Getting used

Strong used-vehicle sales are reinforcing new-unit records and profits among nearly all top finishers on this year's Ward's Dealer Business 500.

"We opened five new used-car sales lots in mid-Ohio last year because of the rising demand for high quality off-lease and trade-in units," says Fred Ricart, co-owner of Ricart Automotive. Total sales at Ricart's "campus" in Columbus, OH, topped the 500 list for the second consecutive year.

"New-vehicle sales continued to grow for us, but it's vital to keep used units moving because that brings in more sub-prime business and clears the decks for the new vehicles," says Mr. Ricart, who's in business with his brother.

The 500 compilation allows dealers to combine multi-franchise sales from a single business entity. That puts Ricart at the top of the list. However combined sales at Herbert Boeckmann's various Southern California dealerships, led by flagship Galpin Ford, exceed Ricart Automotive's. Ricart, with six franchises at a single location, grossed $469.2 million last year to retain No. 1 ranking on the 500.

Galpin Ford in North Hills, CA, amassed $394.9 million on Ford sales alone in surpassing Ricart for the single-brand title, 12,021 to 9,137 new units.

In the used-vehicle area, Ricart stepped up its unit sale from 10,618 in 1998 to a new-record 11,831 in 1999. Revenues went from $108.8 million to $131.4 million, establishing Ricart as the only franchised dealership to top the $100 million mark for preowneds for two years in a row.

"The Internet is a Trojan horse as far as I'm concerned," says Fred Ricart, "but my dad, Paul Ricart, told us again and again to keep on top of the useds even more than the new. The best dealers I know do just that."

Paul Ricart, who founded the dealership, died in December at age 82.

Ricart sold more used than new units in 1998, by 10,618 to 9,549. That reversed in 1999 as new-car sales climbed.

But four other upper-tier top 500 dealers sold more than 5,000 used units, two of whom also wound up with used-car sales eclipsing new.

Midway Ford, Los Angeles delivered 7,698 used and 1,410 new; Universal City Nissan, Los Angeles 5,414 used and 4,118 new; Bill Heard Chevrolet, Sugar Land, TX 5,270 and 5,631, and Roseville Toyota, Roseville, CA, 5,083 and 3,286.

Brown & Brown, a Chevrolet dealer in the Phoenix suburb of Mesa, AZ, and AutoNation Inc.'s top performer, placed third on the 500.

Trailing Brown & Brown in fourth place was another Chevy store, William T. Heard's Landmark Chevrolet, which outsold the Arizona dealership in new and used vehicles, but trailed substantially in the parts, service and body shop areas.

With $67.5 million in retail and wholesale parts sales, Brown & Brown more than tripled Landmark's respectable $21.0 million parts sum as it kept its position as the No. 1 Chevy store.

Brown & Brown also led the field in service revenues, boasting a record $16.6 million for 1999.

"We have never lost sight of the contributions of our service department and body shop to the reputation of the dealership," says principal Henry E. Brown.

He adds, "We stop at nothing to ensure total customer satisfaction, including a new parking garage to keep vehicles out of the blazing summer sun."

Landmark, one of five Hill Heard-owned Chevy stores on this year's 500, nipped Brown in new-car sales, 7,363 to 7,258, well below the higher-ranked Ford dealers, but was an easier winner on the used-vehicle side.

"Used units have been big at both our Texas stores and should stay up there in 2000," says Mr. Heard, speaking from his company headquarters in Columbus, GA.

"Our Sugar Land, TX store topped even central Houston, 5,270 to 4,895, in used sales, and we're finding that off-lease and late-model trade-in Chevy trucks and SUVs are very desirable."

All told, seven Bill Heard Chevy dealerships made it to the 500 - all in the South and Southwest.

Another strong store: the nation's top Dodge dealer, Earnhardt's Gilbert Dodge, Gilbert, AZ, a Phoenix market superstore on 36 acres. It sold 6,698 new and 4,320 used vehicles last year.

It's co-owned by Tex Earnhardt, his son Hal J. Earnhardt III and general manager Art Schaier.

The store on the Arizona capital's growing southeast side is reputed for its aggressive advertising techniques displaying "cowboy" Tex and Hal riding horses and bulls; a subprime financing initiative that brought in up to 25% of the dealership's nearly $6 million in F&I revenues, and "not least," says Hal Earnhardt, repeat customer business "2nd to none in the fiercest car market in the West."

Meanwhile, California's Fletcher Jones Motorcars becomes the highest-ranked Mercedes-Benz or luxury- car dealer in the 14-year history of the Top 500 survey.

Based in a modernistic three-year-old building in Newport Beach, Jones tallied $276.4 million in new-unit sales to advance past longtime "foreign" brand leader Norm Reeves Honda Superstore, of nearby Cerritos, CA, and JM Lexus, Margate, FL.

Owned by Fletcher Jones, Jr., the Orange County dealership has waged a long-running race for Mercedes- Benz sales leadership with AutoNation's House of Imports, of Buena Park, CA, in southeast Los Angeles.

Outselling House of Imports by 305 new cars, says Jones general manager Garth Blumenthal, has been due to a new lease strategy using "multiple security-deposit" payments below prime rates. That's in lieu of monthly payments.

Jones did $16.4 million in service revenues last year but finds itself "capacity-constrained to handle demand despite six 17-hour service days.

Pre-owned Mercedes cars are another big plus," says Mr. Blumenthal.

But House of Imports edged the Jones store in used-vehicle sales, 1,112 to 1,099.

Prestige Ford of Garland, TX is another upper tier player. That follows a hectic year for owner Jerry G. Reynolds, chairman of the National Ford Dealer Council.

Mr. Reynolds, who was preoccupied with the automaker's sorties into factory-store "Collections" and Internet selling of off-lease vehicles, nevertheless presided over his Dallas market's leap from 5,948 to 8,938 new-unit sales and $264.3 million in total income.

"I was called upon repeatedly during the year to be the voice of Ford dealers on a number of issues - and this resulted in the factory's calling a halt to their Collection program of buying stores," Mr. Reynolds says.

"It maybe was the toughest year our Ford council ever had, what with all the new Ford programs and a new leadership team of Chairman Bill Ford, and CEO Jac Nasser. I was away a lot and am grateful that our 350 employees rose to the challenge and we stayed top Ford dealer in Texas and the leading F-series truck seller worldwide."

Mr. Reynolds says he's pleased that Prestige Ford is in the company of other Ford dealers who are in the upper tier of the 500: Ricart Automotive, Galpin Ford, Earnhardt Ford Sales Co. of Tempe, AZ, and Mullinax Ford South, an AutoNation store in Margate, FL.

The V.T (Van Tuyl) network, head-quartered in Shawnee Mission, KS, placed 10 Chevrolet dealerships on the 500 roster, but none is named after its owners, Cecil and Larry Van Tuyl, being called Reliable Chevrolet, Richardson, TX, and Vandergriff Chevrolet, Arlington, TX, and the like.

In the high-flying Phoenix market, Van Tuyl has three star performers among the top three Japanese brands: Camelback Toyota, co-owned by V.T. and John O'Malley; Showcase Honda, co-owned with Tom Buis; and ABC Nissan, where Larry Van Tuyl is headquartered.