Changing lanes: in a tough market, auto dealerships make quick moves to boost the bottom line.
For black-owned auto dealerships, business in 2004 was a two-way street. While the auto industry sold near-record numbers of new vehicles, indicating a drive in the right direction, many dealerships were forced to shut their doors. As a result, growth in the number of black auto dealerships all but stalled.
In fact, sales for the BE AUTO DEALER 100 were downright down·right
1. Thoroughgoing; unequivocal: a downright lie.
2. Forthright; candid.
Thoroughly; absolutely. anemic anemic
pertaining to anemia. . These dealerships grossed $8.91 billion in 2004 compared to $9.03 billion in 2003, a 1.34% drop. The CEOs of these companies also trimmed payroll by 3.86%, from 12,295 workers in 2003 to 11,821 in 2004.
Despite flat sales for most black dealerships, some hot wheels Hot Wheels is a brand of die cast toy car, introduced by American toymaker Mattel in 1968. It was the primary competitor of Johnny Lightning and Matchbox until 1996, when Mattel acquired rights to the Matchbox brand from Tyco. took off. Purchases of crossover Crossover
The point on a stock chart when a security and an indicator intersect. Crossovers are used by technical analysts to aid in forecasting the future movements in the price of a stock. In most technical analysis models, a crossover is a signal to either buy or sell. utility vehicles such as the Ford Escape, Honda Pilot The Honda Pilot is Honda's second SUV fully built and designed by Honda, released in the summer of 2002 for the 2003 model year. The Honda Pilot is built in Lincoln, Alabama. Honda's initial SUV offering for many years was the Passport, which was a rebadged Isuzu Rodeo. , and Toyota Rav RAV Rous-associated virus.
Rous-associated virus 4 grew 16.6%. Large domestic sedan Sedan (sədäN`), town (1990 pop. 22,407), Ardennes dept., NE France, on the Meuse River. A noted textile center since the 16th cent., Sedan also has metal and brewing industries. The town became part of French crown lands in 1642. sales rose 13.9%, with continued strength expected in the consumer, business, government, and rental-car fleets. With the improving economy in 2004, business purchases boosted sales of large vans 6.6%, while more exciting minivan designs helped increase overall van sales by 4.1%.
Luxury car sales dropped 2.5% in 2004 on weak stock market performance, but BMW BMW
in full Bayerische Motoren Werke AG
German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. of the Hudson Valley
The Hudson Valley refers to the canyon of the Hudson River and its adjacent communities in New York State, generally from northern Westchester County northward to the cities of Albany and Troy. (No. 77 on the BE AUTO DEALER 100 list with $36 million in sales) is one of many auto dealers making quick moves to keep sales up. At the beginning of 2004, Roland J. Walton, president of the Poughkeepsie, New York-based dealership, forecast and achieved a 20% sales increase by cashing in on the lucrative repair business. During 2004, Walton invested $250,000 to build a certified See certification. collision center, repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. his dealership into a full-featured BMW service, parts, and repair outlet. "There is a tremendous opportunity for us in the fixed operations area," he says. Walton expanded operations to include service technicians, counter people in the parts department Noun 1. parts department - the division of a business (e.g. a service garage) that sells replacement parts
business department - a division of a business firm , and an expensive technology infrastructure to support complex BMW servicing.
Walton estimates that the new collision center, which opened Jan. 1, 2005, will increase his dealership's bottom line by 20% in 2005, and be expects a 100% return within 18 months. "It's already starting to show returns," says Walton. "There's no question in my mind it's going to have a huge impact on our bottom line this year and, more importantly, in the years to come."
Gregory Jackson of Prestige Automotive (No. 1 on the list with $1.1 billion) is another auto dealer who made hard-line moves to counter a tough market. His dealership pushed revenues above the $1 billion mark by increasing its volume of fleet sales, which are generally less profitable than retail sales. But the sheer volume of these sales, along with some built-in servicing agreements, allowed Prestige to increase its sales as well as its profitability in 2004.
Dealers like Jackson and Walton, who could maneuver the changing roads during 2004, maintained their course toward profitability. But those that couldn't fell by the wayside. Among the former BE auto dealers that no longer own their dealerships are: Freehold Freehold, borough, United States
Freehold, borough (1990 pop. 10,742), seat of Monmouth co., E central N.J.; settled c.1650, called Monmouth Courthouse (1715–1801), inc. as a town 1869, as a borough 1919. Chevrolet, Cobb Parkway Chevrolet, and Chandler Chandler, city (1990 pop. 90,533), Maricopa co., S central Ariz., in the Salt River valley; inc. 1920. It is both a residential community and a center for research and technology. Tourism is also important, and the San Marcos Golf Resort is in Chandler. Lee Buick-Pontiac-GMC Inc.
SHIFTING INTO REVERSE GEAR
Foreign-car sales continue to accelerate past domestic vehicles this year. "There is not a dealer I know who would not be pleased to have a Toyota, Lexus, Nissan, Infiniti, Honda, or Acura franchise," says Sheila Vaden-Williams, president of the National Association of Minority Automobile Dealers. The problem is that manufacturers feel they have enough dealerships and are not expanding import franchises, which means dealers must turn to the open market to buy popular import franchises--at a high price. "It's not uncommon to see a prime Mercedes Benz Mercedes Benz
expensive automobile and status symbol. [Trademarks: Crowley Trade, 368]
See : Luxury or Lexus store carry a price tag that includes $10 million to $20 million in blue sky," says Vaden-Williams.
In addition to his new collision center, Walton is also expanding his pre-owned business beyond focusing on certified BMW products as he has in the past. The dealership started out a with a 50/50 mix of new and used-car sales. But as BMW expanded its new-car focus, Walton's new-car business increased faster than his used-car business, resulting in a shift to 70% new and 30% used.
Lacking brightness, luster, or vitality; dull. See Synonyms at dull.
Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" domestic sales also means tough times for African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. auto dealerships with the Big Three. Numbers of African American-owned GM dealerships continue to fall from a peak of 160 in 1998. Currently, black-owned GM stores make up just 1.6% of GM dealerships, with 113 stores out of 7,200--the lowest number since 1988. "We are going backwards, no question," says Marjorie Staten, executive director of the General Motors Minority Dealers Association, a nonprofit organization Nonprofit Organization
An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well.
Examples of non-profit organizations are charities, hospitals and schools. that is not directly affiliated with GM. "We had a total of about 17 terminations of African American dealerships due to unprofitability, and approximately eight of those did not continue with a minority-owned dealership," says Staten.
At Ford, the number of African American-owned dealerships decreased from 205 to 199. However, no black Ford dealers on the BE AUTO DEALER 100 list went out of business, says A.V. Fleming, executive director of the Ford Motors Minority Dealers Association.
The number of black DaimlerChrysler dealers held steady last year, with 17 franchise sales balanced by 15 or 16 new appointments, says Jesse Greathouse, president of the DaimlerChrysler Minority Dealer Association. Customer traffic in most members' showrooms during the 2004 third and fourth quarters matched the previous year's numbers, but dropped in the first quarter of 2005 by 15% to 25%. "Growing import share is definitely having an effect on us. If your domestic manufacturer just isn't selling any product, that's going to hit us first before it hits the big guy, because they can continue to have the money to pound away with advertising and try to draw in customers," says Greathouse.
While foreign sales continue to rev up Verb 1. rev up - speed up; "let's rev up production"
increase - make bigger or more; "The boss finally increased her salary"; "The university increased the number of students it admitted"
2. industry-wide, Ed Fitzpatrick, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Fitzpatrick Dealership Group in Modesto, California Modesto is the county seat of Stanislaus County in the U.S. state of California. As of the 2000 census, the city population was 188,856. Current census estimates place the population at 206,300. (No. 16 on the list with $125 million in sales) says American manufacturers are introducing better and more stylish cars that will win consumer acceptance. "The domestics are moving forward, but the goalposts are changing, because the imports aren't standing still. It's going to be very interesting the next few years," says Fitzpatrick. All three of his Valley-branded dealerships have expansion or new building projects in the works. And Valley BMW aims to increase its base 50% by moving 500 cars in 2005 and 650 in 2006, topping BMW's expectations for 300 vehicles a year.
The key to its 11.6% sales increase from 2003 to 2004 is the dealership's small but strong service and parts area, says Fitzpatrick, who also owns Coliseum Coliseum: see Colosseum. Lexus in Oakland.
Last year, Fitzpatrick led car dealers to drive through Proposition 64, a California ballot initiative restricting shakedown lawsuits by private attorneys. Ambiguities in California's open-ended 1933 Unfair Competition Law allowed lawyers to file a wave of frivolous Of minimal importance; legally worthless.
A frivolous suit is one without any legal merit. In some cases, such an action might be brought in bad faith for the purpose of harrassing the defendant. suits against businesses, eroding their bottom lines. Proposition 64 effectively struck down this law, passing with 57% of the vote last November. Fitzpatrick will continue his leadership among dealers as chairman of the 1,400-member California Motor Car Dealers Association, second in size only to NADA, through the end of 2005.
SHOWING HIS COLORS
With Isuzu losing ground in the U.S., revenues for Nederland, Texas-based JK Chevrolet Isuzu (No. 50 on the list with $54.9 million in sales) stalled 11% in 2004. Isuzu's U.S. market share has dropped 20% to 25% each year for the past three years, which impacted JK's formerly Isuzu-heavy sales. "That had a traumatic effect on our sales and service numbers," says JK President Robert Turner For the American football offensive lineman, see Robert Turner (football)
Robert Turner is an American professional poker player based in Downey, California.
Turner is known for introducing Omaha hold 'em into poker-playing circles. . Four years ago, JK sold 40 to 45 Isuzu vehicles per month; now selling six is a good month. For the past two years, rather than actively creating new models that draw customer interest, Isuzu bought other manufacturers' overcapacity o·ver·ca·pac·i·ty
Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. , reselling cars designed by other companies.
Turner's good news is that he retired all of his debt to GM's Motors Holding Division, the financial partner that lends to most startup GM minority dealers. The dealership delivered more than 1,200 new Chevrolets and approximately 800 used vehicles last year, and expects similar volume this year. With the GM loans behind him, Turner, 46, is in an "opportunity model," where he can now invest in other dealer ventures or non-automotive businesses using store profits that once went toward paying his GM debt.
Turner says that taking advantage of minority business opportunities and becoming a supplier to large corporations present new horizons for growth. He plans to offer retail and automobile service for companies trying to meet diversity goals or that use out-of-market minority vendors. Turner also plans to expand commercial retail sales by attracting business from nearby Fortune 500 companies. To help with these goals, Turner escalated his local visibility by joining the board of directors of the large Beaumont Rotary Club and the Better Business Bureau of Southeast Texas Southeast Texas is a subregion of East Texas located in the southeast corner of the U.S. state of Texas. The subregion is geographically centered around the Houston–Sugar Land–Baytown and Beaumont–Port Arthur metropolitan areas. . Now he can stay on top of the business climate and use his knowledge of businesses entering or exiting the marketplace to help with sales prospects and maintaining receivables.
The civic contributions of franchise new-car dealerships and their employees are unrivaled, but dealerships' roles in local community activities is not fully appreciated, says NADA's Taylor. NADA is also leading efforts to provide more transparency and better understanding of the auto financing process. Its Website, www.nada.org, has a section devoted to consumer education.
William E. Shack, president of Shack Findlay Honda (No. 18 on the list with $110 million in sales) saw an immediate boost in sales this year when he beefed up personnel and revamped advertising campaigns to better target minority outlets.
Shack added 10% more staff and shifted print and radio advertising toward the dealership's Hispanic and African American markets. Along with Shack Findlay Honda's strong, fuel-efficient Honda products, these quick moves powered the Henderson, Nevada Henderson is a city in Clark County, Nevada, United States, seven miles southeast of Las Vegas. As of the 2000 census, the city had a total population of 175,381, with a 2006 Census estimate placing the population at 240,614. , dealership through a period of high gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by prices to increase revenues 49.6% over the previous year, from $73.5 million in 2003 to $110 million in 2004. The dealership leaped from selling a total of 165 new vehicles per month in 2003 to 200 in 2004, and from 66 used cars per month in 2003 to 88 in 2004.
Shack takes pride in his dealership's 2004 customer satisfaction-based Honda President's Award The President's Award may mean:
an auto dealership[ must be at least 51% black-owned and have been fully operational for the previous calendar year.
Top 10 Growth Leaders 2004 Company Location Sales * Shack Findlay Honda Henderson, NV $110.000 Prestige Automotive Detroit, MI 1066.579 McKinney Dodge McKinney,TX 50.005 Ultimate Pontiac Buick GMC Isuzu Fredericksburg, VA 40.600 Walker Family Auto Group Laurel, MS 49.549 Baranco Automotive Group Lilburn, GA 151.215 Panhandle Automotive Inc. Crestview, FL 140.000 Nissan-Mitsubishi-Kia of Lake Charles Lake Charles, LA 42.581 Forest Lake Ford Forest Lake, MN 29.944 BMW of the Hudson Valley Poughkeepsie, NY 36.027 2003 % Company Sales * Increase Shack Findlay Honda $73.540 49.58 Prestige Automotive 766.507 39.15 McKinney Dodge 37.142 34.63 Ultimate Pontiac Buick GMC Isuzu 30.200 34.44 Walker Family Auto Group 36.911 34.24 Baranco Automotive Group 120.125 25.88 Panhandle Automotive Inc. 111.881 25.13 Nissan-Mitsubishi-Kia of Lake Charles 34.048 25.06 Forest Lake Ford 24.094 24.28 BMW of the Hudson Valley 29.387 22.60 * IN MILLIONS OD DOLLARS. TO THE NEAREST THOUSAND. AS OF DEC. 31, PREPARE BY B.E. RESEARCH REVIEWED BY THE CERTIFIED PUBLIC ACCOUNTING FIRM EDWARDS & CO. Top 100 Auto Dealers Summary 2005 2004 2003 % Change Total Staff 11,821 12,295 -3.86 Total Sales * $8,906.685 $9,027.646 -1.34 * IN MILLIONS OF DOLLARS. TO THE NEAREST THOUSAND. AS OF DEC. 31, PREPARE BY B.E. RESEARCH REVIEWED BY THE CERTIFIED PUBLIC ACCOUNTING FIRM EDWARDS & CO.