The Loaded Sticker Price

When it comes to import cars, black dealers still find themselves stranded by the side of the road

by nearly 25%, from 18,000 to fewer than 14,000.

Taking their cue from Autonation CEO H. Wayne Huizenga, the domestic automakers have created their own variation on the "auto mall" theme. Under GM’s Project 2000 initiative, for example, the company’s Pontiac, Buick and GMC lines can all be offered by a single dealer. At one time, it was commonplace to have two o
r three dealerships carrying the same brands in a particular city, all vying for the same customers.

Imports like Volvo, based in Rockleigh, New Jersey, have taken the opposite approach. They are encouraging their larger operators to carry only the company’s lines. One such exclusive dealer is Dyer and Dyer, owned by Sonic Automotive in Chamblee, Georgia, which is Volvo’s fifth top-selling store in the country. "Our exclusive retailers show a higher profitability percentage of sales than our nonexclusive retailers," says Brad Bowers, Volvo’s vice president of franchise development.

Independent dealers like Tony March and Ernie Hodge have made consolidation work in their favor by joining forces to create March/Hodge Holding Co. (No. 4 on the be auto dealer 100 list with $184 million in sales), which shares both the profits and expenses of their combined dealerships. (See "Bigger is Better," this issue.) However, dealers like March and Hodge are the exceptions rather than the rule as smaller operators, black and white, fear they may be "consolidated" right out of the industry. One such dealer is Peggy Cockerham of Southlake Buick & Volvo in Morrow, Georgia, with nearly $20 million in sales, who hasn’t appeared on the be auto dealer 100 list since 1997.

"I’m caught in the crunch between both GM and Volvo’s consolidation efforts," says the 40-year-old dealer whose store is located just a stone’s throw away from Dyer and Dyer. "It’s hard to compete when other dealers are receiving manufacturer incentives for being exclusive — which I don’t qualify for, since I carry other product lines. It’s a Catch-22," she adds.

Bowers asserts, however, that all of Volvo’s dealers receive the same follow-up from the company’s regional reps. But how much time a company rep spends at an individual dealership is based on the store’s volume. "Our rep may spend days out of the week at the other dealers, but because we’re not the largest dealer, we may see him once a month for half a day," says Cockerham.

The consolidation squeeze doesn’t end there, as the line between domestic and import is becoming increasingly blurred. Now the Big Three have set their sights on market niches the imports have dominated since their arrival in the States. Ford, for example, has taken a toehold in the lucrative luxury car market by acquiring Jaguar and Aston-Martin. And it now has a presence in the small- and midsize-car category with its January acquisition of Swedish carmaker Volvo. Add to this a 33% stake in Mazda.

Meanwhile, GM owns a 49% stake in Isuzu, 10% in

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