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U.S. Black Chamber Pressing Auto Dealers for Fair Return on Black Dollars

IN PHOTO: U. S. Black Chambers President/CEO Ron Busby signs Memorandum of Understanding with NAMAD President Damon Lester and Marc Bland, IHS vice president of diversity and inclusion
By Hazel Trice Edney, Trice Edney Wire
This year alone, African-Americans are projected to spend as much as $24 billion on new cars and other vehicles from America’s auto industry. Yet, research shows that, commensurate with their spending, Black consumers have little to show for their support of car dealerships, except the shiny new purchases in their driveways.
That’s the reason that a new agreement between the U.S. Black Chambers, Inc. and the National Association of Minority Automobile Dealers was established to start solving that problem. The purpose of the Memorandum of Understanding (MOU), signed late last month, is to forge relationships with Black vendors and suppliers with hopes to “open millions of dollars of opportunity to Black businesses across the nation,” says Ron Busby, president/CEO of the USBC. “The end goal of these agreements is to leverage USBC’s professional relationships to provide more tangible contracting opportunities for our small business members and to facilitate collaboration in the Black community.”
The announcement of the MOU took place at a press conference sponsored by Hyundai North America during the USBC’s recent 2015 School of Chamber and Business Management, an annual gathering with a goal of fostering growth of small Black businesses and economic development across the country. In a recent interview, Busby explains what the new Memorandum means to Black auto dealers and the Black community as a whole.
“The amount that African-Americans spend on vehicles is inappropriately unequal as it relates back to the number of dealerships that we own as well as the amount of money that those particular brands market to the African-American consumer,” he says. “And so what we hope that this does – this new relationship that we’ve established – is we want to showcase the power of the African-American dollar and recirculate that dollar so that our Black dealers can now increase the number of employees that they have working on their staffs.”
Busby points out that “The number of dealers that are owned by African-Americans is decreasing at a high rate. We have fewer dealers that are owned by Black folk now than we’ve ever had in history. But, yet we have more Black consumers who are buying vehicles than we ever had. We just got to support them like we have to support our Black banks as well as our Black media.”
NAMAD President Damon Lester says there’s been a drastic decrease in Black-owned dealerships. There were only 252 at the end of 2014. That’s down from a peak ownership of 795 in 2005, Lester said. That’s a 31 percent reduction in ownership in less than 10 years.
The USBC has researched several national industries to find ways to recirculate dollars back into Black businesses and the community at large. Last year the organization focused on travel and tourism “and we said we were going to spend more money with Black hotel owners,” Busby recalls. The year before that, it was Black-owned banks.
But, the automobile industry is a special challenge given the comeback of the industry, which nearly collapsed seven years ago. A multi-billion dollar government bailout largely saved the industry, but Black-owned dealerships have continued to struggle having lost thousands of employees.
Marc Bland, vice president for diversity and inclusion for IHS Automotive, which provides statistics and information on the automobile industry among others, says the USBC has the right strategy to deal with the issues – not only as they pertain to the automobile industry, but others as well.
“Activity based on facts and data…creates awareness and education, which leads to proper action and engagement,” Bland says. The USBC, NAMAD and Hyundai are playing out this strategy, he said.
“Collectively, what they did is say, ‘Hey, here’s some information that says the African-American consumer is helping to drive a lot of growth in the U.S. auto industry.’ Hyundai came and showed up, which is the initial action,” Bland recounted. “They invited me to come out as a leader from IHS to provide some fact-based data; and together the three of us, along with Ron, had a conversation which provided awareness and proper education to the attendees. And then NAMAD took the additional step of signing the MOU which says that NAMAD is going to work with Ron Busby to collectively say how can we work together to identify potential growth opportunity for Black auto dealers. And then you have Hyundai, which says they’re going to support the efforts as well.”
Bland said African-Americans represent about 8 percent of all new vehicles sold in the United States. By April of this year, Blacks had bought 373,901 vehicles, which, at a conservative
$25,000 per vehicle, could end up at $24 billion by the end of this year. He listed the eight top brands selling most to African-Americans as the following in order of sales: Toyota, Nissan, Chevrolet, Ford, Honda, Kia, Hyundai and Dodge.
Bland applauded Hyundai for having one of its executives present at the U. S. Black Chamber School of Management, “which I think is the first step.”
But, Hyundai is just a start, Bland says. “The data that we have so far is a good foundation for Ron to now have really solid conversations with pretty much all the auto manufacturers; those that are doing great – ‘Hey how can you further expand your platform today and make it even greater?’ And those that are maybe trailing behind, ‘Hey, how can you get up to par, get up to speed and then further expand that platform?'”
Busby not only has that issue, but other critical Black business issues on his plate. “The number one concern is access to capital,” he said in an interview. “And Black businesses in particular feel like it is more challenging this year to get access to the funds to grow and start businesses than they ever have before.”
Another issue often discussed in USBC circles is the question of how to convince African-American consumers to support Black-owned businesses. With an estimated spending power of $1.1 trillion, African-American economic power continues to grow exponentially. But, the average African-American dollar only stays six hours within the Black community, the USBC stated in a release.
Busby, whose non-profit USBC has a membership of 240,000 Black-owned businesses and 115 chambers in 28 states, said he found it ironic that a recent Gallop poll revealed that Hispanic and Asian business-owners say they have not felt as much economic pressures as African-Americans.
“They have not felt the discrimination or the challenge of being a minority as much as African-Americans have,” he said. “But yet we still have a very positive outlook for our future as business owners.”

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