Auto Dealers: Revved Up for Sales
The auto industry steered toward the road to profitability in 2010 after surviving its years-long trek on its version of Dead Man’s Curve. U.S. auto sales reached 11.5 million vehicles sold last year, up more than 2 million from 2009. General Motors not only emerged from government-induced bailout, the company reported its first annual profit in years. Chrysler also survived bankruptcy and now thrives under its new owner, the Italian carmaker Fiat. Ford, Hyundai, and Kia grabbed market share Toyota lost from product safety recalls. In fact, pent-up consumer demand is expected to put dealers on track to sell nearly 12% more new cars and trucks in 2011 than last year, forecasts the National Automobile Dealers Association. BE auto dealers posted a 16.29% boost in revenues to $5.6 billion and a 1.42% increase in employees to 7,155.
Despite such positive developments, scores of African American auto dealers are part of the industry’s wreckage. Gregory T. Baranco, CEO of Mercedes-Benz of Buckhead (No. 14 on the BE auto dealers list with $100.5 million in revenues), says that while TARP (Troubled Asset Relief Program) funds from the federal government rescued GM and Chrysler in 2009, those manufacturers used bankruptcy as “an opportunity to arbitrarily eliminate the dealers they believed to be in weaker markets. In doing so, they terminated more than 70% of the African American dealer body.” From 2008 to the beginning of 2011, the number of black-owned GM dealerships dropped from 89 to 36. Black-owned Ford stores shrank from 129 to 79. African American Toyota/Lexus stores, however, dwindled only from only 25 to 24. The BE auto dealers list, which ranked the nation’s 100 largest black franchises on the 2008 roster, now designates only 60 franchises for that distinction.
Says Marjorie Staten, president of General Motors Minority Dealers Association: “Our members had to rethink operation efficiency and incorporate new ideas to gain the maximum value from their expenditures, customer relationships, and dealership staff.”
Emanuel D. Jones’ Legacy Automotive (No. 15 on the BE auto dealers list with $100 million in revenues) drove sales after acquiring franchises at a deep discount and then retooling them into revenue-generating machines. In 2008, he purchased a 130,000 square foot store near Fort Benning in Georgia after one of the world’s largest chains of Chevrolet dealerships was forced into bankruptcy. Jones, a state senator who had reached the rank of captain in the Army Reserve, sponsored on-post activities. Now, roughly 40% of the dealership’s business comes from servicemen stationed at the military base. The McDonough, Georgia-based dealership increased its sales by 52% in 2010.
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