings make a difference or I wouldn’t do it.
“The object is to try to create a culture that’s extraordinary—for the customers and each other. Not every day is a day at the beach in this business, but in general I think my people like what they do. You can’t have happy customers if you don’t have happy employees. I take great pride in being on the Globe’s ‘Best Places to Work’ list for the last seven or eight years.”
What’s selling: “Trucks. Now, when someone says trucks, someone of my generation immediately pictures a pickup, but SUVs are classified as light trucks these days. An Escalade is a truck, so is a Lexus SUV. They’re in vogue. That’s what people want.
“Two of our newest franchises are Lincoln and Volvo. Both are going great. And so is Jaguar.”
EVs and the future: “Be ready. They’re coming and they’re going to be very popular. I’ve been in meetings in both Germany and Japan, and you’re going to see a tremendous push on EVs over the next three or four years. The biggest challenges have been the cost to build them and their range. Well, prices are coming down and range is going up.”
What he’s driving: “I drive my GMs crazy by taking a car for a week or two. I’m fascinated by what’s new, like Ford’s aluminum trucks. Of course, I love Mercedes and BMW, and I’m awaiting delivery of a new Audi A8. There’s a lot of buzz about the new Genesis brand. I’m looking forward to getting into one of those, too.”
And collecting: “I was fortunate to acquire a Porsche 918. It’s a limited edition gas/hybrid vehicle. They only built 918 of them. It’s a beautiful vehicle. By buying that, I have an option on any special editions they have.” Chambers took advantage of that option to buy a 911 R, a retro version of the legendary 911. “They took the best 911 components and built a street-legal-but-track-ready basic driver’s car,” he says. “It’s just a blast to drive.”
On Tesla: “Their business model doesn’t include dealers, and I recently read they’re starting to have trouble servicing vehicles without an established network. The 400 to 500 cars they sell in Massachusetts isn’t a significant number. When the time comes to trade that Tesla, it’s going to be difficult for a traditional dealer to value the car. I’ve driven one and wasn’t particularly impressed. For what you get, they seem overpriced in comparison with a comparable BMW, Lexus, or Mercedes.”
On Subaru: Ernie Boch, a long-time business rival, owns the Subaru distributorship in the Northeast, effectively locking out Chambers.
“We’re old competitors, and I’d love to have that brand,” says Chambers. “He’s done a remarkable job with Subaru. They have a higher market penetration in New England than anywhere else except maybe Denver.”
His reputation: “You’re born without a reputation and then build one over a lifetime. I want mine and my company’s to be good. It’s something we work on every day. We want to practice respect and accountability.”
Cars and coffee: Chambers sponsors a half-dozen Sunday morning “Cars ‘n Coffee” gatherings for antique, classic, and special interest cars each summer. “Some of the cars that come are amazing and some aren’t so great. But there’s a story with every one and a natural conversation-starter with each owner. That’s what I love about this business. There’s nothing exciting about copying machines [his original business] or appliances. People who love cars love to talk about them.”
Real estate: Chambers owns the old WLVI (Ch. 56) building next to the Globe facility on Morrissey Boulevard in Dorchester. “We originally were going to put a BMW franchise there,” he says. “Now, the plan is for a Jaguar-Land Rover dealership. However, the City of Boston wants us to hold off and see how the Globe site gets repurposed. They want the whole project to be integrated. We’re constantly looking for appropriate sites where we can store and sell cars. You want a minimum of two acres and preferably four to six. The trouble is, every time we find one, a developer seems to jump in and build vertically.”
Last word: “I can’t imagine doing anything else.”
Bill Griffith can be reached at [email protected]. Follow him on Twitter @MrAutoWriter.
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