Inside Automotive with Jim Fitzpatrick, powered by CBT News

Joe Laham Breaks Down Scout Motors’ Impact on VW and Audi Dealers

• Jim Fitzpatrick • Season 1 • Episode 58

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Premier Companies President Joe Laham joins Inside Automotive to discuss his group’s recent acquisition of a BMW dealership in Northern California and what it signals about brand confidence, market risk, and long-term strategy. Laham explains why California—despite regulatory pressure and dealer exits—still represents a compelling opportunity, particularly given BMW’s product mix and EV strength. He also shares candid concerns about Volkswagen-backed Scout Motors and its implications for franchise dealers, fixed operations, and technician retention.

Drawing from Premier Companies’ multi-brand experience, Laham outlines why he believes direct-to-consumer efforts tied to legacy automakers differ fundamentally from independent EV startups. He also reflects on recent shifts in consumer demand, lessons from 2025 performance volatility, and what may lie ahead as affordability, leasing, and used-vehicle supply shape the road to 2026.

Topics covered:

  • Why Premier Companies expanded into California with a BMW acquisition
  • Brand trust and risk management in highly regulated markets
  • Scout Motors and growing dealer concerns around direct sales
  • Potential impacts on fixed operations and technician staffing
  • Market demand shifts and outlook for affordability in 2026

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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SPEAKER_00:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at CBT. Premier Companies recently expanded its footprint with an acquisition of a BMW dealership in Northern California. Joining us today is Joe LaHam, who's the president of Premier Companies, to discuss that acquisition, how business is performing today at his group, and uh really his perspective on this Scout Motors thing being, you know, being granted a dealer license in the state of Colorado. He is also a VW dealer, N and Audi dealer. So, Joe, thank you so much for joining us on the show. Thank you, Jim. Nice to see you. Sure, nice to see you. Congratulations on uh Premier acquiring this uh this BMW dealership. You've sent me pictures of it, and it's actually absolutely beautiful. So talk to us about that. You're uh you're up there in the Northeast, in the New England area with your group and your families, and your boys run the group and uh along with you, and yet you pick up a store in California. A lot of people dealers are going, what's he thinking about buying a store in California of all places? Talk to us about that.

SPEAKER_01:

Well, it was pretty uh thank you, Jim. It was pretty interesting because um there was a point in time, beginning of last year, so about a year ago, that I had reached out to some people and said, you know, I think we should look and buy another store, and where is it and what is it? We really don't know, but if something comes along, let me know. And so a couple of months go by, and then I get a phone call from um one of my bankers, and they said, Hey, um, would you be interested in another BMW store? And I said, if I was picking any store, it would be a BMW store, and it would, it just depends on where it is. When they said California, this the first thing I thought I told you was, What the hell my tongue going on? Yeah, but when you look at the pieces that fit into this puzzle, you know, we have a couple, we're opening another BMW store in Frederick Maryland. We're in their permitting process now. And so we went there, we looked at the store, it was a couple of years old, it belonged to a group that really knows the business well, but it was a um it was a minority point with a sponsor that was sponsoring them. Okay, and things didn't work out very well between them. And you know, unfortunately, you know, we have a saying partners are for dancing, but sometimes you have to take them, right? That's right. They um it didn't work for them and they needed to just basically um move along. And so I really I said this to uh I wouldn't go there if it was another brand. Yeah, they also had Volkswagen and Audi. Uh we we have Audi, and I didn't think that that was a good fit for us with having a BMW store and then the Volkswagen Audi store. So we just purchased the uh BMW store, right? And then, like all things that we deal with on a you know, basis of how do I decide on this? Is it the right product? Is it the right place? Right, and can we put the right people in to get the right results? Yeah.

Jim Fitzpatrick:

So so let me ask you um the the the notion that it's California, because a lot of dealers, there's some large dealer groups that I've interviewed say, oh my gosh, we're pulling out of California, it's it's you know, so many regulations and this and that, and but that doesn't scare you.

SPEAKER_01:

Well, to be quite frank with you, um, it is overregulated. And what we found and what we've gone through in this short period of time, there's more to it than meets the eye. And I would agree, there's some that will accept that and some that won't. And sure, quite frankly, you know, uh I say, you know, act in the marketplace, meaning you got to react to what you need to do in that market. And we feel like with the BMW brand, we're very confident in what they are, you know, what they stand for today, right? Where they're at today, what they're going to do tomorrow, the future products, the future marketing. You know, we have a relationship with them. And so, you know, I hate to say it, but if you're really comfortable with that, you know, okay, so when in Rome, act like the Romans. When you're in California, you got to deal with those regulations.

Jim Fitzpatrick:

It's still the largest auto auto uh market in the country, right?

SPEAKER_01:

Yeah, there's a lot of cars being sold in California. Yep. And the other thing is the mix, Jim, because they're still doing you know EVs and people still buying them there. Oh, yeah. Oh, yeah. You know, and so there's in the country, if you're gonna see a percentage, the the highest is probably gonna be in that market. Yeah. And you know, BMW's got a great lineup of products from you know ice to p hev to to to full bevs to supposedly we're gonna maybe see this hydrogen vehicles. So we've got a great mix of product. We know the product mix. All the people we've dealt with at BMW are just great. I mean, we really have great relationships with all of them, right? And we're partners with them, right? Some of our partners may not want to partner with again. We'll get into that in a minute. Yeah, but with BMW, I will tell you, um, I consider them friends, and it's hard to call someone a friend in today's life we live, right? That's right. It takes a partnership, a true partnership. And so, would I go to California to buy another store? And the answer is no. But I would for BMW. If you told me tomorrow I could buy another BMW store in California, I would definitely look at it. And just, you know, thinking about this from a bigger piece of the pie, it is difficult to manage when you're cross-country.

Jim Fitzpatrick:

But but if you get the right GM in place, you know, you got nothing to worry about, right? I mean, I say you got nothing to worry about. I'm I'm making it sound easy. But look, at the end of the day, you got you got publicly traded companies that that work all over the country with two, three, four hundred dealerships, and uh, and and you know, the the president is sitting in a headquarters somewhere. So this model can work where you're in the northeast and you got a strong GM running the property, right?

SPEAKER_01:

We want to hire and partner with good people, yeah. Put the right people in the right place and get the right results.

Jim Fitzpatrick:

That's right.

SPEAKER_01:

Getting the people that understand our process, which I've talked to you about in the past, yeah. You know, we we have a we call it the pure promise, which is a one-price process. Yep. It does work, but oh, it doesn't work here, it works everywhere. As a matter of fact, the dealer in on the same auto mall that we're in is the Mercedes dealer, and he has been doing the same thing successfully in California and he's got a bunch of stores. Yeah. So when we say it doesn't work here, what it means is I don't want to do it.

Jim Fitzpatrick:

That's right. That's I'm I'm I'm a one price, I I'm I'm all bought in. And I totally, for those of you that that know me, you know that uh I'm a big proponent of that. I think it works well in today's uh business environment, and uh it shouldn't be a game we're playing where it's one number on the on the internet and then it's another number when they get in there, and you just we're we're killing the industry by not living up to these numbers. And it's it's one price settles all of that.

SPEAKER_01:

So it it levels the playing field internally, internally. Yeah. And when the consumer understands what we're really trying to accomplish, they appreciate it. And I can tell you that we've been very successful with it year over year.

Jim Fitzpatrick:

That well, that's fantastic. So let's switch gears a little bit and congrats again on that acquisition. It's it's amazing. I think it's been a great addition to your uh already stellar lineup of dealerships. But um, so let's let's change uh gears a little bit here because I I want to get your perspective on your reaction to Scout Motors, you know, being granted a dealer's license in Colorado. I've done a number of shows on this, as you know already. Um, because I think it's a big thing. I think it's a I think it's one of those things that dealers need to really pay attention to, that you've got a legacy auto group in VW saying, look, we're gonna come in with our direct-to-consumer line here of automobiles with Scout, and everything's fine. It's a totally different company. It's not part of a legacy brand. BS, it is, okay? And uh it's got dealers, Volkswagen, Porsche Audi dealerships, um, you know, tied knots right now, going, wow, we we we would love a uh an automobile like this for our lineup at either Audi or VW. Because right now, truth be known, both of those franchises are hurting a little bit, right?

SPEAKER_01:

Yeah, we have um we have just one Audi store in our group. You know, they build some good product. It's they just you know, all the compliments I pay to my friends at BMW, I can't say the same thing about the people at Audi. There's something in the juice that they drink that just doesn't come out the same way as the rest of us, Jim. I don't I don't get it. And and you know, customers like some of the product, but what they're doing, you know, Scott Kehoe ran I know our group. I know, and he was well liked by dealers. Well loved, not liked, and everybody loves Scott, yeah, including us. Yep. And he was, you know, if you heard what he said about the franchise system and all the dealerships, and now he's like turned into a freaking kamikaze pilot for crying out loud. Like, what is he thinking about? Now, I don't agree with Colorado, I don't agree with any of these. You know, when Tesla came in and they said they're independent, they were. Yeah. When Rivian says they're independent, they are right. But what what the Volkswagen group did is they bought their ticket into paradise by paying Rivian. And now a lot of the technology, and look, I what do I know? Does the Rivian and the Scout have a sister-brother relationship? They're identical because the park them all side by side is the same car. You can't do what they did in the period of time they're doing it. Now they're willing to go to market, these knuckleheads with Scout and not fix the Audi product. That's right. The Audi product was a couple hundred thousand plus units. We've fallen off tremendously. I know. I mean, month over month over month, it's like, guys, why would you do this again? Now, I don't I never thought it was going to get to this point. I always thought at some point they would take a turn. I did too. I did too. I thought when the president came out and said we're not doing this stuff anymore, I thought they would think, okay, let's build the scout plant. Let's call it a scout, but give the pickup truck to maybe Audi and the sport utility vehicle to Volkswagen or vice versa. Yeah. And build it in the US because Audi doesn't have a plant in the U.S. And you know, I don't want to portray that the only brand that I fall in love with is BMW, but but they do have a plant. They got plant Spartanberg, it's the single largest plant in the world for BMW. It's right here in our backyard. And Audi could definitely have a piece of this puzzle if they wanted it. Sure. And everybody could have a piece. There's plenty for everybody. That's right. The problem is the mentality of one brand versus another. And look at just look at it. BMW is continuing to grow. Yeah. Mercedes fell off, and now they're saying they're going to come back, which they should. Yeah. I mean, you need competition, let's be honest. It's good for all of us. Yeah, of course, of course. No question about it. That's right. I just don't think the way they're going about this now. So what's going to happen when they open up a scout service center in close proximity to one of their Volkswagen Audio Porsche stores? Yeah. You know what's going to happen? They're going to steal the technicians. They're going to and then what's going to happen after that is it's going to be I'm in business against now, granted, it's not the same product. So if someone buys one of theirs, we don't have it. Right. Right. Well, why would you want to create a whole nother? They look at our financial statements and they must think they can go to town because we're fat cats or something. You're wrong.

Jim Fitzpatrick:

So let me ask you, I and I've asked this, I think, in every interview, and I've interviewed the chairman of the VW Council, and of course, Mike Maroney, who's very well versed on this, past president of Auto Nation, and he's got VW dealerships and such. And he's in Colorado, of course, the Colorado Dealers Association, Matthew out there, and Tim Jackson, who used to be an uh NADA president of Mike Stan. And I've really, you know, spoken to so many different people, and I'll ask you this same question I asked them. Why, what's the motivation behind a company like BW deciding to take this direct-to-consumer approach? What is it about that sales process and that distribution method that they're so in love with that they're going to get all of their dealers upset with them over this particular method of distribution here in the US? What is it? What is what what do they see as the the magic sauce in all of this to take such a bold move and a risky move and also a move, as I said, that's gonna piss so many dealers off. Why, why, why do this?

SPEAKER_01:

They think that they can build a better retail sales out. You know, they got the agency model, yeah, they've got the direct in Europe, let's say. Yeah, they do. What they don't have here because of the franchise system. Right. How they're gonna get past that in every state, I don't know. But at the at the end of the day, when it's all said and done, I don't believe that anyone has been hugely successful. Let's let's let's knock off the successful ones. Rivian, no. Lucid, no. Right. I mean, some have gone out already. I know. I know. So who's been successful at this? Yeah. And Tesla was when he was the only guy, but guess what? Now that Tesla has competition, yeah, his numbers have dropped off. So I guess if you're gonna go into something that's been successful with others, maybe that makes sense. Yeah. But they're looking at us and saying, we can do what you do.

SPEAKER_03:

Yeah.

SPEAKER_01:

And yeah, they can. I guess they really can if they want to. But the reality is why do they have us as franchise dealers if they want to do that? That's right. So I I could spend hours telling you why they're doing it. I don't know why they're doing it. Yeah, I could tell you why they shouldn't be doing it. I know, I know for sure. They're gonna they're gonna tee off every Volkswagen deal, every Pusher deal, every Audi dealer. Yeah. Oh, yeah. I guess if you don't care about the the dealers, if that business slows down a little bit, it's not gonna be able to be made up with those direct sales with the Rivians. Right. Or direct sales with Scout. Because really and truly, they bought Rivian technology.

Jim Fitzpatrick:

Oh, yeah. So as you sit here today and you're we're we're now um looking at 2026 uh in front of us, what what what's your what's your take on the year? You think we're gonna have some some headwinds? You think it's gonna be a great year? What what what's your take?

SPEAKER_01:

If interest rates come in line, they have to come in line quick. We can't afford to have interest rates stay at these rates. Right. We're at three and a half to three and three quarters. Yeah. So there's a lot of margin there to come. I mean, if you can get interest rates down, look, the average home buyer is now 44 years of age. I know, not crazy. That's that's unheard of. We've run it. Unbelievable. Money real.

Jim Fitzpatrick:

Yeah. So I've got two sons in their in their 20s, and they're it's like you go out at the average price is like$450,000, the median price for a first home, and it's like, yeah, where do you go?

SPEAKER_01:

You know, you can't, you can't, Jim. And you have to have more than two incomes, really. You got to work two jobs and so I think rates will come down. Um, the used car market is still absolutely strong. Yeah. Oh, yeah. Now it's gotten to the point, Jim, where we're starting to manage that with how many new cars can you sell? How many used cars do you want to sell? Because we still need to keep the factories turning with new vehicles. Right. And so there's a real tight margin there because you know, two-year-old cars. Remember when we used to be able to buy anything we wanted? They have the rentals coming off, of course. Of course. That's all dried up. Wow. Because the leases have diminished, right? So now you got to rely upon, and it's not such a bad idea to sell more new cars if we can just get the payments in line and leasing prices and all those things. They I think the OEMs are going to adjust. Most of them are really good at doing this. Um, they didn't cause all this pain, to be honest. We can't blame them. The market was going crazy, and people got you know greedy and they took advantage of the market and they made a lot of money, and now it's payback.

Jim Fitzpatrick:

That's right.

SPEAKER_01:

Once we get it back to normal, I think you'll see it be okay. I read all the predictions, everyone says it's gonna be this, it's gonna be that, it's 16.2, 15.6. And I mean, the reality is what we care about is how many is the retail consumer purchasing.

SPEAKER_03:

That's right.

SPEAKER_01:

Not necessarily fleets and governments and all that stuff. So from a retail consumer's perspective, I think we're gonna be okay. I don't think we're gonna be up. I just think we'll be okay.

Jim Fitzpatrick:

If President Trump was watching this broadcast, which may maybe he does, um just throwing it out there. But if he was watching this broadcast and the issue of tariffs came up, what would you say to him on this issue?

SPEAKER_01:

You know, when you buy a store, I'll use this analogy. It takes 18 to 36 months to turn a store. How long does it take to turn the United States government and the economy?

unknown:

Tell me.

SPEAKER_01:

18 to 36 years. No, but being honest about it, I mean, I see what he's doing, yeah, and I recognize he's shock treating people. He's like he's punching people in the mouth with all these other things because he's trying to bring it back to this reasonableness level. Yeah. So if I was asking him, I just would rather he would find a way to soften his message. Like he's done so many good things, yeah, but he just doesn't get the message across that way.

SPEAKER_03:

Right.

SPEAKER_01:

If he would just uh temper his message, yeah, but honestly, uh his intentions are correct. He knows what he needs to do. We need to get gas prices down, we need to get the economy back on its feet. We need to bring we can't rely upon every other country in the world taking advantage of us. That's right. Look, this is the greatest country in the world. Yeah, our parents and our grandparents fought for our freedom. That's right. We are blessed with everything we could ever have. If you've been to any other country, you'll know it. Oh the socialism doesn't work. Yeah, but there's a there's a good in everything with everybody. We just need to figure this all out. Our business is an amazing business, and we've been very blessed with a lot of success in it. Not everybody's been successful in it, but not everybody should be. You know, I tell my sons the same thing. It's not easy and it's not supposed to be easy. Right, right. And just be thankful that you're the one doing what you do and not that other one. So we have we have a great business. You've done a great job of bringing some of the things to the forefront. Look, there was no CBT news 15 years ago. That's right. There wasn't.

Jim Fitzpatrick:

There's your problem.

unknown:

Yeah.

SPEAKER_01:

And look at it today. Today you're doing all kinds of wonderful things for our industry. Oh, we think we think we're going to be able to do that. We're getting more, we're getting more sophisticated. Yeah, we're getting more technology driven. I'm asking my team to put AI in everything we can do. Oh, yeah. If you're not involved in AI, you're in trouble. And we're trying to figure out how to get on that same treadmill.

SPEAKER_03:

Yeah.

SPEAKER_01:

And that treadmill moves real fast, and car guys are not that fast, right? We're still right?

Jim Fitzpatrick:

That's exactly right. It's always great catching up with you. And then by the way, for all of the reasons you just mentioned, is exactly why we need to be focused on this situation that's brewing in Colorado. Because it's also to add to that, the franchise system made up of incredible entrepreneurs is also part of what makes this country great. Is that spirit and that that that whole franchise system that's been a great distribution of millions and millions and millions of vehicles over the last hundred years? It works. So for OEM executives out there, take a listen, you know, and then you got guys like Joe LaHam right here that that is knocking the cover off the wall. And uh it's a family run, usually a family run operation. Still, even with all the publics that we hear so much about, there's still a very small portion. I think it's 7% of the dealers out there, you know, or dealerships out there are owned by a publicly traded entity. It's it's ninety three percent are. Are all made up of individuals like you that have got the passion for it.

SPEAKER_01:

So we want we want our success to penetrate throughout our entire organization, every team member, everybody in the community. Everybody should know that who the dealer is in their marketplace. And I'd like to think that we all stand very proud of what we've done and what we stand for. And we make an investment, a significant investment. That's for sure. And not just in buildings, it's in our, you know, it's the people that are the most important part of the process. That's right. Without them, we're nothing. So we need to make sure that our payrolls are going through the roof, and I'm happy to see it. Yeah. Yeah. I'm not negative about paying people more because that's what it takes to keep good people in your business. I know, really does. And if you and if they earn enough, they can they can be successful, and their success is our success.

Jim Fitzpatrick:

That's right. That's right. Joe LaHam, president of Premier Companies with his brand new BMW store in Napa Valley. Boy, thank you so much for giving us so much time here. I love your perspective on things for dealers that are listening to Joe. Uh, this guy knows, I mean, you so many of you are in the same situation he is, family run operation. He's got his incredible boys uh working with him side by side every day, running these stores and doing a phenomenal job doing that. And uh, we're so proud to have you as our friend here at CBT News that we can call on you like this and uh give us your perspective because it's with a tremendous amount of passion. I we appreciate that. So thank you.

SPEAKER_01:

Thank you so much, Jim. And we're we're so proud of having you on the other side helping us to get the message out there. That's that's what we do. Appreciate that. Thanks so much. Have a great day.

SPEAKER_00:

Yes. Thanks for watching Inside Automotive with Jim Fitzpatrick.