Pumping The Brakes

B.E. auto dealers used cost cutting and customer service to avoid being wrecked by a tough economy

years. His other franchise, however, Conyers Jaguar of Novi, Michigan, is still in operation. But those that made the BE AUTO DEALER 100 list tended to minimize the problems and drive forward at the best speed they could — even if they had to push part of the way.

Those who went far managed to land on the top 10 list of growth leaders, seeing sales increases ranging from 92.3% to 26.6%. That list includes dealerships across the country, from Crestview, Florida’s Panhandle Automotive Inc. (No. 11 on the BE AUTO DEALER 100 list with $150 million in sales) to Stephens Automotive Group (No. 29 on the BE AUTO DEALER 100 list with $80.7 million in sales) of Plano, Texas. Among the BE AUTO DEALER 100, total sales dropped 7.5%, and there was a total staff loss of 2% last year.

CRUISING THE LOTS
For Harold Williams, president of Freehold Chevrolet (No. 7 on the BE AUTO DEALER 100 list with $201 million in sales) in Freehold, New Jersey, 2002 was an average year — a little better than normal, but not as strong as 2001. To maximize opportunities in a post-Sept. 11 economy, Williams used raffles, trips, used car promotions, and intangible “little things,” such as a car wash after servicing and keeping expenses in line with income. But, nevertheless, new car sales dropped in 2002, compared with 2001.

Williams says he spent more on used car sales in the latter part of the year. “I’m a new car dealer; I want to sell as many new cars as I possibly can. But at the same time, used cars were a portion of the business that had to be addressed seriously, and that’s what I did.” He adds, “I sold more used cars last year than I have ever sold.” Williams’ ratio of used cars to new went from 1:5 to 1:1.

As for the loss in new car sales, Williams says, “Our new car people were not aggressive, and we weren’t aggressive with our advertising.” So, in October, he hired a new manager who, according to Williams, “brings an intense and aggressive attitude” to the team; and the dealership saw an “immediate and significant turnaround” in new car sales.

With six franchises in Kentucky, Ohio, and Georgia, Winston R. Pittman Sr., president of Winston Pittman Enterprises (No. 14 on the BE AUTO DEALER 100 list with $145.1 million in sales), says his imports continued to sell well, while domestics were off somewhat. “In 2002, the market was saturated with cars,” says Pittman, who cut expenses by 35% at the Dodge store, laid off 20 of his 70 employees, and cut inventory by one-third in domestic vehicles. The manufacturer attracted buyers with incentives, such as rebates and 0% interest. But Pittman says incentives that lower new car prices can make trade-ins less attractive to customers, as Irving Matthews, president of The Matthews Automotive Group (No. 21 on the BE AUTO DEALER 100 list with $93.2 million in sales) knows.

“I can’t afford to keep used cars on

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