E35: The Luxury Car Business with Francesco Policaro

This podcast is brought to you by Ginsler Wealth. The information discussed today is meant to be general in nature and not tailored to your specific investing circumstances. This means that you should talk to your regular Gensler wealth advisor or your own advisor before acting on any information we discuss today. Nothing in this podcast is intended to be a solicitation, and past performance does not guarantee future returns. This episode may make you want to buy a luxury automobile. You have been forewarned. Today on the Unlimited Podcast, we speak with Francesco Policaro, CEO of Policaro Group, a luxury car retailing group. We learn about his family's groundbreaking history in the automotive space, the importance of putting customers at the center of everything, and how to carry on a family business into the second and third generations and beyond. Let's go.

Foreign.

Welcome, everyone, to the latest episode of the Unlimited podcast. As my listeners know, we are often talking about investment and financial themes, but the title of this podcast is Unlimited. And I did that purposely so I can once in a while talk about the things I really love as well. And hopefully some of the listeners love too. So, you know, we've done one on tennis, so I've covered that one off. Uh, we've sort of done one on music with our music royalty manager. That was the first episode. And one of the other things I love is cars. So I thought, who better to talk to than Francesco Policaro, the CEO of the Policaro Group. And so I'm very delighted to have Francesco here with us. Thanks, Francesco, for being here.

Thanks for having me, Brian. Looking forward to it.

No problem. I'll give a little bit of color about your business and you, and then we'll turn it over and I'll pepper you with a few questions, if that's okay. So the idea today we're going to talk about the luxury auto industry with, as I say, Francesco Policaro, CEO of Policaro Group. What I'm hoping to touch on as well is building and sustaining a family business. This is a family business going back many decades, delivering the highest level of client and customer service, something that's very key in our business as well, and also to get Francesco's insight into the economy, because he's really on the front lines. You know, the auto industry clearly is one that touches many, many, many folks in the country. So for the past 40 years, Policaro Group has emerged as a prominent automotive retail group in the GTA in southern Ontario. And today, their expansive group encompasses seven luxury brands. Acura, BMW, Jaguar, Land Rover, Lexus, Porsche, and Volvo, I think I've covered them all. Is that right Francesco? Okay.

Yes.

They're involved in all aspects of the automotive experience from assisting customers in acquiring their first vehicle to supporting professional racing endeavors which we're going to hear about. And they also specialize in sourcing exclusive luxury super sports cars. Before we learn more, let me give you a little bit of an intro to Francesco. As I say, CEO of Policaro Group, grew up in Woodbridge, Ontario, carries on the torch that his father and two uncles led when they started Policaro Group in 1979. Francesco's father worked in Turin, Italy manufacturing parts for Fiat before coming to Canada in 1966. And in 1987, the family expanded into the luxury category by opening Canada's first Acura dealership. That was my first car as well, way way back. And throughout his career, Franchesco's been fascinated by the allure of luxurious cars and believes that the vehicle a person chooses represents their personality and individuality. So that was collected from all my research on on you and Policaro Francesco. Sorry Sorry to you and to listeners for the long intro there, but would love to turn it over to you and hear a little bit about your, your business and the evolution of the company and yourself into this role as coo. Sorry CEO. So I know a big question, but would be good to give our listeners a little background.

Sure. Yes. So the company was founded in 1979. My my father as well as two brothers founded the company. They had both they all three of them I should say had been selling cars for for two different Honda dealerships when an opportunity came to acquire shares in, in a small Honda store in, in Brampton which was the first ownership stake that we had in in a dealership. And, and that was kind of the, the beginning of of the group. And you mentioned the Acura store. The Acura store was was our second dealership and that was in in 1986. And and, and kind of started a what you may call like the second phase of of our our, our company's history. And and the brothers operated I mean the three of them operated through hard work and and a lot of early mornings and late nights, one customer at a time approach to to business. Literally shaking hands and glad handing every every customer and very much involved in the sales process. All three of them were or we say front end within our business operators. And on that, on that variable side of the business very much involved on the new and the pre owned cars, which is an important part of the business obviously, but also Oversaw the sales, the service and parts areas of the business and things remain that way until the second generation got involved by the oldest of the second generation to really get involved in the business and make a career out of it. But I do have several other family members that have done the same and I think the next chapter in our family's history was going from Acura and then Alexa store in 2001 to then expanding from Japanese only brands to the Porsche store in 2013 and then follow that by the BMW store in 2016. And that was really kind of in the next phase in our company's growth. And shortly after that I was given the reins at, in 2017 to take the company to the next level and structured accordingly and change the way that we did business. So from three brothers operating various businesses in silos but always getting along and moving in the same direction, we had to look at it from, from a different perspective and, and, and move things to more of a corporate structure with good governance. And, and so I did that in 2017 and started building my own team and yeah, happy to see that. Now looking back Covid in between that spell of, of my leadership, we're looking at now seven years and almost seven years and, and we've come a long way now being, you know, nine franchise dealerships and four business units and being one of Canada's best managed companies, which is something we're very proud of. And that's kind of been the road, the road of our story. I guess they had some success and a few bumps along the way, but that's how we've gotten here today.

Amazing. I'm going to, I want to talk a little bit more about the business side a little bit later in the podcast because you're running a very big business and probably have some pretty good insights for listeners, but sticking on sort of the, sort of the car side for a moment. So you have a number of these brands. How do you, again, this is just my curiosity to understand how this whole, the whole car industry works and the retailing cars work. How do you get to be a representative or dealer or I'm not sure what the right term is of some of these like most luxurious and sort of great brands in the auto business. Are you selling them as to why you should be a dealer for the cars or are they selling you? How does that whole process work?

That's a good question. I get asked this a lot. There really are two ways of entering the business. It is not an easy business to get involved with. And now I Mean you have to have a reputation and some history within the business in order to get involved. But I guess there's two avenues. One would be Greenfield. Greenfield would be manufacturers are constantly looking at the markets in which they operate in and those that they don't, and they determine what we call white spots. So those white spots would be areas where they see an opportunity to improve their market share or their customer experience. So, so they're looking at the sales, but also looking at customer travel times to their facilities and how convenient service is. Because the, the, the convenience of the customer also then translates into future sales. So customers would likely not select the brand if they can't have it serviced, for instance. So once manufacturers determine that, they then go out to market, typically they notify their network of dealers and then they'll notify other dealership groups or independent operators who have expressed interest in representing their brand. And, and from there there's a process that's followed. They all kind of follow the same process whereby there's an application. The application then is shortlisted to a handful of candidates who then go in to present their vision for the, for the operation and the franchise. And that needs to include the property that you propose the building to be on. You know, the size of the building that you're proposing, although you do get a lot of guidance from the manufacturers to how large it has to be based on the sales volume and how you're going to operate the facility and how you're going to look after their customers and represent their brand. So there's that, there's that avenue. The second avenue would be through mergers and acquisitions. So typically it's acquisitions in our business, not so much. Mergers and acquiring franchises is something that we've done more recently. All of our franchises and dealerships up until 2022, Jaguar, Land Rover and Volvo were all Greenfield. That was our first acquisition in 2022. But there is a lot of activity in the M and A space in our industry right now. A lot of consolidation where, where you'll have smaller dealer groups or, or dealerships with, with, or an owner with one, one franchise or one dealership selling into larger dealer, dealership groups, some, some publicly owned companies and even on the private equity side, there's, there's, there's some of that as well. So, so there's been a lot of consolidation. So those are the two ways. Now, even if you decide on the second avenue, the individual or dealership group would have to be approved by the manufacturer, which requires the right level of experience and training within our Industry and accreditation and what have you. So that's what makes it a little bit more difficult for anyone who's outside of the industry. Even if they had piles of money to invest in automotive, retail still would look to have an operator on board who can gain the trust of the manufacturing partner for the approval process.

Right. And under option one where it's Greenfield and you say to Porsche or whoever, we want to, you know, be your dealer in this location and we can do it, do they say, assuming they like you, they say, great, and you put up all the money and do everything and we'll just let you sell our cars. Or are they partners in some way on building it out? Because, you know, they probably want a certain look and feel to make sure it matches their brand, quality or standard.

Yeah. So once you get past the highly competitive application and presentation process and you're awarded the franchise, you sign an LOI and you commit to certain things. Most manufacturers, there have been facility funds in the past, so each manufacturer handled things differently. But for the most part, manufacturers are really stepping away from any sort of facility funds. So there could be, for instance, a manufacturer that would provide you with a certain amount of money per new vehicle retailed for a period of three years after you complete your project in order to help with some of the construction costs. But for the most part, majority of OEMs have moved away from that. Dealers are responsible for that capital la. So either purchasing the real estate and building on your own and owning the building or obviously leasing. Our strategy has always been to own the dirt and construct the facility. And so we're just as much on the real estate in the real estate business as we are on the retail automotive side of things. And that's really what has allowed us. Retail automotive can be lucrative and profitable and provides for a, a good living. But our growth has really been attributed to, you know, long term real estate value growth and equity, which has kind of helped us to continue to grow and purchase dealerships and build more. So, so, so yeah, it's, it's a, it's a capital intensive operation, not just from the construction of the facilities, but also the carrying costs associated with the, the, the assets that we have and as well as the massive investment in labor and human capital. So it's a pretty capital intensive business and it takes quite a bit of transactions to make sure you're making payroll and paying the bills every month.

Well, there's a good barrier to entry that you've built up, I'm sure a moat maybe as Buffett Calls it, okay, so you've got the franchise or franchises and the locations now and in terms of how you operate them. I love learning, you know, when people do things for the first time. And I think I read all the way back in 1979, your father and uncle started offering free car wash with every visit, which might have been the first time this was done in the industry. And that. So correct, correct me if I'm wrong. And that to me is really the part of the client's sort of history and the, the initial start of super, super client service that I think is what your, your mantra is. Can you talk about first of all, is that true? And can you talk about what you're doing on these sort of to make that customer or client experience an exceptional one?

Yeah, you did read it correctly. I mean when the foundation of our, of our company and the early days of our company, where were, you know, the brothers understood the importance of the customer. And so that has led to us being a customer centric organization. We understand that nothing happens until a customer purchases a new vehicle. Right. And so when we communicate to within, within our organization, to our employees. And a lot of our training is about how it's not about the customer always being right. It's about the customer being at the center of everything that we do. And the customer is the most important aspect of our business, our most important asset. And then that's followed by our employees because our employees are the ones that are able to provide the level of service that we expect and that our customers expect for us and on behalf of us. And that, that includes me. So, so we are, we're two things. We're, we're customer centric and employee centric. It's all about people. And yes, it was the small things like the car wash back in, let's call it the early 80s that was being provided by our company was something that was unique. Offering loaner vehicles was something that is common today with luxury stores. Most luxury stores was something that wasn't so common back in the 80s to provide customers with loaner vehicles and valet service. And those were the things that we were doing early on. And so we've continued to evolve our offering to our customers. I mean, several things that we do. I think that the most important is making people feel welcome in our dealerships, making them feel like they're a guest in your own home. Treating our customers the way that we want to be treated. It's the simple things that make a good person. And I think that they also make a Good company. So staying true to who we are and staying true to how our business started, but obviously adding, adding various levels of sophistication and innovation and technology to support that are things that, that we've, that we've always held at the forefront of what we do.

I think I remember the first time I met you. Oh man. 5, 6, 7. Whenever it was years ago, going up to that second level, I think in your Brampton dealership and you had the coffee, you, you know, beautiful kitchen, open area, coffee maker. Like it's clear that you're striving for a high standard and a good client experience.

For sure. Yeah. And we do. I, I mean we, from, from our showrooms. I mean you, you mentioned earlier that there, there are manufacturer mandates and there are corporate image programs that all dealerships have to follow, but we, we take the corporate image program and then take it a step further. And so, and that, that most times is, is an investment that we make in, in our facilities. So ensuring that our showrooms and our, our common areas for our customers are, are luxurious and that they make them feel welcome. Personalized service is something that's, that, that we focus on ensuring that, that customers feel like they're getting, that they're getting a service that's, that's tailored to them. Knowing our customers by their first name and knowing what their likes and dislikes are is important and offering that VIP treatment. So we've. One thing that we did during, during COVID it was something that we were working on prior to Covid, but we kind of brought it to market quickly. During COVID was Polycaro Access. And it's this kind of very, very customer focused way of delivering the sales and service experience. And so from starting off with our enclosed vehicle deliveries to close clients and our, our ability to, to facilitate the transaction for customers either in service or in sales without them coming into the dealership was something we had been doing prior to Covid, but Covid really accelerated the implementation of the program. And, and today we have probably a half a dozen of full size vehicles and closed carriers on, on the road. And our, our, our every day we're delivering this amazing delivery experience to our customers. So, so doing things like that is what we, we feel sets us apart and we're always looking to, to innovate and improve the experience for our clients.

Yeah, nice. Talk a little bit about maybe industry trends or what's happening in with the vehicles. You know, when I started driving many decades ago, my first, second and third cars were all standard manual gear Shift cars, I love them. Acura was the first one, Acura Integra and that required you know, three pedal driving. Now I, as my listeners know, I've talked about before, I have a Tesla. Um, I don't touch the brakes almost most of the time. It's basically one, one pedal and one gear and then some portion of the time the car drives me and I don't touch anything but I stay very alert. Just to be clear, I watch everything. So technology has changed dramatically and now obviously electric is coming and as I said, autonomous driving. So how do you see this sort of shaping and changing the vehicles and the industry in general? And what are you guys doing in this new world that's evolving here?

Things have already started to change and they're changing quickly. They're obviously transition to electric vehicles is at the top of the list. There is government regulations that are being imposed which have really pushed OEMs to, to accelerate their, their, their EV plans. And so we're seeing that already. I mean we started investing in electric vehicle technology back in 2012 so ensuring that our dealerships have the right infrastructure. And as of, and as of today, every one of our dealerships has electric vehicle infrastructure in place that, that supports the vehicles that we're selling. I mean every, every one of our manufacturers have a different stage in there electric vehicle offering but, but it's a significant investment in, in the technology and it's not just our forward facing technology in our showrooms and having charging stations available for our clients, but also in our workshops to ensure that our technicians have the proper charging infrastructure and not just charging charging infrastructure, but the right tools and equipment in order to repair batteries. The training that's involved both on the sales, the service and the parts side to ensure that all of our employees are up to speed with the offerings of our manufacturing partners, but also the technology in general and then on top of that facilitating the installation of EV infrastructure at our customers houses. So it's a very complex technology and something that has definitely changed the way that we do business. You mentioned autonomous driving features. I mean Tesla has some great autonomy and there's various different levels of autonomy that every manufacturer is implementing in their vehicles which, which will definitely change the way that, that we do things moving forward. There is also different business models that have affected our industries on, on the retail and on the manufacturing side some manufacturers have moved towards agency models which, which, which alleviates the need for dealers to purchase cars from the manufacturing partners so they're no longer a distributor and us being the retailer there we become an agent and they're really the, the seller of the vehicle. So, so that's, that's happened as well as direct to consumers. So some manufacturers have come to market, especially some of these new EV entrants have decided to go direct to consumer consumer and not have dealers. That's the Tesla model. And so, and then there's, then there's, you know, there's certain manufacturers and we represent one of them in Volvo who have decided to sell their EVs differently than they sell their combustion engines. Right. With, with a one price promise and, and a little bit of a, of a different online experience. So, so shifting business models, I mean customers expectations are definitely changed. And so with that I just mentioned online vehicle purchasing. There's customers that want to do more online and take advantage of technology and do things like virtual test drives or have vehicles drop off to the front door rather than coming into the dealership. So those are things that we're working on as well. So I mean a lot of changes not just to the technology in the vehicles, but also to the way that consumers are experiencing the product in dealerships or through the manufacturers.

Yeah, I want to touch on that again in a moment before we do. So what are you seeing as the sort of the most tech advanced features today and also what's the most luxurious features you're seeing on cars today and maybe give us a glimpse into the future. What should we be expecting in the years to come, both tech, tech and luxury.

We just talked about EVs and autonomous vehicles, augmented reality, heads up displays. The digitization of the cockpit is something that is taking off lighting controls and lighting displays. I mean advanced driver systems. There's some incredible technology coming down the pipe which is going to be introduced in, in just a short period of time where vehicles will be able to see kilometers down the road and warn of any type of danger that can be upcoming. Connectivity is obviously a big one. With all this technology in our lives, from our phones to our watches and then our cars today the technology for the most part is a little clunky. But over time I think that we're going to see a lot more integration with our daily lives. And so I think that that's something that we can look forward to. And then enhanced safety features. I think there's a lot coming, there's this vehicle to everything, communication for improved safety and traffic management. So I think we've seen a lot in the past 10 years. I think the next five will likely have us seeing more change to how we integrate our lives with our cars than we have in the past 10 years. So of interesting things coming.

Nice. What about luxury, though? I know there's cars now that'll give you a massage as you're driving, massage your back or whatever from the seat. What's sort of some of the most luxurious things you've seen or again, we may, we may see soon in some of the luxury vehicles either you sell or you, or, you know.

Yeah, I think it's on the luxury side of things. You said you sent me a massage, which is one of them. Ambient lighting, massaging seats, higher quality finishes, more sustainable finishes on the interior. And I think what we will see is as autonomy becomes more relevant, that cars will move to more of a, you know, first class type of seating with, you know, who knows, maybe driving down the road with an apple, you know, virtual reality headset on and, and, and integrated with your vehicle while your car drives. Drives useful. But I think over time that'll evolve and I think that cars will, will emulate more of a living room, luxurious living room or five star accommodation than they will looking like a race car.

All right, I'm looking forward to it. Okay, so I want to, I want to go maybe a little bit behind the curtain now. I don't know if you're a Seinfeld fan. Are you a Seinfeld fan? You know the show. So, so I mean, I love it. I think people know I love it. And maybe we'll get the clip up when we sort of put this whole thing together. But there's the, the amazing clip where Jerry is trying to buy a car from Elaine's boyfriend Putty, and he's given him a great deal. And then Putty and Elaine break up and Putty comes back, he's like, okay, just a few more extras. We got the rust proofing, we've got the surcharge, we've got the additional overcharge. He goes, we've got the keys. Jerry goes, keys. Buddy goes, how are you going to start the car?

Let's finish this up.

Did you two break up?

That chick's whacked. Or history. Just left out a couple of things. Rust proofing, rust proofing, transport charge, storage surcharge, adjustments, additional overcharge, binder's fee, finder's fee was on the lot. Yeah, that's right. Floor mats, keys, keys. They're gonna start it,

You know, anyway, so, you know, I say this, I laugh a little bit because, you know, I've bought a number of cars over my life. It's A stressful situation because it probably is, aside from a house, one of, one of, if not the most or the largest purchase of people's lives, which they do maybe once every 4 to 6 to 8 to 10, whatever the number is, years. It's stressful. So first of all, I'll ask you if rust proofing is real, but I'm just kidding. I don't. I haven't been asked to pay for that.

We haven't proved the car in a long time, so I know there's some that still do that, but that'll answer my question. It's not really necessary.

Right. But, you know, I think you talked a little bit about, you know, Volvo and the one price, like when I bought my. And this was long, long time ago. I bought the last LR4 Land Rover that we bought. Not from you, you know, long time ago. You know, it was a whole production and there was required warranty, things we needed to buy as well, even if we didn't want them. And I sat in there for 40 minutes while all the paper was. It was crazy. And then when I bought my Tesla, it was three clicks on. On the thing. You couldn't negotiate anything. And, and that was even surprising to me. I kept saying to them, can you, can you throw. When I picked up the car, you got, you got to throw in something, sir. We. The price is the price. One to the. Finally, I got them to give me a little phone thing that'll plug into my, you know, iPhone and so it sits nicely in the car. Probably was 26 bucks. I was happy as can be. But anyways, it was a, you know, very, very different experience. So first of all, take that experience. You talked a little bit about the online and the delivery and this and that, but what are you doing to make that sort of a pleasant experience for folks? And obviously there's that whole negotiation piece that people get nervous about too. Talk a little bit about that.

Yeah. And. And so, yeah, it's funny. I mean, our industry has a bad rap, you know, over, over the years. And you think about the used car salesperson and negotiating and, you know, kind of that cloak and dagger method of selling. And I mean, we, we've always tried to, you know, it starts with, with culture. So bringing on the right people into our organization who fit our culture and our industry is not perfect. There, there, there may be. You know, there are great experiences out there and there are not so good experiences out there. However, you know, we made a conscious effort to move towards luxury a few years back and with that, we do a lot of, a lot of work on studying how some of the best brands in the world engage with their luxury customers. So from the Four Seasons to brand like Chanel and, and you can go on and on with, with different examples, but obviously the, the pricing and negotiation and you know, especially when a trade is involved, it's, it's still up to a dealer to negotiate with the client and, and put a deal together. So it's, you know, dealer resale for less is still something that is relevant. I mean, Tesla's direct to consumer, so it's, it's a little different. I think for us it's really understanding the customer. You just mentioned you wanted to negotiate and you wanted something. I mean, there are customers that may want something or may want to negotiate. There are others that couldn't be bothered with negotiating. Just give me the best number right out of the gate. I'm going to do the deal with you and I trust you to do that for me. So it's really understanding your customer, creating this customer centric culture so that we're not being confrontational with our customers. It's a very transparent approach, putting everything out in front of the customer and just offering a seamless experience. Right. And if it does come to working on numbers, I think that's where things get uncomfortable. So when it's negotiating the price, we try not to go back and forth with managers. It's one person making that decision and then, you know, providing the best possible number to the customer based on the inventory that we have, the programs that we have, and what the current marketplace is like for that vehicle. So that's kind of the traditional sales process. I mean, we're opening two new stores in the next month and we're moving towards a different type of sales process. So this is something that we'll incorporate into all of our dealerships. But you know, our new stores are taking what we have learned from our current dealerships and implemented some of these different sales processes and sales roles where really there's one person handling a customer from beginning to end. And so some of the, you know, the uncomfortable nature of going into the finance and insurance office and meeting somebody new who's sitting there and wants to sell you 15 products after you just spent quite a bit of money on a luxury car or a car in general just isn't, isn't. That's, that's where, that's where it starts to feel less transparent and doesn't feel as comfortable. So, so we're, we're moving towards kind of a one touch sales process where, where customers deal with one individual from beginning to end and those individuals are supported by, by other, other team members. And we think that that's what our, our customers, especially on the luxury side, want. They want a relationship and they don't want to deal with five different people from, from beginning to end. And then it's meeting the customer where they want to be. If it's online, it's online. If it's over the phone or on a video call, that's where we'll do it. If it's in dealership, you know, we'll do it there. And it could be a combination of more than one of those places. So that's the way that we're handling it. I mean, it's all about innovating the process and taking feedback and learning from your customers and doing what's right for the customer, not necessarily what's always right for us.

Right. And so is there any like one single piece of advice? You know, this is a tough question, I'm sure, but give to a potential car buyer, whether they're the new car, the used car buyer, whatever it is, so that when they come in, or they maybe they don't come in, as you say, but when they think they're ready to, to move forward. Is there some advice that you'd give them so that they can get what they want and be happy and it can all work out well for everyone?

I would say yes. I mean, I mean, the first thing is doing your research. I think that's extremely important. And narrowing down to the brand and the vehicle type that you're after. I think visiting a dealership is still extremely important, especially the road test. I think testing the vehicle. And if you have an opportunity, find a good dealer. I mean, we do it more very often, which is providing extended test drives. Yeah. Live with the vehicle for a couple of days and bring it home and make sure that your family's comfortable with it and the size is right. And find a dealership with a good reputation for customer service. And just doing your research that way, I think takes a lot of the guesswork out of it. And there's so much available online. I mean, our customers are coming in, you know, armed with so much information compared to years past. And so it makes it easier, I think it makes it easier for the individual who's facilitating the transaction at the dealership level, but also makes it significantly easier for the customer as well when the research is done at the forefront. And then find a dealer. That you're comfortable working with. And finding a dealer close to home is important, but more important than that is finding a dealer that, that you can trust and an individual that you enjoy working on.

Right. Okay, good couple. I don't know. I call it the fun stuff, but it's all still cars. Of all your brands and cars, what's your favorite make, model or whatever that your typical client. I don't know what typical is, but let's say your typical client might or could buy. Not the supercars that I want to ask you about in a second, but you know, all your brands, you know, what's your favorite car that a regular client's coming in and could buy from you tomorrow?

So when I'm asked this question, it's kind of like asking, which child do you love the most? So I love them all the same, obviously. But I'm a sports car enthusiast. I love the track and I think there's, there's a lot of different examples of, of cars that, that are exciting. I mean, I've, I've always been a fan of the Porsche brand. I've always been a fan of the BMW brand from when I was a kid. Like when I was a kid. Acura didn't exist until 1986. Lexus didn't really exist until the 90s. And so you grew up with certain cars on your wall and I had, I had the Lamborghini and the Ferrari and the Porsche and the BMW and the road and track magazines out so it to 60 times and quarter mile times and, and sling times and things like that. So, so I, I'm always a fan of something that I can take out on a, on a nice day, whether it be out on the streets or out on the racetrack.

Amazing. I love those cars too. So speaking of the, of the race cars and the. Well and the super sport cars, you have a whole division that focuses on this.

Yes, yes. So super sports cars, we have a division called Motion Endeavors. So we specialize there in late model low kilometer super sports cars. We also have a leasing division which, which shares the same space as Motion Endeavors. So it's a complement to Motion Endeavors that allows our customers to lease those vehicles. But we also provide our customers at all, through all of our brands with, with, with leasing capabilities when, when there's more bespoke programs that need to be put together or, or different needs for our customers. And then on the motorsport side, we, we haven't raced since COVID We. We're taking delivery. Actually we just had a meeting today. Our Our two racing cars show up tomorrow. So they'll be running in a, in a regional racing series called the FEL Series this, this summer. So there's, there's events. We'll be at Toronto Indy, we'll be at the entire motorsport park and then in Quebec and, and Ottawa for, for races through with that series. So, so we've got a little racing division where kind of fuels our passion and, and, and gets us, gets us out to the racetrack and, and then a super sports car division for, for our customers that are looking for something a little bit, you know, a little bit more exclusive and high performance.

Nice. So, so what's the greatest, I don't know, greatest, most expensive super sports car that you, someone can actually buy from you or that someone has bought from you?

Oh, there's, there's several, I would say that you know, everything from rare, rare Ferraris to you know, McLarens and, and Lamborghinis and you know, certain Porsche vehicles, I mean will carry, will carry pretty much every vehicle make and model. You know, the, the when we say super sports cars, typically something over $250,000. So you know, it's definitely sold, you know, million, over a million dollar cars and things of that nature. Vehicles of that nature there.

Amazing amazing.

So always something interesting down, down at that, at that store. Nice.

So, okay, so moving on from cars, what I wanted to chat with you about briefly is actually now back to managing the business. As you said, it's a family business. You're the second generation, third generation coming in and it's notoriously difficult to keep businesses going from first to second to third etc, and this is now a very, very large business, complex, four different divisions, et cetera. What, what sort of insight or guidance can you give to our listeners or just to share with us how, how are you managing this enterprise and, and making sure it's sort of set up to succeed for multiple generations and into the future.

So the first thing, I mean getting to this point we was, was, was not easy. But, but the thing that we really focus on, focused on and, and I attribute this to the three brothers who started the company was for them to get together, have a proper shareholder agreement in place which is rare for, you know, entrepreneurial businesses especially when, when family members are involved in business. But then also to make a decision to say hey, we're going to take a step back and we're going to appoint and acknowledge who the leader of this company will be and then everyone accepting that obviously and then moving forward together. So I have cousins who are in the business. I mean we're all partners. Even though I have my role and my title, we have various roles and titles throughout the organization. We separate that what are titles at work and, and, and in the business does not make one person more important than the other as, as it pertains to our family business and the shareholders of the business.

Right.

So they are, they're equals and so we're able to separate that I think which is very important. Proper governance. We, we have, we also have family meetings which we'll, we'll conduct once a year in order to ensure that everyone's brought up to speed on, on what's happening with the business and the future plans for the business. So even if you're involved in the business or you're not involved in the business or you have various responsibilities within the business, you have an opportunity to take a peek behind the curtain. We pay everyone in organization, including family members for the job that they do. So based on your experience and based on your talent, you have a certain role within the organization and you're paid accordingly. So then that's how we separate the business from the family side of things. So we're always looking out for the best interest of the company, not necessarily for the best interest of the family members within the company. And just having certain rules in place as far as for the third generation coming in now we're ensuring that there are rules in place for what level of education they need to complete before coming into the family business and, and do they need to work elsewhere before they come into the family business and how many years at certain within certain roles before they can promote, be promoted to, to the higher, higher roles and executive roles within, within the organization and, and a lot of family planning just continuously working on, on individual family planning. There's three families involved in the business that now obviously it's grown from there. Given that I've got my own kids now and continuously working on our families and ensuring that our families are set up for the future is what we do to ensure that we continue to grow and evolve the business and put our heads down and work hard on our day to day but ensure that we're set up for long term succession and growth.

Great. Good insight, appreciate it. And then so last sort of important question here which I alluded to at the beginning that I would ask, you know, you have your finger on the pulse of the consumer buyers. Maybe a different consumer than others of course but you know, we went through the COVID supply issues. Now we're Going through high interest rates and that impacts people. So what are you seeing? And if someone was asking you, or I'm asking you, I guess, sort of what's your view on the economy today? What are, what's, what's the pulse of consumers and buyers today? And what are you looking when you look forward, what do you see? Because obviously looking forward is the key for making investment decisions, which we do, and some of our listeners probably do. So what's the economy look like to you from your vantage point? And where are we headed if you, if you can tell us the future a little bit.

So from an automotive retail perspective, things are, are in good shape. We haven't had a significant downturn due to the higher interest rates. We have seen a normalization and a little bit of a stabilization of used car values. And, and so things, you know, during COVID and after the pandemic, you, we were in a situation where new cars were unavailable due to supply constraints and high demand and used cars were in some cases higher value than even the new car. And so, I mean, we all knew that that wouldn't last. And so we have seen an adjustment in pricing as far as consumer confidence. I mean, especially on the luxury side of the business. Sales are solid. I mean, we had a little bit of a tough January compared to last January. But you know, one month doesn't necessarily mean for a year, doesn't give us an indication as to how long that's going to last for. But, but if we look at the last six months, things have been steady and solid. We've seen a little bit of a substitution effect where customers may be coming out of a lease and wanting to maintain the same payment. So they may be going to a different type of vehicle within the same brand. We're still staying in the luxury segment, but moving towards something different to maintain their payment. We have seen that. We've also seen more buyouts in, in recent months where customers are buying out their leases because the values are still solid. But we're also seeing an increase on the sales and service, sorry, the service and part side due to the fact that there are some more age vehicles coming out of COVID in the pandemic where there wasn't a lot of supply. But overall we're, we're pretty bullish on the state of the economy. Our forecasts have the first half of the year being a little tougher than the last half of the year. As you know, we anticipate the bank of Canada to adjust rates in the second half of the year. I think we've all, you know, we're all anticipating that. And, and we think that, you know, leading into an election year next year and, you know, some stabilization and inflation and lower interest rates, that we'll see a spike in the economy and especially in sales. Obviously, we keep our ear to the ground on construction and home starts, and obviously sales are a little bit tougher on the construction side. But for, for all of you who kind of look to automotive retail as a gauge for economic, consumer confidence and economic growth, I mean, you know, things are, things are pretty good right now. Good. So nothing to worry about.

No, I was getting, I was worried about you, but I think you're, you're in good shape.

Yeah, we're all good.

I'm just kidding. So. Okay, so I know you have to go in one second, last question for you, which is nothing to do with cars, or maybe it's everything to do with cars. We always ask our guests at the end, you know, our theme here we call we. Our tagline is your wealth unlimited. We're an independent firm. We are not limited by maybe some of the constraints other financial firms have in the sense of what we can do for clients. We're very, you know, we're like you, super, super focused on client service, focused on finding the best investment options for them, you know, wherever they are around the world, et cetera, et cetera. So our tagline is your wealth unlimited. Unlimited is know, big word for us here at Gensler, wealth. And so I always like to ask our guests, last question before you go. If you weren't doing what you're doing now, although I feel like you might tell me, I think I know your answer, but you could do anything. The world is unlimited to you. The world's your oyster. What would you be doing if you weren't sitting here talking to me or running Polycaro Group? Yeah, it's a good question.

I, I love what I do. I'm very passionate about it. And, and I, I grew up knowing really nothing else other than, than this, than this business. And. But if I, if I did pivot from this industry and if I look to another one of my passions that's not car related because I love motorsports, it would likely be in sports. I mean, I'm, I'm a big sports guy. I like the business of sports. I find it interesting. So if it wasn't doing this, and if it was, you know, a absolutely unlimited, I'd love to own a sports team, run a sports team, because I think I could be, I Think I could be a pretty good owner of a sports franchise. It's very similar to the business world. It's about people, it's about structure. And, yeah, I think. I think if I do anything else, it'd likely be owning a sports team for one of those. One of the sports that I'm passionate about, whether it be soccer or hockey or motorsports, even.

Okay. All right. I love it. I thought you were gonna say you'd be a race car driver. That's why I said I thought I knew your answer. That's. That's a no, no, no, no.

I mean, I am a race car driver. I do have my racing license. I don't. I don't compete. But, no, I'm too old for that now, so. So I'd have to just be that, maybe the owner of the team. So, like, an owner of an F1 team would be pretty cool.

Awesome. Awesome. All right, sir. Well, thank you very, very much for your time. Wanted to give our listeners some insight into the luxury car business and your world, and you've obviously built an amazing business and carried on, you know, what your father. What your father and uncle started. So I'm sure they're proud, and you got the whole family going there.

It's.

It's really amazing. So thanks so much for your time. Really appreciate it. Look forward to seeing you soon. And thanks for sharing your insight with us today.

Thanks, Brian. I appreciate you having me on.

Okay.

The unlimited podcast is hosted and produced by Brian Ginsler and is edited and mixed by myself, David McMillan. This podcast is not to be taken as investment advice. If you like what you heard, don't forget to rate the podcast and follow us on social medianslerwealth. Thanks for listening and see you next time. Sam.