May 8, 2025 • 30 mins
In this episode, my guest is Shahin Alizadeh, President and CEO of Downtown Auto Group – a powerhouse in the automotive and real estate industries. Shahin has redefined what a dealership can be, transforming a small, struggling lot to then developing a leading edge Auto Complex
But this isn’t just another dealership success story. Shahin dives deep into how he leveraged prime real estate to create a hybrid model that generates revenue from car sales, fixed operations, and real estate development – a strategy that’s turning heads across the industry.
We explore the bold moves that took him from washing cars to managing multiple brands under one roof, the challenges of convincing OEMs to embrace a non-traditional model, and why he believes every dealer should think like a developer.
Plus, we get into the rise of Chinese auto brands, the impact of skyrocketing land values on the dealership model, and the future of automotive retail in urban markets.
If you’re looking for practical ways to elevate your dealership and tap into new revenue streams, Shahin’s story is the blueprint you need.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
MC (00:00):
This episode is brought to you by FlexDealer Auto industry.
Welcome to this special episodeof the Dealer Playbook Podcast.
I'm sitting down with MrShaheen Alizadeh.
(00:22):
I can't wait to get into thesubject matter today.
It's something we have, Ipromise you, never spoken about
on this show before.
Mr Alizadeh, thanks so much forjoining me on the podcast.
Pleasure to be here.
Well, it sounds.
From what I can understand, itsounds like you have a car
business family.
Shahin (00:41):
There are, yes, there are, two sets of cousins that
are both in two dealer groups.
There's this performance autogroup and ours is downtown auto
group.
Mine is more, shall we say,downtown centric, toronto
centric, whereas theirs is kindof a broad spectrum of locations
.
MC (01:00):
Okay, and what was your foray into the auto industry?
Shahin (01:04):
Well, it was working at a university, trying to pay
bills and washing cars, drivingparts trucks, doing whatever had
to be done.
And that led to, when I cameout, when I finished school,
looking for a more traditionaljob, and they weren't as
exciting as I had thought theywould be with having finished 16
(01:26):
years of schooling.
So I went back to selling carsand I guess in some ways I must
have done pretty well, becauseit sort of evolved into a more
fast track, if you will, salesmanagement.
And then an opportunity camealong in around 1980 to actually
pick up a small BMW Mazdadealership which at the time was
(01:48):
just about going out ofbusiness, and we kind of
resurrected it from the dead.
And that's how I got intobeverage and so I grew from
there.
MC (01:56):
I heard you say there were a lot of sleepless nights.
Shahin (01:59):
Well, anytime you start a business, I mean I remember
when I first started.
Anytime you start a business, Imean I remember when I first
started.
First of all, it was an erawhere there were opportunities
for people like me who didn'thave piles of money behind them.
It wasn't like there's a familytreasure that you drew from.
And it was tough because youhad to deal with banks, you had
(02:21):
to deal with manufacturers, youhad to deal with staffing, none
of which I had really beentotally exposed to.
So it was a learning curve.
I kind of learned as I went, butthe key was to have kind of set
a goal and say, okay, where doyou want to be in five years or
10 years or 15 years?
And that's kind of what I did,and I was fortunate enough, I
(02:42):
guess, to be able to accomplishthat in a way that you know.
Got into management quickly.
Then, as I said, got into asmall dealership and let me tell
you, when we started thisdealership, there were like six
of us and I was everything froma front desk to a sales manager,
to a salesman, to an owner, toa general manager, all positions
(03:05):
wrapped into half a dozenpeople.
But fortunately, we grew itfrom that small operation to
when I sold it in 1990, we hadover 120 employees and had one
of the more successfuloperations in the city and so
moved, looked at maybe gettingout of the car business, and
(03:28):
that was not to be.
The temptations were my wifeand I lasted all of two weeks in
a sunny spot before I said Igot to get the hell out of here.
You're not wired that way, no.
So I came back and startedfocusing on the downtown
business.
And because I lived I'd alwayslived downtown and I love
(03:50):
downtown Toronto I think it'sone of the most exciting cases
in North America and,notwithstanding whatever
political stripe you attach toit or what have you, it's a
great place.
And so I enjoy being downtown.
And so we started assemblingsome dealerships and started
with taking over a Mazdadealership downtown.
(04:11):
Then I was appointed to theSaturn Sabu Suzu dealership
which, as you know, is extinctcurrently.
It was extinct back in 2000 andsomething.
And then our big break came whenI was awarded the Toyota
franchise in downtown Torontoand a small operation, but the
(04:31):
brand was at its I wouldn't saycertainly infancy, but it was at
a time this was early ninetiesand there certainly wasn't the
kind of momentum that the brandhas today.
And so we it wasn't an easyprocess we kind of did what we
had to do and fortunate enoughto take over the competing
(04:52):
Toyota dealership down thestreet from us and consolidated
Toyota's business in the city.
And then came the reality ofhow do you deal with the?
The?
Well before we get to that,others, other brands realized
that perhaps I had kind ofgotten a feel for what's what
(05:12):
it's like to be downtown.
So I got approached by a numberof brands hyundai, nissan,
infinity, and and so we startedthese kind of makeshift
facilities all over the place,and not really because of
anything other than the factthat it was not possible to do a
traditional, you know, two-acresite in downtown Toronto that
(05:41):
could constitute a realisticrelationship between real estate
values in this market, wherelands even in by early this
would have been 2010, 11, landswere still 15, $20 million in
AFIR, and so to justify atraditional lot just didn't make
(06:04):
any sense.
So we had a fortunate enough tobe able to acquire a not just a
dealership, the Toyotadealerships site which we owned,
but next door, and we assembledroughly a five acre site, and
then it sort of became aquestion of how do you deal with
that, based on values again.
(06:24):
So we partnered up with adevelopment company and which
were traditional condo builders,you know, commercial builders
and so we turned a site, justfive acre site, into a
combination of nearly 900 condosand yeah, it's astonishing when
(06:45):
I think about it and seven,eight dealerships in that
location.
We started out with Ford, oh,and Ford was looking, ford and
Lincoln were looking toestablish themselves downtown.
So when they heard about oursort of project, they said, wow,
we're in.
So they joined our forces.
We joined forces, I should say.
(07:06):
And so they became another.
So we had Toyota, we had Ford,we had Lincoln, we had Lexus.
At another location, on Dundas,we had Hyundai Genesis, and so
we assembled these brands intoone call it big, happy family.
It was something that probablywould not have been even
envisioned 20 years ago, becausethere's so much of politics,
(07:31):
going into images, imaging andwho gets what and what's the
footprint, and so on and soforth.
But I think the OEM partnersthat I was involved with
realized that this is not amarket where you can have a
traditional business model, soyou have to think outside the
box, and they did.
Fortunately, all of them workedwith me.
(07:53):
It was not an easy process, butit took me probably from 2012,
13 till 15, about a good twoyears to get everybody on site.
Then came the city.
Then having to deal with thecity, it was next.
We got that all settled with alot of help from the development
(08:15):
partners.
They were experts in thatsubject.
So by 2016, we were startingconstruction and our first
building was our Toyota building, and then we went to the South
side and started to expand itfrom West to East, and then came
COVID in 2020.
(08:36):
Right, and so it slowed us downquite a bit.
And but by the end of 21, whatare we in 25 now?
In the 21, mid 22,?
All the brands were in the autoplexus, we call it, and it has
worked well.
I mean it's not.
Some of my colleagues come andvisit and see it and they say,
(08:59):
oh gee, I don't know how you dothis, but it actually is not
that complicated.
It's about using common senseand it's about using the most
effective utilization of landvalues, you know.
And space, I should say so wehave roughly 60 service bays
below grade that services all ofour brands.
(09:20):
We have nearly 500 spaces forparking on its four levels below
, three levels above.
And you know there are dayswhen it's really busy during the
spring busy service season.
You know you have somepressures that are a little too
much, but generally I thinkwe've managed to kind of learn
(09:44):
our way around working withthese environments.
MC (09:48):
It's not for everyone I can tell you I have.
Well, we know, based on thenumber of people I know who have
done this, which is one.
Shahin (09:54):
Now, well, I've had visits from some us retailers
who have looked at it and that'swhy I said there was a san
francisco dealer toyotadealership that the owner and
general manager came up andspent some time with me and the
next thing you know they were inautomotive news, retail and
residential in downtown SanFrancisco.
So I think we've started thetrajectory that is going to be,
(10:18):
over the course of the next fewyears, more and more taken into
consideration.
MC (10:27):
Hey, does your marketing agency suck?
Few years, more and more takeninto consideration your better
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.
So if you want to sell morecars and finally have a partner
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(10:53):
.
Let's hop back into thisepisode.
I've been doing this show for11 years.
I think this is the first timeI'm speechless.
Shahin (11:01):
Should I be proud of that, or should I?
MC (11:03):
be pissed.
Yeah Well, because my secondinclination is I don't have much
money, but how do I getinvolved?
I'm like let's go and buildresidential at dealerships all
across North America.
There's something there.
Shahin (11:19):
Well, I know some colleagues without necessarily
divulging their names that arelooking at sites that are not
necessarily in downtown area,but they also have come to the
conclusion that the land valuejust doesn't justify being a car
dealership To have a three-acresite and for vehicles to be
parked all over the place.
(11:40):
It really makes no financialsense.
I don't care where you are,unless you are in some remote
city or town in northern Ontarioor in Saskatchewan where you
don't have density, populationdensity, where you don't have
the pressures of real estatebecause of space.
Other than that, I think we'reheaded in a direction that is
(12:05):
very much aligned with what I'vedone and I've been a genius to
think about it.
It's just the pressure ofhaving to decide how do you take
a five acre site, which on itsown has considerable value, and
deploy it for an automobiledealership?
MC (12:21):
We just can't Right, right.
Well, and you?
I mean you created anotherprofit center.
We've got variable, we've gotfixed and now we have passive
real estate.
Shahin (12:30):
Exactly so.
That was the kind of incentivebecause our partners were in
that business and we made a dealwith them.
We said, look, whatever happenswith our condos, wonderful, but
we want our auto place, as wecall it, with certain amenities
at a certain price.
And that was their incentive topartner with us.
MC (12:50):
Do you know how many of the 900 residents?
Shahin (12:52):
sold out bought cars from you.
It's an interesting question.
Quite a few, quite a few.
We do offer incentives.
We do offer kind of neighborlydeals.
It's a, you know, it's a kindof a double-edged sword.
There are also some residentswho may have not realized that
(13:15):
being next to 300 employees in aseven-dealership facility has
its drawbacks too.
You know, a truck pulls updropping things off and the
neighbors get a little irate andwe have to deal with it.
But for the most part, yeah, wehave quite a few of our
neighbors that purchase carsfrom us.
(13:35):
I mean, you know, I've beendowntown now for 30 plus years
as a dealer.
And the notion of people movinginto a condo in downtown
Toronto and say, well, I reallydon't, I'll take Uber and I'll
do this or that, is a fallacy.
I really don't, I'll take Uberand I'll do this or that, is a
fallacy, because what happens isthey end up having to visit
their parents in the suburbs.
(13:55):
They end up having to gotraveling and car share programs
are a wonderful idea, but theavailability is.
You know, a friend of minewho's in that business said, you
know, from a Thursday to aSunday, forget it, there's
nothing to take.
So we're seeing peoplegravitating back to in fact, I
was reading an article inAutomotive News yesterday or the
(14:17):
day before, where younggeneration is not as adverse to
purchase of a car, mainly fortransportation.
They're not as much into thestatus of any particular brand,
but they really need to havethat freedom and to be able to
just feel that they can jump intheir car and go somewhere Sure,
and that's not something youcan do with CarShare and with
(14:42):
Uber and the rest of it.
MC (14:43):
I'm not one for curveballs, but given your vast experience,
I have to ask you this.
I was just in Holland speakingat some events there.
In that market there must havebeen 30 of the Chinese auto
brands.
Shahin (14:58):
Right.
MC (15:00):
Are you watching that market ?
What are your thoughts on howthat might impact Canada and
North American markets?
Shahin (15:09):
Well, the political landscape has pretty well
defined their growth.
You get BYD is now a largerelectric producer electric
producer than Tesla will ever bethere by a long shot and so
what you've got now is a sort ofalmost a hold off, a holding
(15:29):
pattern for the Chinese.
Everyone in North America isfearful.
Okay, what happens?
The problem with the Chinesebrands is, let's be honest, the
Chinese are great visionaries,great executors, but they don't
play it fair.
They don't always play it fairwhen it comes to pricing, when
(15:51):
it comes to what it takes to.
I saw an article that if youwere to produce, even in China,
some of the vehicles that arebeing sold at ridiculously low
prices, you'd go out of business.
But there you have governmentsupport, you have these big
conglomerates.
MC (16:10):
There's an agenda.
There's an agenda for sure.
Shahin (16:11):
So am I worried?
Well, I think I'm getting to apoint in my career that in my
lifetime I don't think they'llbecome a huge threat.
And mainly because, even ifthey assumed, even if one were
to assume that they would havesome traction, they would have
to set up a dealer network.
(16:32):
They'd have to set up service.
Sure Right, it's a long-.
MC (16:35):
There's logistics.
Involved politics.
There's logistics involved.
Shahin (16:38):
So, listen, I drove a Chinese.
Someone brought me one a coupleof years ago last year actually
, I drove one of the Chinesebrands and I was very impressed
with it.
I mean from a vehicle, face andfinish and all that.
It's not something that youknow.
It's not the same Chinese as 50years ago when we looked at a
Chinese mechanic.
But I think there's too much,in my opinion, there's too much
(17:03):
baggage with the whole processof trying to launch the Chinese
product.
And in fact, in Europe they'vebeen quite successful sure?
MC (17:11):
yep, yeah, I was.
I mean, I was blown away by it,so that that that makes all the
sense in the world.
The second thing I want to pickyour brain on is you've seen
many ebbs and flows now in ourindustry yes in addition to
maybe at times creating your ownin figuring out the real estate
.
What's your take on this wholetariff thing?
(17:33):
Do you think there's a biggeragenda at play?
Shahin (17:37):
I you know, if you were dealing with logic and rational
thinking, you would not evenconsider it.
Quite frankly, regardless ofthe disproportionality of trade
balances, you know, thepresident of the United States
claims that they're subsidizingus by $200 billion.
(17:57):
That's just a trade surplus.
I mean, it's as simple as that,and I don't think the man is
not smart enough to know the bigdifference.
So I think there's politicsinvolved, there is posturing
involved, but there is, I don'tknow.
I mean, are we talking 51ststate?
I don't think so.
Are we talking, you know,sending troops to Ottawa?
(18:19):
No, I don't think so.
I don't think so.
So you know again, I've been atthis game long enough.
I remember the days when thegovernment of Canada prohibited
us from bringing so many importsfrom various countries and we
were limited.
If you were a Japanese cardealer which I was you couldn't
(18:41):
get what you wanted because theyhad quotas.
So I've seen ridiculousdecisions like that as well take
shape.
But at the end of the day, ourbiggest problem with our
(19:07):
industry is that politicalshifts don't always align with
where the OEMs are headed for Iwas at the conference with CADA
and speaking to a couple of OEMpresidents, both of whom say you
know what, when you think aboutall the anecdotal parts of this
tariff business, the reality isthe OEMs have to have a window
that they can decide what isnext, what comes next and
(19:27):
unfortunately politics has takenover.
I mean, the Zev mandate that wasenacted is you know both sides
of the border, we seem to prettywell.
You can kiss that one goodbyeas far as I'm concerned.
So I think the tariffs are atalking point.
It's negotiations, it'sposturing, I don't know, I'm not
(19:50):
an expert.
It's negotiations.
MC (19:51):
It's posturing?
I don't know.
I'm not an expert, well,although given a very clear and
wisdom-filled answer on that, soI don't know who might have to
rethink the expert thing.
For sure you know a lot.
There's obviously any of theconferences or trade shows or
(20:15):
events that we attend in thisindustry tend to talk about the
friction, or potential friction,that exists between the dealer
body and the oem.
You know, from your vantagepoint now, working with many
different oems, what do youthink the solution is to this?
How do we come together and say, well, we are the distribution
network and you are the, youknow, the creation network.
(20:36):
Let's find a path that's, youknow, for the benefit of the
customer and get past this kindof one sidedness that we tend to
always fight against?
Shahin (20:46):
I wish I had a.
That's a discussion.
That's, as I said to Rose,we're not going to cover in 30
minutes.
MC (20:54):
That's a discussion that needs 30 days.
Shahin (20:57):
I'm always.
I have served on dealeradvisory boards, I've served on
dealer councils, I've served atthe regional marketing and you
know, 44 years of being a dealeryou tend to.
You've done it all, I've doneit all, but one thing that I
think has become over the lastfew years much more clear is
that neither side can afford tokind of work in isolation Not
(21:22):
the dealers and nor the OEMs.
There has to be a partnership,especially given the wacky
governmental side of things.
So for us to get together andhave a three-ring circus between
us, the OEMs and the government, we would lose.
So I think the solution, in myopinion and I've shared that
(21:44):
with my OEM partners is apartnership.
It's to define what is the bestapproach to combat not just
tariffs but market conditionsand ZEV mandates and you name it
.
So traditional conflicts thatwe've had between dealers and
(22:04):
OEMs are, in my opinion, andOEMs are, in my opinion, pale
compared to the bigger picture,which is what is the future of
retailing?
What do we want?
Is it direct sale has workedfor some, hasn't worked for a
lot.
Is it a?
You know, I have a Genesisoperation distributorship, as we
(22:25):
call it.
It's very different than thetraditional relationship.
We don't inventory cars andit's worked out well, but it's
still a partnership.
It's not like there is a heavyhand or hanging over your head
to tell you what to do.
It's just we have upfrontpricing, we have consistency in
(22:47):
how the 30, whatever number ofdealers there are, how we all
behave, and I think that's thekind of format that can lead to
a more sustainable long-termplan, because we know it's going
to change.
One of the things that Ienvisioned within our Aut plex
(23:08):
was the flexibility to be ableto change If things happen, if
adversarial things happenbetween two brands and things
don't go well or at leastsomething happens and somebody
shuts down and decides to moveon.
You have to be flexible and theonly way you can maintain that
flexibility, in my opinion, isby working together and be true
(23:31):
partners.
The governments, in my opinion,will never be anybody's partner
.
MC (23:34):
No, I agree, that's my personal opinion.
They can't even figure out howto be each other's partner
Exactly.
Shahin (23:39):
Two parties, three parties I don't care how many
parties you have From apolitical perspective, and both
here, US, Europe.
Political processes aredysfunctional, yeah, and they
can't decide for themselves, asyou stated, how to maintain a
certain sense of direction, letalone them deciding what car
(24:04):
should be sold, under whatcondition and at what point.
So that's where I think thedealers and the OEMs owe it to
each other to get together anddecide you know what are we
doing here?
Where's our future?
You know, you read aboutdealers up in arms and one of
(24:24):
the brands is introducing adivision of theirs in the US
with direct sale and dealers areup in of theirs in the us with
direct sale and dealers are upan arm going.
You know, I don't get it.
I really don't get it.
I'm sorry, maybe I'm too oldand too jaded, but I don't get
it right someone to to disruptwhat is effectively a working
model.
That's sensible, may needtweaking, may need adjusting,
(24:49):
but if it's working, if it ain'tbroken, don't fix it.
That's my philosophy, but itmakes sense well, and the
cascade of that.
MC (24:56):
To me, the implication of it is, even when I buy things
online, when I have a problem, Istill want to talk to a real
person, absolutely, you know,and and so there, there's always
an element of the humanrelationship that I just don't
see us getting over, even inthis quote.
Shahin (25:15):
Unquote direct to consumer you know people compare
us to.
Well, if Amazon can be a directsale process, why can't we just
gravitate to that?
I get it and I think there isabsolutely no question in my
mind that a good portion of ourindustry is headed for some type
(25:37):
of an online.
In fact, it already is.
Genesis was a really goodexample.
When we launched Genesis inCanada, the idea was no
showrooms, boutiques and I wasone of the first boutiques in
Canada and everything beingonline.
Like you go on Genesisca, yougot your car, you decide there's
(26:00):
no price negotiation and you gopick it up.
So that went on for about, I'mgoing to say, two years, from 17
to 19.
And I always believed in my owngut that at some point we would
gravitate more to brick andmortar.
Sure enough, we did so.
(26:20):
Now, if you're a Genesisretailer, you have to have
exactly the same stuff thatevery other OEM had, and it's
fine, we're all doing it, we'reall working with them.
But the notion that you couldhave used cars is a different
scenario.
Used cars, you know Carvana hasdone in the market.
Some of the other, thatinteraction between a hopefully
(26:52):
a professional salesperson,sales associate at a retail
facility and the consumer sothat they know what the hell
they're getting themselves intoRight, I agree.
And all the research and all theyou know, reading up on
everything there is, does notequal to having a professional
dialogue or conversation withsomeone who does this for a
living.
MC (27:10):
Right.
Well, the amount ofenlightenment that can be
received through the exchange ofenergy in person can't be
replicated online.
Shahin (27:20):
It can't.
It can't and I'm a big believer.
My preaching to our theme istreat your customers to come
into as though they're a guestin your place.
They're there to learn, they'rethere to understand why they
(27:41):
should do business with you.
And if you just follow thatsimple process, I think and not
that I'm saying we always do it-it's what you aspire to, and
not that I'm saying we always doit because we fail.
It's what you aspire to,no-transcript.
(28:14):
I mean remember 2000, 2001, 2002, you know, everybody said it's
a franchise model, the dealermodel is extinct.
Right, that's everybody.
I remember going to an NADAconvention I think it was 2000,.
And literally the entireexposition was about
(28:35):
suchinsightscom, Right, right,and there was, and you know, I
looked at it and say, yeah, okay, if that's what it is, that's
what it is.
But fast forward, they all wentup, fell by the wayside.
None of them actually survived.
MC (28:49):
Right.
So and here we are all theseyears later.
Isn't that funny about humannature?
It's we tend to lean towardsthe absolutes, and then the
absolutes that we thought wereabsolute end up not being
absolute at all.
Exactly Well, this has been oneof my favorite conversations,
particularly through the lens ofmy own bias, which is an
(29:11):
aspiring real estateentrepreneur and perhaps car
dealer at some point.
I can't tell you how many timesduring this conversation I said
I need to get on a wait list tobe one of the people who live
in one of those buildings,because I just want to come and
live in a dealership environmentand observe you.
I want tax advice, I wantentrepreneurship advice, I want
(29:33):
everything from you, and so Iwould love the opportunity to
have you back on the show.
I would be delighted.
Well, I appreciate your time.
Thank you again, mr Aliza Day,for joining me on the Dealer
Playbook Podcast, nice to meetyou Likewise.
Hey, thanks for listening to thedealer playbook podcast.
If you enjoyed tuning in,please subscribe, share and hit
(29:53):
that like button.
You can also join us and theDPB community on social media.
Check back next week for a newdealer playbook episode.
Thanks so much for joining.
This episode is brought to you by FlexDealer Auto industry.
Welcome to this special episodeof the Dealer Playbook Podcast.
I'm sitting down with MrShaheen Alizadeh.
(00:22):
I can't wait to get into thesubject matter today.
It's something we have, Ipromise you, never spoken about
on this show before.
Mr Alizadeh, thanks so much forjoining me on the podcast.
Pleasure to be here.
Well, it sounds.
From what I can understand, itsounds like you have a car
business family.
Shahin (00:41):
There are, yes, there are, two sets of cousins that
are both in two dealer groups.
There's this performance autogroup and ours is downtown auto
group.
Mine is more, shall we say,downtown centric, toronto
centric, whereas theirs is kindof a broad spectrum of locations
.
MC (01:00):
Okay, and what was your foray into the auto industry?
Shahin (01:04):
Well, it was working at a university, trying to pay
bills and washing cars, drivingparts trucks, doing whatever had
to be done.
And that led to, when I cameout, when I finished school,
looking for a more traditionaljob, and they weren't as
exciting as I had thought theywould be with having finished 16
(01:26):
years of schooling.
So I went back to selling carsand I guess in some ways I must
have done pretty well, becauseit sort of evolved into a more
fast track, if you will, salesmanagement.
And then an opportunity camealong in around 1980 to actually
pick up a small BMW Mazdadealership which at the time was
(01:48):
just about going out ofbusiness, and we kind of
resurrected it from the dead.
And that's how I got intobeverage and so I grew from
there.
MC (01:56):
I heard you say there were a lot of sleepless nights.
Shahin (01:59):
Well, anytime you start a business, I mean I remember
when I first started.
Anytime you start a business, Imean I remember when I first
started.
First of all, it was an erawhere there were opportunities
for people like me who didn'thave piles of money behind them.
It wasn't like there's a familytreasure that you drew from.
And it was tough because youhad to deal with banks, you had
(02:21):
to deal with manufacturers, youhad to deal with staffing, none
of which I had really beentotally exposed to.
So it was a learning curve.
I kind of learned as I went, butthe key was to have kind of set
a goal and say, okay, where doyou want to be in five years or
10 years or 15 years?
And that's kind of what I did,and I was fortunate enough, I
(02:42):
guess, to be able to accomplishthat in a way that you know.
Got into management quickly.
Then, as I said, got into asmall dealership and let me tell
you, when we started thisdealership, there were like six
of us and I was everything froma front desk to a sales manager,
to a salesman, to an owner, toa general manager, all positions
(03:05):
wrapped into half a dozenpeople.
But fortunately, we grew itfrom that small operation to
when I sold it in 1990, we hadover 120 employees and had one
of the more successfuloperations in the city and so
moved, looked at maybe gettingout of the car business, and
(03:28):
that was not to be.
The temptations were my wifeand I lasted all of two weeks in
a sunny spot before I said Igot to get the hell out of here.
You're not wired that way, no.
So I came back and startedfocusing on the downtown
business.
And because I lived I'd alwayslived downtown and I love
(03:50):
downtown Toronto I think it'sone of the most exciting cases
in North America and,notwithstanding whatever
political stripe you attach toit or what have you, it's a
great place.
And so I enjoy being downtown.
And so we started assemblingsome dealerships and started
with taking over a Mazdadealership downtown.
(04:11):
Then I was appointed to theSaturn Sabu Suzu dealership
which, as you know, is extinctcurrently.
It was extinct back in 2000 andsomething.
And then our big break came whenI was awarded the Toyota
franchise in downtown Torontoand a small operation, but the
(04:31):
brand was at its I wouldn't saycertainly infancy, but it was at
a time this was early ninetiesand there certainly wasn't the
kind of momentum that the brandhas today.
And so we it wasn't an easyprocess we kind of did what we
had to do and fortunate enoughto take over the competing
(04:52):
Toyota dealership down thestreet from us and consolidated
Toyota's business in the city.
And then came the reality ofhow do you deal with the?
The?
Well before we get to that,others, other brands realized
that perhaps I had kind ofgotten a feel for what's what
(05:12):
it's like to be downtown.
So I got approached by a numberof brands hyundai, nissan,
infinity, and and so we startedthese kind of makeshift
facilities all over the place,and not really because of
anything other than the factthat it was not possible to do a
traditional, you know, two-acresite in downtown Toronto that
(05:41):
could constitute a realisticrelationship between real estate
values in this market, wherelands even in by early this
would have been 2010, 11, landswere still 15, $20 million in
AFIR, and so to justify atraditional lot just didn't make
(06:04):
any sense.
So we had a fortunate enough tobe able to acquire a not just a
dealership, the Toyotadealerships site which we owned,
but next door, and we assembledroughly a five acre site, and
then it sort of became aquestion of how do you deal with
that, based on values again.
(06:24):
So we partnered up with adevelopment company and which
were traditional condo builders,you know, commercial builders
and so we turned a site, justfive acre site, into a
combination of nearly 900 condosand yeah, it's astonishing when
(06:45):
I think about it and seven,eight dealerships in that
location.
We started out with Ford, oh,and Ford was looking, ford and
Lincoln were looking toestablish themselves downtown.
So when they heard about oursort of project, they said, wow,
we're in.
So they joined our forces.
We joined forces, I should say.
(07:06):
And so they became another.
So we had Toyota, we had Ford,we had Lincoln, we had Lexus.
At another location, on Dundas,we had Hyundai Genesis, and so
we assembled these brands intoone call it big, happy family.
It was something that probablywould not have been even
envisioned 20 years ago, becausethere's so much of politics,
(07:31):
going into images, imaging andwho gets what and what's the
footprint, and so on and soforth.
But I think the OEM partnersthat I was involved with
realized that this is not amarket where you can have a
traditional business model, soyou have to think outside the
box, and they did.
Fortunately, all of them workedwith me.
(07:53):
It was not an easy process, butit took me probably from 2012,
13 till 15, about a good twoyears to get everybody on site.
Then came the city.
Then having to deal with thecity, it was next.
We got that all settled with alot of help from the development
(08:15):
partners.
They were experts in thatsubject.
So by 2016, we were startingconstruction and our first
building was our Toyota building, and then we went to the South
side and started to expand itfrom West to East, and then came
COVID in 2020.
(08:36):
Right, and so it slowed us downquite a bit.
And but by the end of 21, whatare we in 25 now?
In the 21, mid 22,?
All the brands were in the autoplexus, we call it, and it has
worked well.
I mean it's not.
Some of my colleagues come andvisit and see it and they say,
(08:59):
oh gee, I don't know how you dothis, but it actually is not
that complicated.
It's about using common senseand it's about using the most
effective utilization of landvalues, you know.
And space, I should say so wehave roughly 60 service bays
below grade that services all ofour brands.
(09:20):
We have nearly 500 spaces forparking on its four levels below
, three levels above.
And you know there are dayswhen it's really busy during the
spring busy service season.
You know you have somepressures that are a little too
much, but generally I thinkwe've managed to kind of learn
(09:44):
our way around working withthese environments.
MC (09:48):
It's not for everyone I can tell you I have.
Well, we know, based on thenumber of people I know who have
done this, which is one.
Shahin (09:54):
Now, well, I've had visits from some us retailers
who have looked at it and that'swhy I said there was a san
francisco dealer toyotadealership that the owner and
general manager came up andspent some time with me and the
next thing you know they were inautomotive news, retail and
residential in downtown SanFrancisco.
So I think we've started thetrajectory that is going to be,
(10:18):
over the course of the next fewyears, more and more taken into
consideration.
MC (10:27):
Hey, does your marketing agency suck?
Few years, more and more takeninto consideration your better
quality leads from local SEO andhyper-targeted ads that convert
.
So if you want to sell morecars and finally have a partner
that's in it with you, thatdoesn't suck visit flexdealercom
(10:53):
.
Let's hop back into thisepisode.
I've been doing this show for11 years.
I think this is the first timeI'm speechless.
Shahin (11:01):
Should I be proud of that, or should I?
MC (11:03):
be pissed.
Yeah Well, because my secondinclination is I don't have much
money, but how do I getinvolved?
I'm like let's go and buildresidential at dealerships all
across North America.
There's something there.
Shahin (11:19):
Well, I know some colleagues without necessarily
divulging their names that arelooking at sites that are not
necessarily in downtown area,but they also have come to the
conclusion that the land valuejust doesn't justify being a car
dealership To have a three-acresite and for vehicles to be
parked all over the place.
(11:40):
It really makes no financialsense.
I don't care where you are,unless you are in some remote
city or town in northern Ontarioor in Saskatchewan where you
don't have density, populationdensity, where you don't have
the pressures of real estatebecause of space.
Other than that, I think we'reheaded in a direction that is
(12:05):
very much aligned with what I'vedone and I've been a genius to
think about it.
It's just the pressure ofhaving to decide how do you take
a five acre site, which on itsown has considerable value, and
deploy it for an automobiledealership?
MC (12:21):
We just can't Right, right.
Well, and you?
I mean you created anotherprofit center.
We've got variable, we've gotfixed and now we have passive
real estate.
Shahin (12:30):
Exactly so.
That was the kind of incentivebecause our partners were in
that business and we made a dealwith them.
We said, look, whatever happenswith our condos, wonderful, but
we want our auto place, as wecall it, with certain amenities
at a certain price.
And that was their incentive topartner with us.
MC (12:50):
Do you know how many of the 900 residents?
Shahin (12:52):
sold out bought cars from you.
It's an interesting question.
Quite a few, quite a few.
We do offer incentives.
We do offer kind of neighborlydeals.
It's a, you know, it's a kindof a double-edged sword.
There are also some residentswho may have not realized that
(13:15):
being next to 300 employees in aseven-dealership facility has
its drawbacks too.
You know, a truck pulls updropping things off and the
neighbors get a little irate andwe have to deal with it.
But for the most part, yeah, wehave quite a few of our
neighbors that purchase carsfrom us.
(13:35):
I mean, you know, I've beendowntown now for 30 plus years
as a dealer.
And the notion of people movinginto a condo in downtown
Toronto and say, well, I reallydon't, I'll take Uber and I'll
do this or that, is a fallacy.
I really don't, I'll take Uberand I'll do this or that, is a
fallacy, because what happens isthey end up having to visit
their parents in the suburbs.
(13:55):
They end up having to gotraveling and car share programs
are a wonderful idea, but theavailability is.
You know, a friend of minewho's in that business said, you
know, from a Thursday to aSunday, forget it, there's
nothing to take.
So we're seeing peoplegravitating back to in fact, I
was reading an article inAutomotive News yesterday or the
(14:17):
day before, where younggeneration is not as adverse to
purchase of a car, mainly fortransportation.
They're not as much into thestatus of any particular brand,
but they really need to havethat freedom and to be able to
just feel that they can jump intheir car and go somewhere Sure,
and that's not something youcan do with CarShare and with
(14:42):
Uber and the rest of it.
MC (14:43):
I'm not one for curveballs, but given your vast experience,
I have to ask you this.
I was just in Holland speakingat some events there.
In that market there must havebeen 30 of the Chinese auto
brands.
Shahin (14:58):
Right.
MC (15:00):
Are you watching that market ?
What are your thoughts on howthat might impact Canada and
North American markets?
Shahin (15:09):
Well, the political landscape has pretty well
defined their growth.
You get BYD is now a largerelectric producer electric
producer than Tesla will ever bethere by a long shot and so
what you've got now is a sort ofalmost a hold off, a holding
(15:29):
pattern for the Chinese.
Everyone in North America isfearful.
Okay, what happens?
The problem with the Chinesebrands is, let's be honest, the
Chinese are great visionaries,great executors, but they don't
play it fair.
They don't always play it fairwhen it comes to pricing, when
(15:51):
it comes to what it takes to.
I saw an article that if youwere to produce, even in China,
some of the vehicles that arebeing sold at ridiculously low
prices, you'd go out of business.
But there you have governmentsupport, you have these big
conglomerates.
MC (16:10):
There's an agenda.
There's an agenda for sure.
Shahin (16:11):
So am I worried?
Well, I think I'm getting to apoint in my career that in my
lifetime I don't think they'llbecome a huge threat.
And mainly because, even ifthey assumed, even if one were
to assume that they would havesome traction, they would have
to set up a dealer network.
(16:32):
They'd have to set up service.
Sure Right, it's a long-.
MC (16:35):
There's logistics.
Involved politics.
There's logistics involved.
Shahin (16:38):
So, listen, I drove a Chinese.
Someone brought me one a coupleof years ago last year actually
, I drove one of the Chinesebrands and I was very impressed
with it.
I mean from a vehicle, face andfinish and all that.
It's not something that youknow.
It's not the same Chinese as 50years ago when we looked at a
Chinese mechanic.
But I think there's too much,in my opinion, there's too much
(17:03):
baggage with the whole processof trying to launch the Chinese
product.
And in fact, in Europe they'vebeen quite successful sure?
MC (17:11):
yep, yeah, I was.
I mean, I was blown away by it,so that that that makes all the
sense in the world.
The second thing I want to pickyour brain on is you've seen
many ebbs and flows now in ourindustry yes in addition to
maybe at times creating your ownin figuring out the real estate
.
What's your take on this wholetariff thing?
(17:33):
Do you think there's a biggeragenda at play?
Shahin (17:37):
I you know, if you were dealing with logic and rational
thinking, you would not evenconsider it.
Quite frankly, regardless ofthe disproportionality of trade
balances, you know, thepresident of the United States
claims that they're subsidizingus by $200 billion.
(17:57):
That's just a trade surplus.
I mean, it's as simple as that,and I don't think the man is
not smart enough to know the bigdifference.
So I think there's politicsinvolved, there is posturing
involved, but there is, I don'tknow.
I mean, are we talking 51ststate?
I don't think so.
Are we talking, you know,sending troops to Ottawa?
(18:19):
No, I don't think so.
I don't think so.
So you know again, I've been atthis game long enough.
I remember the days when thegovernment of Canada prohibited
us from bringing so many importsfrom various countries and we
were limited.
If you were a Japanese cardealer which I was you couldn't
(18:41):
get what you wanted because theyhad quotas.
So I've seen ridiculousdecisions like that as well take
shape.
But at the end of the day, ourbiggest problem with our
(19:07):
industry is that politicalshifts don't always align with
where the OEMs are headed for Iwas at the conference with CADA
and speaking to a couple of OEMpresidents, both of whom say you
know what, when you think aboutall the anecdotal parts of this
tariff business, the reality isthe OEMs have to have a window
that they can decide what isnext, what comes next and
(19:27):
unfortunately politics has takenover.
I mean, the Zev mandate that wasenacted is you know both sides
of the border, we seem to prettywell.
You can kiss that one goodbyeas far as I'm concerned.
So I think the tariffs are atalking point.
It's negotiations, it'sposturing, I don't know, I'm not
(19:50):
an expert.
It's negotiations.
MC (19:51):
It's posturing?
I don't know.
I'm not an expert, well,although given a very clear and
wisdom-filled answer on that, soI don't know who might have to
rethink the expert thing.
For sure you know a lot.
There's obviously any of theconferences or trade shows or
(20:15):
events that we attend in thisindustry tend to talk about the
friction, or potential friction,that exists between the dealer
body and the oem.
You know, from your vantagepoint now, working with many
different oems, what do youthink the solution is to this?
How do we come together and say, well, we are the distribution
network and you are the, youknow, the creation network.
(20:36):
Let's find a path that's, youknow, for the benefit of the
customer and get past this kindof one sidedness that we tend to
always fight against?
Shahin (20:46):
I wish I had a.
That's a discussion.
That's, as I said to Rose,we're not going to cover in 30
minutes.
MC (20:54):
That's a discussion that needs 30 days.
Shahin (20:57):
I'm always.
I have served on dealeradvisory boards, I've served on
dealer councils, I've served atthe regional marketing and you
know, 44 years of being a dealeryou tend to.
You've done it all, I've doneit all, but one thing that I
think has become over the lastfew years much more clear is
that neither side can afford tokind of work in isolation Not
(21:22):
the dealers and nor the OEMs.
There has to be a partnership,especially given the wacky
governmental side of things.
So for us to get together andhave a three-ring circus between
us, the OEMs and the government, we would lose.
So I think the solution, in myopinion and I've shared that
(21:44):
with my OEM partners is apartnership.
It's to define what is the bestapproach to combat not just
tariffs but market conditionsand ZEV mandates and you name it
.
So traditional conflicts thatwe've had between dealers and
(22:04):
OEMs are, in my opinion, andOEMs are, in my opinion, pale
compared to the bigger picture,which is what is the future of
retailing?
What do we want?
Is it direct sale has workedfor some, hasn't worked for a
lot.
Is it a?
You know, I have a Genesisoperation distributorship, as we
(22:25):
call it.
It's very different than thetraditional relationship.
We don't inventory cars andit's worked out well, but it's
still a partnership.
It's not like there is a heavyhand or hanging over your head
to tell you what to do.
It's just we have upfrontpricing, we have consistency in
(22:47):
how the 30, whatever number ofdealers there are, how we all
behave, and I think that's thekind of format that can lead to
a more sustainable long-termplan, because we know it's going
to change.
One of the things that Ienvisioned within our Aut plex
(23:08):
was the flexibility to be ableto change If things happen, if
adversarial things happenbetween two brands and things
don't go well or at leastsomething happens and somebody
shuts down and decides to moveon.
You have to be flexible and theonly way you can maintain that
flexibility, in my opinion, isby working together and be true
(23:31):
partners.
The governments, in my opinion,will never be anybody's partner
.
MC (23:34):
No, I agree, that's my personal opinion.
They can't even figure out howto be each other's partner
Exactly.
Shahin (23:39):
Two parties, three parties I don't care how many
parties you have From apolitical perspective, and both
here, US, Europe.
Political processes aredysfunctional, yeah, and they
can't decide for themselves, asyou stated, how to maintain a
certain sense of direction, letalone them deciding what car
(24:04):
should be sold, under whatcondition and at what point.
So that's where I think thedealers and the OEMs owe it to
each other to get together anddecide you know what are we
doing here?
Where's our future?
You know, you read aboutdealers up in arms and one of
(24:24):
the brands is introducing adivision of theirs in the US
with direct sale and dealers areup in of theirs in the us with
direct sale and dealers are upan arm going.
You know, I don't get it.
I really don't get it.
I'm sorry, maybe I'm too oldand too jaded, but I don't get
it right someone to to disruptwhat is effectively a working
model.
That's sensible, may needtweaking, may need adjusting,
(24:49):
but if it's working, if it ain'tbroken, don't fix it.
That's my philosophy, but itmakes sense well, and the
cascade of that.
MC (24:56):
To me, the implication of it is, even when I buy things
online, when I have a problem, Istill want to talk to a real
person, absolutely, you know,and and so there, there's always
an element of the humanrelationship that I just don't
see us getting over, even inthis quote.
Shahin (25:15):
Unquote direct to consumer you know people compare
us to.
Well, if Amazon can be a directsale process, why can't we just
gravitate to that?
I get it and I think there isabsolutely no question in my
mind that a good portion of ourindustry is headed for some type
(25:37):
of an online.
In fact, it already is.
Genesis was a really goodexample.
When we launched Genesis inCanada, the idea was no
showrooms, boutiques and I wasone of the first boutiques in
Canada and everything beingonline.
Like you go on Genesisca, yougot your car, you decide there's
(26:00):
no price negotiation and you gopick it up.
So that went on for about, I'mgoing to say, two years, from 17
to 19.
And I always believed in my owngut that at some point we would
gravitate more to brick andmortar.
Sure enough, we did so.
(26:20):
Now, if you're a Genesisretailer, you have to have
exactly the same stuff thatevery other OEM had, and it's
fine, we're all doing it, we'reall working with them.
But the notion that you couldhave used cars is a different
scenario.
Used cars, you know Carvana hasdone in the market.
Some of the other, thatinteraction between a hopefully
(26:52):
a professional salesperson,sales associate at a retail
facility and the consumer sothat they know what the hell
they're getting themselves intoRight, I agree.
And all the research and all theyou know, reading up on
everything there is, does notequal to having a professional
dialogue or conversation withsomeone who does this for a
living.
MC (27:10):
Right.
Well, the amount ofenlightenment that can be
received through the exchange ofenergy in person can't be
replicated online.
Shahin (27:20):
It can't.
It can't and I'm a big believer.
My preaching to our theme istreat your customers to come
into as though they're a guestin your place.
They're there to learn, they'rethere to understand why they
(27:41):
should do business with you.
And if you just follow thatsimple process, I think and not
that I'm saying we always do it-it's what you aspire to, and
not that I'm saying we always doit because we fail.
It's what you aspire to,no-transcript.
(28:14):
I mean remember 2000, 2001, 2002, you know, everybody said it's
a franchise model, the dealermodel is extinct.
Right, that's everybody.
I remember going to an NADAconvention I think it was 2000,.
And literally the entireexposition was about
(28:35):
suchinsightscom, Right, right,and there was, and you know, I
looked at it and say, yeah, okay, if that's what it is, that's
what it is.
But fast forward, they all wentup, fell by the wayside.
None of them actually survived.
MC (28:49):
Right.
So and here we are all theseyears later.
Isn't that funny about humannature?
It's we tend to lean towardsthe absolutes, and then the
absolutes that we thought wereabsolute end up not being
absolute at all.
Exactly Well, this has been oneof my favorite conversations,
particularly through the lens ofmy own bias, which is an
(29:11):
aspiring real estateentrepreneur and perhaps car
dealer at some point.
I can't tell you how many timesduring this conversation I said
I need to get on a wait list tobe one of the people who live
in one of those buildings,because I just want to come and
live in a dealership environmentand observe you.
I want tax advice, I wantentrepreneurship advice, I want
(29:33):
everything from you, and so Iwould love the opportunity to
have you back on the show.
I would be delighted.
Well, I appreciate your time.
Thank you again, mr Aliza Day,for joining me on the Dealer
Playbook Podcast, nice to meetyou Likewise.
Hey, thanks for listening to thedealer playbook podcast.
If you enjoyed tuning in,please subscribe, share and hit
(29:53):
that like button.
You can also join us and theDPB community on social media.
Check back next week for a newdealer playbook episode.
Thanks so much for joining.
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