Houston Automobile Dealers Association – Caring for their communities

May 2, 2022
Houston Automobile Dealers Association

Houston Automobile Dealers Association

Caring for their communities

Business View Magazine interviews RoShelle Salinas, Exec. VP of Houston Automobile Dealers Association (HADA), for our focus on Top U.S. Auto Retailers

The Houston Automobile Dealers Association (HADA) is a non-profit corporation designed to support new car and truck dealers. For almost 80 years, HADA has been helping members to maintain good reputations, providing opportunities to build business networks, and coordinating educational opportunities that maintain a competitive automotive industry in greater Houston.

HADA provides members with educational seminars and workshops, legislative representation, community service programs, scholarship access, and other programs that elevate the auto industry and the individual communities their members serve.

Business View spoke with RoShelle Salinas, Executive VP of HADA, and Sgt. Darren Schlosser, Houston Police Fraud Department, about the latest industry insights and challenges, and the fascinating story of collaboration to prevent fraud in dealerships through the innovative Dealer Alert program.

BVM: Can you give us a brief overview of HADA?

Salinas: “The Houston Automobile Dealers Association is comprised of 187 new car dealerships in the greater Houston area – we have members from family-owned dealerships to large corporate groups, and we have associate members, which are businesses that provide services to the car dealers. We represent the dealers as a non-profit association within the community, provide advocacy and legislative lobbying, and a lot of educational and networking opportunities. We do a lot of charitable giving as well. We have a scholarship program for employees and their dependents, and any students that are in a technical program studying to be an automotive technician.

“We also support the Dealer Alert program, and a motorist assistance program (MAP) where we provide the Sheriff’s Department with free trucks for part of their organization that does free roadside assistance to the Houston area. So, we have a lot of things that keep us involved in the community, representing the dealer network, and of course the legislative side too, where we lobby for franchised rights for our car dealers.”

Houston Automobile Dealers Association

BVM: What are some of the key advocacy issues you’re addressing?

Salinas: “We work very close with the Texas Automobile Dealers Association (TADA) at the state level and our biggest issue is maintaining the franchise law and avoiding direct sales. That’s a big fight across the country for all of the automotive industry to make sure that the franchised dealership stays in practice. While there are some benefits to the direct sale, there are also downfalls such as less opportunity for service departments and getting service in a timely manner. Also with price competitiveness at different dealerships – you get that flexibility when you have a franchised system. Other things we work on are localized to Texas, as far as our inspection process along with state registration, insurance – those are the top things we advocate for in our state legislature.”

BVM: How has COVID impacted the industry?

Salinas: “Auto dealers are a very adaptive group of business people. They’ve made some fast changes with things that consumers have been asking for such as home delivery and a more streamlined buying process. That’s been a great thing for us. Right now, we’re facing the challenges of supply and demand, and the shortcomings in microchips – supply chain issues that have trickled down through the post-COVID effect. Production is picking back up and that’s a good sign but it’s definitely delayed things and created a very competitive market – not only on MSRP pricing but on used cars, too.”

BVM: What is the Dealer Alert system and how did it come about?

Schlosser: “Here at the Houston Police Department in the Auto Theft Division, we had a Financial Crimes Unit that was tasked with addressing any economic impact to a vehicle – either through a burglary or a theft. What I quickly learned when I took over this unit in 2018 is that the big area that was being under investigated was the dealership world. Whereas before we would take a burglary of a motor vehicle where a credit card was taken and it would lead to someone spending a couple hundred dollars, and we were chasing a low-value crime, we started focusing exclusively with dealership cases where somebody primarily uses a fake ID to buy a car.

“So in 2018, we met with the Houston Automobile Dealers Association and started discussing a vehicle fraud initiative. There was a three-prong attack to this. Number one: the communication between the dealerships and law enforcement was severely lacking, that’s where we came up with the Dealer Alert system. Where that came into play was getting timely information directly to the sources who need to look at it.

“When somebody’s using a fraudulent ID out in the dealership network, we want the dealer to be able to identify that ID and contact us. Or if a dealer has had an issue with a fraudulent ID being used, now we capture that information and store it in a database. We have accumulated about 800 fraudulent IDs, at this point – frequently when somebody is using a fake ID they use the same image on multiple IDs. So that Dealer Alert system has been able to open up the road for two-way communication between us.”

Houston Automobile Dealers Association

BVM: What other aspects are involved in the Dealer Alert initiative?

Schlosser: “The second part of our initiative was to train the dealerships on how to spot and identify fraud. There are several aspects of fraud that even seasoned veterans within the dealership community who do finance every day aren’t aware of – such as synthetic identity. I’ve trained over 2,200 dealership employees on how to spot and identify fraudulent information. So now we have an advocate on our side that is actually trained to look for these details.

“The real sweet spot is to catch a crook in the act and that’s the third part of our initiative. So we’ve created a program that’s being taken as a model across the nation for what we call “fraud in progress.” Basically, it means that when a dealership has a suspicion that something’s not right with an ID or the finance process, they have an outlet to contact us. If we determine that it’s fraud, we send patrol officers to the location and while they’re on the way, the dealership has the suspect sign a credit application, which locks in the fraudulent name they’re using on that purchase. Then we have them sign a purchase order that locks in how much they’re trying to steal. In conjunction with the fake ID they presented, it usually leads to two felony charges. Now patrol comes in and arrests them and we know who the actual suspect is that’s presenting the fraudulent information.

“It’s more than just dealer alerts, we have a network of fraud investigators, so we can share information and everybody’s up to date on what’s happening in the fraud world, because it changes all the time. It’s estimated that there was $7.5 billion worth of vehicle fraud in the U.S. in 2021 alone – it’s a huge business that’s almost always related to organized crime. If we could set up a system similar to ours in metroplexes across the country, I believe that once you get the partnership between the dealerships and law enforcement to come together to battle this, that’s when we start making headway.”

 

BVM: How will HADA continue to be a valuable voice for members?

Salinas: “The Houston Auto Show is our main revenue source for the association. It means a lot to the Houston community, as far as an economic impact, but it’s also a great way for local car buyers to see all the vehicles in one place and do some smart consumer shopping before they head into the dealerships.

We’ve seen changes within the marketplace of how the manufacturers want to participate in that arena. But on the local level, we hear from dealers that it really makes a difference when their brand is not at the event. So we’ve been working with our dealers to make sure everyone is fairly represented at the Auto Show and that our consumers have access to all the information they want when they’re trying to make a large vehicle purchase choice.

“Looking ahead, HADA is moving forward with a sense of adaptability with dealerships and local government. I see lots coming to light with the electric vehicle market and all of the complexities of an EV, as well as its benefits. So we’ll be working a lot on consumer and dealer education and making sure our local governments are creating the necessary infrastructure in the right areas to target all the people who want an EV. As far as the supply chain, it’s going to be interesting to see how dealership floor plans change, in regard to how many vehicles they have on the lot. I don’t know that the inventory will be nearly as high as we had before. There is a lot to learn in the coming years.”

AT A GLANCE

The Houston Automobile Dealers Association (HADA)

What: A non-profit corporation designed to support new car and truck dealers

Where: Based in Sugar Land, Texas

Website: www.houstoncardealers.com

DIG DIGITAL?

April/May 2022 Business View Magazine issue cover

April/May 2022

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