Shining In The Lone Star State

It's just over a year, Davis Automotive Inc. has nearly tripled its revenues to become the largest Buick dealer in Texas

There’s something unusual going on just off 1-20 in Dallas. On the third Saturday of each month, local residents begin arriving at Davis Buick Hyundai GMC in the wee hours of the morning-some even camp out all night–anxious to be the first on the lot. They’re not gathering for coveted tickets to a concert or sporting event, but for the chance to purchase a car for just $5.

Of course, not all cars on the lot are so cheap–only two or three patrons will have that privilege. Prices on the rest of the used car inventory are generally slashed “to the bare bones” in this first come, first served automobile feeding frenzy. So less fortunate early birds will at least drive away with a great deal on a good car. “The $5 sale is a way for us to build a rapport with our customers and give something back to the community at the same time,” says owner Richard Davis. His philosophy on selling cars is predicated on excellent customer service, which begins with building the customers’ trust. For him, it’s an integral part of making his dealerships “someplace you’d want to come and spend $30,000 or $40,000.”

The strategy has been working since October 1996 when he purchased the Dallas dealership. In his first year, Davis turned the previous owner’s $500,000 loss into a $300,000 profit. That early success did not go unnoticed. In October 1997, General Motors approached Davis about buying another dealership in nearby Garland, Texas. “Rich had already proven successful with his other stores so it seemed appropriate to offer him an opportunity to purchase the Garland store as well,” explains Alan Ross, Dallas zone manager for Buick. They expected similar results in the Garland store, and Davis delivered. For the month of January, after only three months in operation, Davis Buick of Garland was the No. 1 Buick dealership in the Dallas area.

Having purchased two new dealerships in the span of a year, Davis’ management prowess was put to the test. Yet, he’s managed to reverse downward trends in both stores while increasing the sales trajectory of his existing Indiana dealership. His ability to keep a keen eye on the bottom line while managing threefold growth has earned Richard O. Davis, CEO of Davis Automotive Inc., the title of 1998 BLACK ENTERPRISE Auto Dealer of the Year.

THE PROOF IS IN THE PROFITS
Davis Automotive Inc. is the umbrella for three dealerships that include Stephens Oldsmobile Honda in Bloomington, Indiana (purchased in 1993), Davis Buick Hyundai GMC in Dallas and Davis Buick of Garland. Last year, Davis Automotive Inc., grossed $64 million on sales of nearly 4,000 vehicles–largely due to his purchase of the Dallas dealership, which accounts for $40 million in revenues alone–slightly over a 275% increase from the $23 million of 1996.

“Gross revenues may indicate a dealer’s salesmanship, but return on sales is the best measure of a dealer’s business acumen,” says Davis, who received a GM Profit Enhancement Program (PEP) award in 1997 from the

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