Desperate in Detroit - Page 2 of 4

Desperate in Detroit

Detroit Three have made is focusing too much of their attention on their full-sized trucks and SUVs over the past several years and neglecting their passenger car market. “They were focusing on where the market was and producing what the consumers wanted, but when the gasoline prices went sky-high and the demand for big trucks and SUVs basically fell out of the market, they found themselves unprepared for the new market reality–smaller more fuel-efficient vehicles.”

While American automakers have struggled, imports and the luxury segment continue to be sweet spots for auto dealers fortunate enough to offer these cars. Among them is Orlando, Florida-based Boyland Auto Group (No. 4 on the BE AUTO DEALER 100 list with $391.6 million in sales). Owner Dorian Boyland says his fleet of Mercedes helped the dealership increase sales by 15%. Gregory Jackson, owner of Prestige Automotive (No. 1 on the BE AUTO DEALER 100 list with $1.5 billion in sales), noted that sales for 2006 surpassed 2005 by 50% thanks in part to the opening of additional retail outlets. About 10% of the sales boost came from a new Mercedes-Benz store that opened in St. Clair Shores, Michigan, last May.

Ford’s performance took a toll on its black-owned dealers. The Ford Motor Minority Dealers Association currently has 138 African American members owning a total of 159 dealerships. During 2006, nine new black Ford dealerships came aboard, but 38 African American-owned dealerships were sold or lost. Among them were Duane L. Reid (No. 44 in 2006), who sold off his Rome, Georgia, dealership, and Bryant Williams (No. 87 in 2006), who exited his sole Highland Park, Illinois, dealership.

As Ford continued to lose market share, several dealers on our BE AUTO DEALER 100 list got rid of Dearborn nameplates while keeping their other dealerships. “They didn’t sell all their dealerships; they just got away from their Ford dealerships because the Ford dealerships weren’t making any money,” says Dr. A. V. Fleming, executive director of the Ford Motor Minority Dealers Association. Among them were: Baranco Automotive Group of Lilburn, Georgia; Mike Pruitt Automotive Group in Akron, Ohio; and Aeneas Williams in Bastrop, Louisiana.

GM: trying to right its ship
GM has begun its turnaround plan. It has introduced very desirable and successful products that were well received by the industry. Some examples are the new GM trucks–Chevrolet Silverado and GMC Sierra 1500–and the new Chevy Tahoe and Suburban. Its respected Cadillac brand is enjoying a bit of a revival, and the Saturn line had one of its best months in February. “We see that GM is bringing out a lot of new passenger car models, a lot of more fuel-efficient crossover utility vehicles. It’s taken some time to get to this point, but we think they are on the right track,” says Bragman.

GM hopes that new designs and greater emphasis on technology will translate into consumer demand. “Executing great exterior designs will continue to be a major focus. Additionally, interior design, where our customers ‘live’ in their cars, will