Changing Lanes - Page 3 of 4

Changing Lanes

million in sales) says American manufacturers are introducing better and more stylish cars that will win consumer acceptance. “The domestics are moving forward, but the goalposts are changing, because the imports aren’t standing still. It’s going to be very interesting the next few years,” says Fitzpatrick. All three of his Valley-branded dealerships have expansion or new building projects in the works. And Valley BMW aims to increase its base 50% by moving 500 cars in 2005 and 650 in 2006, topping BMW’s expectations for 300 vehicles a year.

The key to its 11.6% sales increase from 2003 to 2004 is the dealership’s small but strong service and parts area, says Fitzpatrick, who also owns Coliseum Lexus in Oakland.

Last year, Fitzpatrick led car dealers to drive through Proposition 64, a California ballot initiative restricting shakedown lawsuits by private attorneys. Ambiguities in California’s open-ended 1933 Unfair Competition Law allowed lawyers to file a wave of frivolous suits against businesses, eroding their bottom lines. Proposition 64 effectively struck down this law, passing with 57% of the vote last November. Fitzpatrick will continue his leadership among dealers as chairman of the 1,400-member California Motor Car Dealers Association, second in size only to NADA, through the end of 2005.

With Isuzu losing ground in the U.S., revenues for Nederland, Texas-based JK Chevrolet Isuzu (No. 50 on the list with $54.9 million in sales) stalled 11% in 2004. Isuzu’s U.S. market share has dropped 20% to 25% each
year for the past three years, which impacted JK’s formerly Isuzu-heavy sales. “That had a traumatic effect on our sales and service numbers,” says JK President Robert Turner. Four years ago, JK sold 40 to 45 Isuzu vehicles per month; now selling six is a good month. For the past two years, rather than actively creating new models that draw customer interest, Isuzu bought other manufacturers’ overcapacity, reselling cars designed by other companies.

Turner’s good news is that he retired all of his debt to GM’s Motors Holding Division, the financial partner that lends to most startup GM minority dealers. The dealership delivered more than 1,200 new Chevrolets and approximately 800 used vehicles last year, and expects similar volume this year. With the GM loans behind him, Turner, 46, is in an “opportunity model,” where he can now invest in other dealer ventures or non-automotive businesses using store profits that once went toward paying his GM debt.

Turner says that taking advantage of minority business opportunities and becoming a supplier to large corporations present new horizons for growth. He plans to offer retail and automobile service for companies trying to meet diversity goals or that use out-of-market minority vendors. Turner also plans to expand commercial retail sales by attracting business from nearby Fortune 500 companies. To help with these goals, Turner escalated his local visibility by joining the board of directors of the large Beaumont Rotary Club and the Better Business Bureau of Southeast Texas. Now he can stay on top of the business climate and use his knowledge of