NOVI, MI — It's a time of challenges for auto dealers, and a meeting here of the Michigan Assn, of Certified Public Accountants' automotive sector addressed a lot of them.

Emerging throughout the day-long session is the resiliency of franchised dealers in the face of top-management changes at two domestic auto makers, the ability of dealers to sustain cutbacks by their manufacturers and the vital role dealers continue to play in their communities.

Here are insights and advice from some of the participants:

  • Pete Gerosa, a former General Motors Corp. executive and now acquisitions director for the 21-store Serra Automotive Group, based in Grand Blanc, MI: “There's a world of difference between brands as far as ‘blue- sky’ valuations are concerned. Make sure if you're buying to look at everything involved. We couldn't buy a great General Motors store in Wichita, KS, because we couldn't find anyone willing to relocate there. We did buy Gold Coast Cadillac in Newark, NJ, a real find because it's making $6 million a year and has no floorplan, instead paying for cars itself.”
  • Tom Lamb, broker, Granville, OH: “Make sure whether you're buying or selling, you have a good relationship with the factories involved. I handled a sale of a Chevrolet-Cadillac store losing $300,000 a year to a Buick-Pontiac-GMC store losing twice that much, with GM approving the consolidation. Above all, if you're buying, make the seller reduce his expectations beforehand on future sales and profits.”
  • Gerard C. Schmid, president, Ed Schmid Ford, Ferndale, MI: “In view of all that's happening in a tough market and at the factory, keeping the morale of our 72 employees up is a daily challenge. Letting my managers be creative in stimulating business is one way of meeting that challenge. We have a 401K plan in which contributions can be adjusted by the employees. Ford's warranty costs are way down and I expect residuals on our vehicles will be going up. The Ford Fusion now is equal to the Toyota Camry in resale value. Sure, there have been a lot of changes and challenges, but my store has been around for 46 years and I greet every day as a great experience for our employees.”
  • Colleen A. McDonald, president, Holiday Chevrolet, Farmington Hills, MI; Century Dodge, Taylor, MI; Livonia Chrysler-Jeep, Livonia, MI: “Chrysler talks about cutting the metro Detroit dealers in half — from 44 to 22 — but dealers in the city will be tougher to sell out for Alpha stores than in the suburbs. Alpha is a good idea, combining the three brands. Chevrolet should be all set in a year on product. Chrysler will take three or four years, but they're going in the right directions.”
  • Patrick Dwyer, president, Dwyer and Sons Volvo-Subaru, Commerce Township, MI: “Our Volvo-Subaru store dates back to my dad, Joe Dwyer, one of Detroit's original import dealers. My two brothers and I each are responsible for a sphere of influence — one for Volvo, one for Subaru and one for the service department. What gives us traction is the fact that the entire Detroit market has only two or three other dealers handling Volvo and Subaru brands. The bigger Volvos have loyal fans and carry the mail for us. Subaru appeals to younger buyers, who are big Internet users and like its all-wheel-drive vehicles. As for no-haggle pricing, 35% like to negotiate and I find there's less trouble on pricing with import brands than domestic brands. As for my satisfaction with the car business, I really like it when longtime customers come in to reminisce over the classic Volvos and Subarus they bought from us.”