The Road to Recovery

B.E. auto dealers cope with a sluggish economy by using incentives and other measures to drive traffic in their direction

the key to survival is through dealership expansion. Last year a number of dealers increased the number of dealerships they own. More dealerships can mean across the board reductions in supplies, savings in advertising budgets, less duplication, and a bigger profit margin.

Both Cornelius Martin of Martin Automotive Group (No. 3 on the BE AUTO DEALER 100 with $353.1 million in sales) and Harrell bought dealerships last year and say the purchases made their companies stronger. NAMAD also wants to see more dealerships awarded to African Americans.

“We want 15% of the dealer body to be entirely minority,” says Harrell, chairman of The Harrell Co. “Right now it’s less than 5%. We are having ongoing discussions with the manufacturers, trying to come up with ways to increase those numbers.”

To bolster their strength, NAMAD officials are also spending more time trying to build coalitions with other ethnic minorities. “We need to form more effective coalitions,” explains Vaden-Williams. “We should not be fighting over the crumbs. We should be fighting for a bigger share of the pie.” To facilitate coalition building, NAMAD has increased the number of seats on its board of directors to include other minorities. 

The most difficult challenge for minority dealers, says NAMAD, is tearing down the barriers to buying import dealerships. Those dealerships that sell imports fare much better in times of economic distress, the group says. But some African Americans say those dealerships are still out of reach. “We would like to own some import stores,” says Martin. “But in the past they have always eluded us. It’s a whole different ball game. The import manufacturers are not as aggressive as the Big Three with trying to recruit qualified minorities, especi
ally African Americans.”

Martin says he has tried several times to purchase import stores but has been unsuccessful. “It’s still the good old boys network. They want to pair you with a white partner who is already in the system but I want to stand alone based on my record.” 

While it is difficult to get import dealerships, a number of African Americans are making some strides in that area. In January 2002 David Stephens opened a new $4 million Honda dealership in Baytown, Texas, a suburb of Houston. Stephens, who also owns Millennium Motor Cars in Plano, Texas, was last year’s BE auto dealer of the Year.

Stephens, president and owner of Stephens Automotive Group in Plano, Texas (No. 46 on the BE AUTO DEALER 100 list with $63.8 million in sales) began talks with Honda in November 1998 and admits it took a while to clinch the deal. He received his letter of intent in October 1999 and construction of his 35,000 square foot state-of-the-art facility began last June. “Our first full month of business was pretty good,” he says. “We expect to sell more than 1,000 units this year.”

Winston R. Pittman Sr. is another dealer who has built his success on import brands. Pittman, who owns Winston Pittman Enterprises based in Louisville, Kentucky, has

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