Desperate in Detroit

Black dealerships retune their businesses as consumer demands change

dealer by the end of 2007.

In most Lexus stores, sales were down slightly, but profits were equal to or greater than profits in 2005. Volume was way up at Toyota stores. Typical Toyota profit margins were 2.5% last year, while Lexus dealers earned between 5% and 7.5%. This has made some of these dealerships attractive to investors. According to Watson, Toyota franchises are being bought at five to six times earnings with prices driven up by private equity groups and public companies. Among those to be sold is San Juan Capistrano, California-based Family Automotive Group (No. 7 on the 2006 BE AUTO DEALER 100 list).

B.E. Flashback
In our first Auto Overview, June 1999, we found that the AUTO DEALER 100 had benefited from the record sales of the Big Three automakers at the time–General Motors, Ford, and DaimlerChrysler: The dealers’ collective gross revenues of $6.3 billion that year had increased by 13% from the previous year. However, only 28 of them carried imports, even though nearly half of the imports sold in the U.S. had been purchased by African Americans. Sheila Vaden-Williams, then the executive director of the National Association of Minority Automobile Dealers, was among those leading the charge for black dealers to “get their fair share of opportunity.” Today, almost half the BE auto dealers sell imports.

Top [10] Growth Leaders

Company Location 2006 Sales* 2005 Sales* % Increase
Briarwood Ford Inc. Saline, MI $145.377 $57.439 153.10
Walker Family Auto Group Laurel, MS 98.901 52.581 88.09
Wade Ford Inc. Smyrna, GA 248.912 135.477 83.73
Prestige Automotive St. Clair Shores, MI 1,545.524 1,010.284 52.98
Hubbard Automotive Group Charlotte, NC 133.358 89.374 49.21
Northpoint Ford Lincoln Mercury Inc. Bastrop, LA 28.600 19.478 46.83
Cox Nissan Inc. Bronx, NY 57.413 39.432 45.60
Boyland Auto Group Orlando, FL 391.620 275.995 41.89
Westborough Buick Pontiac GMC Inc. Westborough, MA 20.331 14.543 39.80
Coastal Motorcars Corpus Christi, TX 34.761 26.267 32.34

*IN MILLIONS OF DOLLARS, TO THE NEAREST THOUSAND. AS OF DEC. 31. PREPARED BY B.E. RESEARCH.
REVIEWED BY THE CERTIFIED PUBLIC ACCOUNTING FIRM EDWARDS & CO.

Auto Summary

  2006 2005 % Change
Employees 11,766 12,207 -3.61
Sales* $9,508.623 $9,018.526 5.43

*In millions of dollars, to the nearest thousand. as of Dec. 31. Prepared by B.E. Research. Reviewed by the Certified Public Accounting firm Edwards & Co..

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