Some of the most inter-esting dealerships are the ones on the lower tier of the Ward's Dealer Business 500.
They tend to be privately owned by individuals with a lot of grit and entrepreneurial spirit. And although they are not taking in hundreds of millions of dollars like the dealerships at the top of the list, $65-70 million in annual revenues is far from chump change.
"We're happy with the size we're at," says Gary Labadie, owner of Labadie Olds-Cadillac-GM of Bay City, MI. It first made the Ward's 500 list last year at No. 499. This year it's moved up with sales of 3,187 new and used vehicles and revenues of $72.3 million.
A lot of dealers would be happy with that size indeed.
Mr. Labadie says success comes from an exceptional - and honest - management team. Also key is ensuring that customers keep coming back, especially GM employees who work nearby.
"We get a lot of repeat business, and a majority of that, about 80%, comes from GM employees and their families. The great thing is they have a lot of choice here - three great lines of cars," he says.
Mr. Labadie says the dealership's biggest challenge is knowing what the factory is going to incentivize and making sure they have the necessary products to keep up with demand.
The dealership's top selling vehicles were GMC trucks and SUVs - accounting for 60-65% of total vehicle sales.
Mr. Labadie says the dealership probably can't get any bigger than it currently is.
But buying another dealership within the next few years is definitely an option, he adds.
"A great product and a great economy". That's what Lee Willis, general manager and vice president of North Park Lexus in San Antonio, TX, describes as the main reasons for the dealership's success.
The luxury dealership makes its debut on the latest Ward's 500 with 1,870 vehicles sold and total revenues of more than $71.6 million in 1999.
Mr. Willis says a great work environment with less demanding hours than the typical dealership has given North Park Lexus little employee turnover. He adds that the Lexus brand has enabled the dealership to attract high caliber employees.
"Customers look to their salesperson as they would to their stockbroker, as a consultant with a great amount of expertise," Mr. Willis says.
With the dealership's relatively close proximity to the U.S.-Mexican border, Mr. Willis says Mexico's strong economy significantly helped drive sales for the year. North Park Lexus' service department underwent a large expansion in the middle of 1999 to cope with the sales growth. The Lexus RX300, which was introduced in the spring of 1998 as a 1999 model, comprised roughly 35% of the dealership's sales.
Mr. Willis believes North Park Lexus will sell even more vehicles in 2000, echoing the division's hopes for bettering 1999's phenomenal results.
An emphasis on customer satisfaction and employee enthusiasm is a key concept at Bill DeFouw Chevrolet-BMW, says President Dennis Gernhardt.
The Lafayette, IN, dealership may its debut on the Ward's 500 list. Total sales for 1999 were over $65.3 million with 2,793 new and used vehicles sold.
Mr. Gernhardt's father-in-law, Bill DeFouw opened his first Chevrolet dealership in the home of Purdue University in 1961. A BMW franchise was added in 1982 "because the BMW saw what we were doing with Chevy and they were impressed with our way of doing business," Mr. Gernhardt says.
That business philosophy includes a "Customer Satisfaction Committee" where employees representing all of the dealership's departments meet once a month to discuss ways to improve customer and employee satisfaction. Some ideas to come out of these meetings have included an employee newsletter, a monthly picnic, an improved phone system and improved parking.
Mr. Gernhardt says he is committed to continuing his father-in-law's community service with the March of Dimes, the United Way, Junior Achievement and other charities. "When we hire someone we make sure they know our philosophy - that each person needs to give back and not just take away from the community."
Mr. Gernhardt also says the dealership places a strong emphasis on used cars as a major part of sales. Another integral part of the equation is DeFouw's body shop.
"Some dealers feel they are required to have a body shop just to say they have one, while we look at it as a great source of profit," says Mr. Gernhardt.
