David Noël-Romas: Welcome to the Manitoba Business Podcast, featuring interviews with business leaders and entrepreneurs based in our wonderful province. I’m David Noël-Romas.
The interview you’re about to hear features another one of Winnipeg’s great success stories. Several years ago, an immigrant came to North America for school. He eventually chose to live in Winnipeg, bought an ailing car dealership, and turned it around. Now he owns seven of the most successful dealerships in the city.
Now, before we get to the interview, I want to switch gears for just a second. The Manitoba Business Podcast is completely free to listeners, and always will be. I support it with money from my own business, and never ask for anything in return. However, this year, in the spirit of these holidays, I do have one request.
Ever since starting this show, I’ve been struck by the generosity of the guests. Certainly for agreeing to come on the show, but also for the volunteerism and philanthropy they demonstrate. It inspired me to examine how I could do something similar in my own life, and for the past year I have been contributing as a volunteer board member at the Manitoba Conservatory of Music & Arts.
The Conservatory has an outreach program that does a lot of good in our community by giving inner city kids access to instruments and music lessons that they otherwise wouldn’t have. And it makes a huge difference: it’s a positive way for them to spend their time after school.
I want you to consider donating to the Music Equals program this year. We’re doing a special promotion for companies and organizations right now, where you can hire an ensemble to perform at your holiday party and proceeds go to support the kids. It’s a great opportunity to practice corporate social responsibility while adding a special touch to your party–and these are some of the best musicians in the city.
Of course, you can also make a personal donation, and all contributors will receive a tax receipt.
The website to visit if you want to support inner city kids this Christmas is www.mcmapromo.com
Alright, now let’s get started. Without further ado, here is Ashok Dilawri:
[to Ashook] Ashok, thank you so much for taking the time. I’m really looking forward to the conversation.
Ashok Dilawri: My pleasure.
David: So can we get started by having you tell us a little bit about who you are and what you do?
Ashok: You know, my name is Ashok Dilawri. I’m the CEO of the Dilawri Group of companies in Winnipeg. We are the car dealerships under the banner of Crown, so most of the stores, they are under Crown Ankara, or Crown Honda, and so on. We own six dealerships in the city plus lots of ancillary business like the ball shop and glass, detailing center, the credit solution, the credit on for our business as well as the performance part of our business. So these are some of the business we have under our belt, and we employ about 430 people in the city. And the business has been growing every year. We’ve been in Winnipeg since 1984, so all 32 years of the business.
David: 1984, wow. Thirty two, yeah.
Ashok: And I started the business from the scratch. Now I got my family involved in the business, my daughter, son, and my wife is also included as part of our business.
David: Excellent. So, okay, so there’s a lot that I want to dig into there. But first, let’s start, and I’ve always been a little bit curious, how would you describe the business model and the revenue model of a dealership?
Ashok: Well, the business model is very simple. The business model… The number one focus we always towards the customer service. That’s the number one model we have. And second thing, we always believe in having a good product. So we deal with some of the world class manufacturers like Toyota, Honda.
David: Now with the manufacturers, how does the arrangement with the manufacturers work? I mean, you’re obviously selling their product, but it doesn’t seem like it’s an exclusive arrangement. You’ve got dealerships with several different manufacturers. So what… Isn’t it kind of a distributor model where they ship the cars and then you pay them for it later? Or are you buying stuff from them and selling it back? I’ve always wondered sort of how the money gets moved around in a dealership.
Ashok: Well, you know, we are a franchise model so we don’t have the exclusivity of any product line, although we are this…
David: But when you open a dealership, you’ll pay, say, Honda, for the rights to have a Honda dealership?
Ashok: We don’t pay for the rights. I think what I look for is the person that can operate the business and has got the financial means to support the business and has financial means to buy their product. Most of the ultimate factors, they don’t release the product till the legal is fully paid for.
David: So are you paying it at some sort of a wholesale price and then selling it out? Or are you making the deals with the customers first and then like… What does the timing of the deal look like in terms of between, say, Honda and, you know, if I wanted to buy a car from you today?
Ashok: Well, we have the annual plan be, go one year in advance.
David: I see.
Ashok: How many cars we happen to buy.
David: I see.
Ashok: And so, again, depends upon the seasonality. So we buy the cars whether we sell them or not, you know. But we normally don’t order the cars which don’t sell. But it starts off, bought it at prices, and then factories very much involved in our business in terms of the promotions, in terms of the incentives and all that. So basically…
David: And how much flexibility do you have on pricing? Is that being… Are the factories deciding the prices or are you deciding the prices based on what they’re charging you?
Ashok: No, we decide the prices. We cannot be into price collision and be competition.
David: Okay, that makes sense. So they’re not able to tell you what to charge basically?
Ashok: Well, we have, what do you call, the suggested price. But we can settle for price retrieval.
David: Okay, so it’s the same as any other retail basically.
Ashok: That’s right.
David: If you were selling shoes in a store, same kind of arrangement.
Ashok: Yeah, yeah.
David: Okay, now going back a little bit, in terms of your background, where are you from originally?
Ashok: I was born in India, and I had done university in the U.S. in the Business and Hotel Administration. And after graduating, I’ve worked into the hotel hospitality industry for five, six years before I decided to change my careers and go into the car business. So basically started from the scratch and learned the business very quickly and was able to own my own dealerships within five years.
David: Wow, incredible. So when you were in the hotel and hospitality industry, what kind of roles were you in there?
Ashok: I was in the management. I was always in food and beverage. I was a bang cook manager, then I was a kitchen manager, then I was a food and beverage manager, and second in command after the general managers.
David: Sure, okay. And then you decided… Did you decide to… Do you specifically target selling cars or being in the automotive dealership industry? Or was it just that you didn’t want to be in the hotel industry anymore?
Ashok: No, actually. I have a background for the service like the hotel business. Hospitality is now like a service, you know? And one thing we learned right on the hotel business: excellence of business, the way we treat all of our clients, so that kind of background. And I have a good sales background. I like to be meeting with people, really selling, whether I was arranging somebody’s banquet or organizing a meeting or unveiling for somebody. It was always sales oriented. And meeting people was very important. And I enjoyed it. And I had an opportunity through my family, through my uncle. He asked me, “How about you try… You’re so good in EPO, why don’t you try the car business? It’ a lot more regarding and the hours are not as crazy as the hotel business.” So I guess it was really the hours that I wanted to not work in the evenings of every weekend and have no life.
David: Fair enough.
Ashok: And I decided, that’s not a bad… I can do well in any… I’m pretty confident. I can do good in anything I do, you know?
David: And was that also when you came… Because you said you were working in the United States doing the hospitality stuff, is that… Did you change careers at the same time as you came to Winnipeg? Or was that…
Ashok: No, no. Actually, I did my hospitality industry in Las Vegas, so I’m a graduate of UNLV. So I’ve worked in the big hotel in Las Vegas as you know. So I worked there for three years. And after my work permit expired, I got immigrated to Canada. So I moved. So I couldn’t get… I’d only had the showed student and work permit.
David: I see, and so then when you came here, did you work in hospitality here for a bit as well? Or did you make it…
Ashok: Well, I moved to Ottawa. So I worked in the hospitality industry there. And from there I moved to Edmonton. So I was involved for four, five years there. And then I decided I want to make a career change.
David: So you had some family that recommended getting into car sales. And you were at Edmonton at that point?
David: And so did you just get a job as a sales-person or what was the next step?
Ashok: No, actually, I started really washing cars.
Ashok: Yeah, that what I started in. So after having a management job in the hotel that you don’t pick up the dirty plate even, I was washing cars.
David: Wow, and why? I mean, you probably could have arranged something different for yourself, no?
Ashok: If you have to, learn the business from the bottom.
David: Okay, interesting.
Ashok: So I wasn’t there for that long. I was there for four months, but that gave you good inside, you know, how the things really work. I mean, from my perspective, if I have a client whose car is not washed, if they don’t see me, it won’t matter to them. But if the car is not clean, that lot person matters more to that person, to my clients, then I matter to them, you know? So from that philosophy it was always looking from the bottoms up, you know?
David: No kidding, okay. So you were washing cars for four months, and then did you become a sales person? What was the next step?
Ashok: No. Then I worked in the parts and service area of the business. I worked on that thing, and then…
David: By the way, was this… Were you working in a family member’s business at this point?
Ashok: Yeah, yeah. With my uncle used to own the dealership. So I worked for him.
David: So it was, you were able to get some flexibility there. He kind of guided you through? Was it his idea that you start doing the washing and then the…
Ashok: Yeah, he said, “Well you want to learn the business? That’s how you learn the business.”
David: Right, okay. And were you angling at that point already that the plan was going to be that you were going to buy the business from him? Was that the idea?
Ashok: That was always… You know, the entrepreneurship was always forefront, is to learn the business, get good in it, then buy the business and start it all.
David: Right, okay. So you went from washing cars to working in parts and service, and then what?
Ashok: Then selling cars, then got into the management role in the use operations. Then I ran a rent-a-car. My uncle used to own an Avis rent-a-car, so general manager for the Avis franchise. That I did for two or three years. And then I was a sales manager. I was a general manager, then after general manager, I opened up my own store in Winnipeg, I moved to Winnipeg.
David: Interesting. And what prompted the move to Winnipeg?
Ashok: Well, you know, that time, when you’re young, you don’t have the money. And car business requires lots of capital. And very few people have the capital to start a car dealership because the sheer number of cars and the credit lines. It’s just… Unless somebody has a good inheritance or family supporting them, it’s not possible, you know? But I was working for him in fact at American Motorcycle Corporation at that time, and I used to run one of their stores. And we seemed to have a good… They liked what I was doing, and there was an opportunity available in Winnipeg. So they asked me if I was interested in that thing.
David: Well, good.
Ashok: I said I don’t have the money, but they said they will put up the money. And I can buy them out of the profits.
David: Interesting, interesting. So they structured that as a loan where you essentially paid them back from the proceeds of the businesses over time?
Ashok: Like they had most of the common shares and preferred shares. I had some common shares. So I can buy common shares out of the profits. So I was able to buy them out within 12 months.
David: Wow, and what dealership was that? Is it still around today?
Ashok: No, it’s not around. It was Panam Motors at that time. So that was a good success story for me.
David: So that was… You said that was in ’84?
David: Wow, okay. And how long did it take you to buy them out?
Ashok: One year.
David: One year?
David: Wow. That must have been pretty successful operation there.
Ashok: It was very successful. It was a money-losing operation when I took over, but it was highly profitable.
Ashok: And the structure, the deal pretty good. So there were lots of tax advantages and other things, so things worked out great for me.
David: Wow. That’s incredible. It’s funny you mentioned that, I was talking to Doug Harvey over at Maxim Truck and Trailer a while back. And he had a similar story where he bought a business that was losing money and he was able to turn it around really quickly. And that surprised me. And it surprises me that you did the same thing. How did you do it? What would you say were sort of the… What did you realize was wrong when you got in there and how were you able to turn it around so quickly in a year?
Ashok: Our business is all people’s business. Two things you always do that… It’s a performance oriented business, so you got to be… First of all, it’s a performance-oriented business, very highly competitive business, very customer-oriented business, and almost very much like a relationship business. When the people don’t have the confidence in you, they don’t want to fork out tens of thousands of dollars to buy your product. And, again, it was training people, you know, working with them, making them better day by day.
David: Was there a lot of personnel turnover in that first year?
Ashok: You know, when we hire the business, when business loses money, nobody wants to work there. So you really got to hire the people.
David: I see. So you had the opportunity to basically bring in some new people when you came in came in…
Ashok: Yeah, it’s a… So we are to bring the… And I said leadership, you know, like whether the leadership requires a performance. And other partnership is based on performance also. And, really, the commitment and focus is the success. It has to be for success and, which nobody can teach you, burning desire to learn. You need these elements to do with successfully. There is no magic to it, you know?
David: Now how do you drive the rest of your team to that and how do you… This is maybe jumping ahead a little bit, but now you have, you know, you said 430 employees, and I know that automotive sales is very much like… Well, it’s you got to sell, right?
David: Like the sales people need to do well. So how do you motivate people? How do you provide the right incentive structures? Like what does that look like?
Ashok: You have to be sincere what you do. Work ethics is very important. I mean, nothing work like works. I mean that has to be there.
David: But is that something… I mean, if someone isn’t showing the right work ethic, how do you correct that? How do you select for work ethic when you’re hiring, all of these things? Because there are lots of businesses out there that don’t have a work force full of very driven people.
Ashok: Well, I think people make it very complicated. It’s not that complicated as it is. I think if it makes sense, people buy it. So it’s really that simple. If I’m not able to make sense to you, it’s very hard for me to sell to you anything. And if the rewards are all together with your performance, people see that. Rewards, I don’t always mean monetary rewards. Somebody is doing a good job, acknowledging it. It’s all the little things people like to hear. So those are the things you’re going to provide the feedback. And I’m not afraid to provide a feedback if it’s good or bad. I’m not… Most other people that say, “Yeah, things will turn out on their own,” they never turn out good on their own.
And you really have to mentor people. I always appear to tell my management, “Mentor people how they can go to the next level. If they go to the next level, you’re going to go to the next level. If they want to protect your territory, you’re never going to take anybody else’s territory.” So it’s basically, you got to let people win, let them do this stuff. But, again, correct them, knowledge, the good things. And we look at it, if something doesn’t have a number, it’s not worth doing it. Everything has a number, so you got to put everything in a number. So it has to be like that way.
David: Interesting. And that’s a whole other conversation, I think, is how you put numbers to everything because some things are more difficult to quantify than others. But I don’t want to take too much of your time. There’s two more questions I have. Well, actually, three more questions. What would you say… You’ve obviously seen a lot of growth between when you started until now. What were some of the biggest challenges that you had to overcome during those 32 years?
Ashok: I think the biggest challenge is the people buying into your vision because that was always a challenge. Human is the biggest challenge we all have. So I think that was it, and making people think, you can’t stop trying to succeed because you feel like something, it doesn’t mean you give up. Like your last breath is not as important as your next breath. So what has happened, there’s nothing you can do about it. And not everything goes right all the way. But keep on contemplating, moaning about it, it doesn’t lead you anywhere. We used the car language thing, you can’t drive looking in the rear view mirror. So you always got to look in the front.
And even what makes you happy. Like if you’re not passionate about something, if you don’t have a burning desire to do that thing, that’s what you need to be. Those are the qualities I look for people. Sometimes I can have a talented people, educated people, but they could be terrible in a sense, you know, what needs to be done, they can’t get the things done. Education is so important.
David: When you think about yourself and sort of your own burning desire, how would you describe it? Is it to sell more cars or is it something sort of different than that?
Ashok: You know, whatever I do, I give it 100%. I don’t look at the rewards, money, or anything there. It’s those things are by-products of that.
David: It’s a burning desire to do a good job, right.
Ashok: Yes, if you do this thing, anything I do, I like to do it well. And you know, if I don’t enjoy what I do, I don’t want to do it. So I enjoy business. I enjoy meeting people. The business poses different opportunities, different challenges, no two days are the same. I don’t think I’ve worked a day in my life. So I’m talking to you or I’m talking to a customer. There’s a fun. Then if it’s a matter of transactions, you can make it as a fun also. If you also get a good service, naturally people are willing to pay more money for services, relationships and product. It’s not one or the other. It’s a combination of everything.
If you attach a value to it, it’s easy enough. If it makes sense, people buy it. That’s how I will always say that. But nothing remains the same. You got to be constantly evolving yourself. Things don’t remain the same. Our business has changed, so we got to be looking at the changes, what the business will look like 5 years from now, 10 years from now. Those are the things you have to do. Like we have the buyers are changing, digital technology as you know, everything is digitized more than anything else. You see that. So all these things are changing, our way of doing the business is changing. People have less, less, less time.
So if you honor that thing, if you honor their pain points, it’s easier to do business.
David: Okay, one final question. You mentioned earlier the importance you tell your managers that it’s important for them to mentor their people. And I agree with you. Who would… Are there people that you would say have mentored you? Whether they’re locally, or you mentioned your uncle, I presume you would count him as a mentor? Who are the people that have kind of shaped your approach to business the most?
Ashok: I think my uncle was got into business. But then there were some of the managers that worked underneath, I think they mentored me, whether in the hotel business or being in the other business. You’re always looking for more people from a different industry, how they do the business, get, always picking up the ideas. You know there’s so much knowledge out there, you’re always looking for what’s the next thing to do. So it’s a learning process. You never stop learning. I think you just can’t merely be… You merely get good at something when you know the marketplace only rewards excellence. You can’t be just good in something. You’ve got to be excellent in that thing. So unless you are that kind of mindset, I think that’s what people taught me. That’s what they mentored me, in not exactly the words I’m putting in. I’m giving you basically what I got out of them intellectually.
So that always helped. And another vision is or our mission is making car, buying easy. So it’s nothing fancy about it. That’s what we want to do. Whether you buy a car or rent a service with us, we’re making car ownership easy. So that’s all you try to do that. We always like to put ourselves into customer’s point of view, how they are thinking. And I sort of mentioned you only have to praise little things that are noticed but they’re never mentioned.
David: Interesting. Well, Ashok, thank you so much for your time. It’s really been a pleasure.
Ashok: No, you’re most welcome.