Seattle Honda Dealer Adopts Tesla & Apple Sales Elements, Learns Lessons


New Honda of Seattle dealership (rendering), Mar 2015

New Honda of Seattle dealership (rendering), Mar 2015

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Tesla Motors' direct online sales model has led to state-by-state battles with franchised dealers and their lobbyists.

While Tesla works to sell its electric cars in as many states as possible, dealers decry direct sales as a threat to healthy competition and a danger to consumers.

But what happens when a traditional franchised dealership adopts some of the practices of Tesla and the company whose retail model inspired it: Apple?

SEE ALSO: Tesla Sales Model Intrigues Volvo, Lexus, AutoNation--Though Dealers Must Remain, By Law

For one Seattle dealer, it showed that change doesn't come easily--but that it can please customers when it works.

Last year, Brad Miller decided to streamline the sales process at his Honda and Toyota stores, and began a bumpy transition to the "Apple way," according to Automotive News (via Jalopnik).

To that end, he and COO Babak Mohammadi decoupled sales sales commissions from the profitability of a sale.

2014 Honda Civic EX CVT - Driven

2014 Honda Civic EX CVT - Driven

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He also eliminated the Finance & insurance (F&I) office--where customers typically go to have their loans approved, and to be sold extras like extended warranties.

The new direction came with a slogan: "One Buyer, One Price, One Hour."

"We think we compete with the Apple Store" for customers' time, Miller said.

DON'T MISS: Dear Tesla: Car And Driver's Hilarious Take On Why Car Dealers Are Awesome

The Apple Store concept and Tesla's current retail stores were concocted by the same man--George Blankenship--who did stints at both companies.

Like Tesla, the Miller dealerships also offer haggle-free pricing, and simple finance options.

Prices and interest rates are fixed, and customers in need of financing are referred to a chart, where they can trace a line from their credit score to the amount of the loan.

2014 Toyota Corolla S - Driven, February 2014

2014 Toyota Corolla S - Driven, February 2014

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Just as at an Apple Store, buyers also have their entire transaction processed by a single salesperson--although they don't transact the sale online, as Tesla buyers do.

A touchscreen at the entrance to the showroom even lets customers select which staffmember they want to talk to--rather than getting pounced on.

The initial result of these customer-friendly changes was turnover: Most of the staff went out the door last year when traditional sales commissions vanished.

Then, sales at Miller's Honda store dropped from 100 cars a month to 70--despite a booming new-car market.

Another problem: Without F&I staff, salespeople were charged with processing loans as well as selling cars--and their learning curve was steep.

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

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Things have now improved, however.

Sales are back up to their previous rate, the staff is now better trained, and management hopes to offer its salespeople larger salaries in exchange for the extra responsibilities they have taken on.

And Miller expects things to improve further with last month's opening of side-by-side Honda and Toyota dealerships near stadiums for the Seattle Seahawks and Mariners.

"Sooner or later," he predicts, "everybody will have to sell their cars this way."

[hat tip: Hugh Crawford]

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