Bigger Is Better

Anthony March and Ernest Hodge have joined forces and dealerships to make March/Hodge Holdings an auto powerhouse

side of Atlanta and Hodge won the bid for the return of the stores as an "open point" from some stiff area competition, including one of the manufacturer’s largest dealers, Jim Ellis of Atlanta. "He’s doing an exceptional job rekindling the VW business on the south side. People talk about customer service, but don’t really put it into practice," says Hughes. "They [Heritage] were ranked No. 4 in the southeast region for customer satisfaction and in the top 5% of all dealers nationwide," he adds. The dealership is now averaging 55 new car sales per month versus the five cars a month sold by the previous owner of the franchise.

Planning to merge two businesses on either side of the Mason-Dixon line isn’t easy. The merger and holding company structure took about five months, hundreds of phone calls and dozens of trips between the two regions. In the meantime, as the partners figured out how to combine their separate operations, they began to acquire some of the dealerships they’d been offered. Besides the acquisition of the healthy Lloyd franchise in Florida, the new March/Hodge team purchased three Galaxy GM franchises
and an Isuzu franchise in the metropolitan Baltimore area. Both were among the deals they’d considered while solo.

"Merging companies doesn’t necessarily mean merging your businesses. You can share things like equipment that you both need. All the money goes to the bottom line. We’re attacking and consolidating the expense items. You can still own 100% of your business, but have an advantage when you consolidate. You can borrow money at a lower interest rate — [if you were] formerly paying 1% over prime, now [you can] borrow at 1% below," explains March. The duo — and Cunning-ham — explain that it’s not only because of the number of franchises, but because there’s a centralized process. This way banks, insurers, data processors and others are only dealing with one centralized office, so the company is able to achieve economies of scale.

For example, in Hartford, March has one body shop where all his brands are repaired and is building one parts shop that will service all of his franchises. There’s only one parts director who will supervise and do all the buying of parts for the four brands, plus one service director for all of the stores. Similarly, in Atlanta, Hodge is building a new reconditioning center that will service three different franchises — Cadillac, Oldsmobile and Volkswagen.

Once a month, the senior sales managers of March/Hodge gather for a joint sales and marketing meeting to discuss plans and strategies. To provide a cohesive marketing image while increasing cost-effectiveness, the company has created its own advertising agency — Galaxy Advertising. The agency, which started in January 1999, is responsible for creating and buying all the dealership’s advertising, from direct mail campaigns to newspaper, radio and television ads. Their purpose in creating the spin-off: "To have a team that can consistently share what’s working at one place

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