Category Archives: Dealer Group
Posted by Auto Executive
I’ve yet to find someone who has been able to explain the claims made by the publication “TOP 125 Dealers for 2013.” Actually it is sponsored by a vendor and when you say sponsored it sound like the stats were compiled by the publication and the study was sponsored by the vendor. Being in the consulting side of the automotive industry and after Slicing, Dicing & analyzing over 500 dealers including some of the largest groups in the country, I found it fascinating that some of the larger groups and dealers, who are hands down larger and better performers are not in the list. It intrigued me to find the real stats behind the scene, one of my dealers who I have visited and conducted training, the Classic Chevrolet of Grapevine who are the N0 1 dealer in the nation for last 8 years running and I witnessed them selling over 140 New Chevrolet in one single day, which was not even a record day for them. Not only are they the No. 1 dealer in new cars sales, Classic Chevrolet officially Adds #1 volume GM Parts Dealer title as well. They stock over 7 million dollars in inventory and have about 50 employees to handle the parts and customer requests. In 2003, their parts department was number 76 in the nation. From there, Classic Chevrolet reached number 2 in 2012. Today – in early 2014 – They are the number 1 volume GM parts dealer out of approximately 4,000 GM dealers in the United States. If I give you their mind boggling stats for the used vehicles sales you most likely will scratch your head as to how do they do it? That is topic for another day.
- Who is No 1?
Classic Chevrolet of Grapevine and the masters orchestrating this huge operation Mr. Tom Durant and Hagen Durant are geniuses in disguise and my hats off to them. Yet they fail to make it to the top dealers list!!!
There are other dealers and dealer groups, that I know personally, that fail to make it to this list despite the fact that their successful operations are far better than most of the dealers and groups on the list. Some of these dealers are not interested in divulging their private information for the sake of keeping a low profile while laughing all the way to the bank and others quite frankly were probably not informed to submit the information, since they are not the privileged client of the vendor who is compiling the information for the sake of showcasing their own clients. If all the dealers participated it may not be the case.
- True Benchmarks
Keeping the above in mind Automotive News should have a disclaimer that their report is an advertisement. If Automotive News is a credible news authority for the automotive industry, it should be totally unbiased in reporting the news or any stats since most of the industry owners, executives, managers and public who are investing money on publicly traded auto groups are looking at this information and making serious financial decisions. There are some dealer executives who are making these reports as a benchmark for their operations. On the other hand, if and when a successful dealership’s manager offers these numbers as a bench mark he or she will be immediately replaced for a real manager who can and must outperform above and beyond these numbers. I would say it can be a starting point for some real performers.
- Who is competing here for the Top Spot?
Let’s not forget that currently NADA “National Automobile Dealers Association” is quoting more than 17,000 new car and truck dealers with approximately 37,500 separate franchises. This top 125 dealer list is not reflective of the top dealers doing business in USA. Let’s not kid ourselves and read between lines to see what is the real information presented to you. Now we understand that the list of these TOP 125 dealers and the dealer group are not the real one, but since it is out on the Internet I wanted analyze it to see how they are performing just among themselves in their own little world. If you study the breakdown you will find it fascinating in a lot of different ways and I would like you to just see from statistically driven point of view.
- Where do we fit the sales numbers for wholesale vehicle!! Not in RETAIL?
At this point, I would like to highlight one point “WHOLESALE” which is not retail. I do not believe that we should be taking account for the wholesale units as success performance indicators for a dealership or a group. Actually high amount of wholesale should be taken as a negative impact for a performance indicator. Since when is wholesaling a vehicle is considered to be a good thing? The dealers who are buying your vehicles at auction are taking those vehicles preparing it and selling right under your nose across the street for much higher rate of return. “If you are serious in taking a wholesale unit as a performance indicator than I would say that Manheim Auction is wholesaling over 10 million units a year with over 50 billion in revenues and they should be the number one dealer in the world”.
- Seeing the forest from the trees
Let’s talk about another fact before I go into the detail of the analysis, most of the dealers will agree that just selling more cars means nothing if they are not making money! Anyone can give away cars and that is not rocket science. Similarly if a group sells the highest number of cars doesn’t mean that they are the top dealer especially if their per location sales, revenue and profit is below average. For example if you take the top performer dealer group in the list, The Auto Nation Inc. when you see the numbers in the report states that The Auto Nation Inc. has 228 Roof Tops, Sold 292,922 New Units Average 107 Units Per Roof top per month and if you go back to the top of this article about Classic Chevrolet who sells that many vehicles in a single day not a month.
- Pre-Owned Vehicles Sales and Profit a strong relationship.
The Auto Nation sold 204,572 used vehicle averaging 75 units per month per roof top. Now these are the stores just selling and focusing on new vehicles only. Look at your average profitable dealership across country they are selling more pre-owned units vs new vehicles by far and making money hands over fist. In the industry it is well known that you can’t really make huge profits on new vehicles compared to that special pre-owned vehicle which is unique and only you have it. But if you don’t have that vehicle, how would you do it? Back to wholesale, since the same report shows that Auto Nation has wholesaled 70,742 vehicles. We all know who the buyers were at the auctions – the other dealers were the buyers at the auction and they fetch up those units to sell them right across Auto Nation locations. To be fair to Auto Nation they are not at the bottom in sending cars to wholesale, actually they ranked 29th out of this 125 dealers and the crown goes to Fitzgerald Auto Malls ranked 1st. Out of the list of 125 dealers for having the lowest number of units wholesale per location. The highest number of units wholesale was at West-Herr Automotive Group Inc. wholesaling on an average of 1,010 units per location or across 18 locations they wholesaled 18,177 units last year, if Auto Nation with 228 locations were to wholesale at the same scale they would have to wholesale 230,242 units while they only wholesaled 70,742 units. Back to my points – do not lump sum an entire group’s numbers to showcase the larger amount rather see how they are performing across board by per roof top. Like someone said “Seeing the forest from the trees.”
- Can you tell fact from fiction?
At this time I just want to remind the readers that the original report is on the Internet available free to download. It may be a publicity stunt as usual to drum up new business by having a feather in someone’s hat. I have seen numerous times that certain magazines behind the scene partially or wholly owned by vendors who showcase their ranking or awards with great hype. If all the dealers are not participating or informed to participate, you will have more fiction than fact. This reminds me of vendor, dealer rating and reviews sites. That is another topic and I have a great deal of information on; I will have a blog post especially dedicated to that aspect of our business. Transparency is great but how can you be anonymous and be a transparent at the same. It doesn’t work for me. In my opinion it should not work for you either. I will address that in another article fairly soon.
- Automotive News, Is it a legitimate news source?
Automotive news is established and recognized as a legitimate and respectable source that is quoted by C-level executives across the country and across the world. According to Automotive News, “Automotive News is the nation’s pre-eminent newspaper covering the automotive industry serving vehicle manufacturers, suppliers, dealerships, marketers, and others allied with the industry since 1925.”
- Read between the lines…..
Numbers and the analyses of the report, or slice and dice the report to read between lines: Now let’s look at the report and dissect it to determine the biggest gainer and the losers on ranking among their own little world of 125 dealers. I have strictly taken their numbers as it is published in the report available on the net. Below you will find a quick list of gainers and losers. You can also view the dissected report from this link on Google Drive. You can also view the original report from by clicking this link.
- Biggest Gainer in Ranking:
Bommarito Automotive Group: was ranked 68 by Automotive News by our recalculation and positioning it ranked 6th in the group by gaining 62 positions or ranks in the group. Dealer Website powered by Dealer Track Interactive
Biggest Drop in ranking:
After a quick analysis over the week-end, I found the results very interesting and I wanted to share them with my network. This information is for your entertainment only and not to grade any provider or company. I would love to hear from you if you find this interesting and if there was another twist that I missed. Even though I have prepared these numbers with care and interest, but I request you to do your own research before making any decision and if you find any errors please let me know and I will update it as soon as I can. Do not use this report to make any financial decision, but if you have a question you can reach me via email at email@example.com.
Partial list of Top 125 Dealers and Ranking by AN & Updated by Rafi Hamid
Quick info on my next blog: I have come across my next article, we see all the dealers are struggling with reports and reviews for vendors. Just as you know that a shrewd dealer can manipulate his or her reviews & CSI, I have seen vendors and some of the rating sites for vendors are playing numbers and review games. I have been associated with Drivingsales.com as a founding member, on a Board of Directors and have seen the process in action. I have also seen Dealer Rater and other review sites and know how they market their product. What is in it for you and really what is at stake? It is fascinating information that you do not want to miss. Keep your eyes open for my next posting. Follow me on Twitter to stay in touch. https://twitter.com/AutoExecutive