Three decades ago, Mike Alford wandered into a 20 Group meeting in Phoenix with his father-in-law, an auto dealer from North Carolina.
Alford, then a 27-year-old banker, was unsure of the automotive business, but after a year of mulling over his father-in-law’s suggestion of working for him, Alford accepted the offer and enrolled in the National Automobile Dealers Association’s academy.
This week, he becomes chairman of NADA.
“I feel very blessed that I was given that opportunity, and I’m really glad I took the leap,” Alford, 57, told Automotive News.
Alford worked in every department of father-in-law Carl Ragsdale’s dealership, Marine Chevrolet-Cadillac. In 1997, he bought the store. Since then, he has added the Buick and GMC franchises to his portfolio.
Alford’s early finance experience served him well in his decades running dealerships. He spent part of his banking career in the commercial real estate division and quickly learned the importance of cash flow, inventory turn and liquidity in capital-intensive industries such as commercial real estate and auto retail.
“The cyclical nature of the car business is very similar to the cyclical nature of real estate. From that standpoint, it was invaluable,” he said. “I needed to learn … the fun aspects of the [auto] business and the challenging aspects of the business: motivating, leading and setting goals and working to achieve them.”
During the past two years, as the global microchip shortage and pandemic-induced production halts limited dealers’ stock, Alford prioritized inventory turn, selling in-transit vehicles and strong fixed operations. Over the past year, used-vehicle prices have reached record highs.
As values adjust, Alford will lean on one of his old banking principles: The first loss is often the best loss. In auto retail, that can mean rather than keeping an aging vehicle, dealers should price it to market, sell it and redeploy capital to acquire an in-demand vehicle priced to market.
“That and cash flow are critically important to being successful in the automotive retail space over a long period of time,” Alford said.
Alford started with about 50 employees at his Chevy-Cadillac store in Jacksonville, N.C., near Camp Lejeune, a 246-square-mile U.S. Marine Corps base. Today, he has 100 employees at his Chevy store in Jacksonville and 70 at his Buick-GMC and Cadillac dealerships in New Bern, N.C. About 65 percent of his employees are former Marines and sailors, he said.
“As a car dealership in that community, we really have the opportunity to be involved in supporting our Marines and sailors and their military dependents. I think it’s something that is really unique,” Alford said.
His employees have a collaborative work ethic toward a common mission. Goals and strategies quickly cascade through the organization, he said.