The New Frontier

Auto dealers are rethinking the way they do business and finding new solutions to old challenges

his wife, Julia, became sole owner-operators of a separate store, Lake Powell Ford, in Page, Arizona.

Martin says several factors contributed to his success. Since Ford did a lot of advertising that he didn’t need to duplicate, Martin was able to cut back on ads. Low interest rates lightened floor plan costs, and whereas Martin had always previously done fixed-interest-rate pricing, he was helped by variable-interest rate. “It wasn’t just sales, it was the expense control and profit control on the actual sales we did, making sure that the gross profits were maximized,” he says.

Toyota’s advance in the car market created a new-car-sales challenge, however. Martin shifted some advertising from new trucks to new cars, spotlighting updated Thunderbird and Focus models.

Deepening used-car market penetration and sparking interest in his stores, Martin expanded his selection of late-model as well as older used cars, widening the cheap-to-expensive spread. Paradise Ford sold 927 used vehicles and 1,450 new vehicles. About 500 of the new sales were fleet. The retail business of both his Florida and New Mexico stores was split evenly between new and pre-owned vehicles.

BUILDING FOR THE FUTURE
A couple years after expanding from one to three franchises, Huntsville Autoplex in Huntsville, Alabama (No. 47 on the BE AUTO DEALER 100 list with $62.9 million in sales), spent 2003 getting back to the basics. Dealer education has been the well from which owner Ellenae Fairhurst has drawn strength along with many other black dealers. “African American dealers typically have come through a dealer-development program that provides us with very, very strong theoretical and practical background for how to run the business. Many times non-minority dealerships have been in the family for years, and dealers sometimes haven’t had as much formal training as we have in the operational aspects. The DaimlerChrysler black dealer body year after year outperforms the non-minority body for our manufacturer,” says Fairhurst.

She believes that when the economic environment fully rebounds, the black dealer landscape will look much like it does today.

AUTO DEALER ELIGIBILITY
An auto dealership must be at least 51% black-owned and have been fully operational for the previous calendar year.

TOP 10 GROWTH LEADERS

Company Location 2003
Sales*
2002
Sales*
%
Increase
Prestige Automotive Detroit, MI 766.507 317.076 241.7
Fitzpatrick Dealership Group Modesto, CA 112.000 63.500 176.4
Family Automotive Group Whittier, CA 227.318 134.553 168.9
Jaguar of Novi Novi, MI 66.000 40.869 161.5
Westminster Buick-Pontiac-GMC Westminster, CA 55.679 35.873 155.2
Hank Aaron Automotive Group Union City, GA 76.684 49.612 154.6
Southwest Pontiac-GMC- Southwest Hummer Houston, TX 58.802 38.622 152.3

* In millions of dollars As of Dec. 31, 2003. Prepared by b.e. Research. Reviewed by the certified public accounting firm Edwards & Co.

Top 100 Auto Dealers Summary 2004

2003 2002 % Change
Total Staff 12,295 12,037 2.14
Total Sales* 9,027.646 8,204.220 10.04

* In millions of dollars. As of December 31, 2003. Prepared by B.E. Research. Reviewed by the Certified Public Accounting firm Edwards & Co.

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