Lexus boosts its black-owned dealership ranks

Last year was not bad for Chatham Parkway Lexus. The year-old store near Savannah, GA, sold 479 units. Along with Chatham Parkway Toyota, which shares the 9-acre complex, the new enterprise earned almost $1 million.

On the face of it, that's no big deal. But Winston Pittman owns Chatham Parkway Lexus. He happens to be black. His store is one of six points that Lexus has awarded to African-Americans during the last three years.

When asked how he was able to open a $7-million Lexus store in Savannah of all places, Pittman nods towards a “factory” visitor, Irv Miller.

“He was very instrumental in all the Lexus points that we have now,” Pittman says of Miller.

The small but steady increase in black-owned Lexus stores started with a conversation over cigars and scotch in the lobby of Detroit's Atheneum Hotel during the 1999 North American International Auto Show. Miller had been vice president of sales and market representation at Lexus for about two years.

His impromptu discussion with Pittman, Ed Fitzpatrick, Steven Harrell and Sandy Woods centered on getting additional Lexus points for minorities.

At the time, Lexus had two black dealers out of 190 points. The stores had been awarded to Jim Kaiser, Lexus of Memphis; and Fitzpatrick, Lexus of Valley Lexus of Modesto (CA) through buy-sell deals, where Lexus exercised its right of first refusal.

“We (Lexus) had just started a complete analysis of our annual sales and market representation plan which would address the question of additional locations,” says Miller, now a group vice president at Toyota Motor Sales USA Inc. “At that meeting, I asked them to give us six months to finish our evaluation and see what opportunities would present themselves.”

Senior managers at Lexus and its parent, Toyota Motor Sales USA., Inc., knew that with the launch of the Lexus RX 300 in 1998 and the other new products that were in the pipeline there would be an opportunity to increase points and not dilute the sales of individual stores. Indeed, Lexus sales have shot up from 156,260 in 1998 to 223,983 last year.

In that span, five black-owned dealerships were added: Lexus of Huntsville (AL), principal Ellenae Fairhurst; Chatham Parkway Lexus; Lexus of Ann Arbor (MI), principal Sandy Woods; Lexus of South Atlanta (GA), principal Steve Harrell; and Lexus of Mishiwaka (IN), principal Perry Watson. Fitzpatrick broke ground on his second Lexus point, Coliseum Lexus of Oakland (CA) in March.

Toyota and Lexus plan to increase sales during the next five years, according to Miller.

“We can't do that without tapping every market opportunity possible,” he says. “That means being inclusive across the board: age, gender and race. You have to diversify.”

In other words, top management at Lexus and Toyota believe the ethnic makeup of their efforts — especially at the dealership level — must mirror the consumers who buy their products.

As it stands, Lexus has eight black-owned dealerships, three Hispanic-owned dealerships, five women dealer principals and one Asian-owned store out of 196 points.

Lexus uses the same three measurements for its minority dealers that it does for everyone else:

Pittman started 26 years ago at a Dodge dealership in Jackson, MS, where he went from salesman to manager to general manager. He opened his first store, a Chrysler dealership, in 1987 in Louisville, KY.

That one point has grown into Pittman Enterprises which includes the Lexus and Toyota stores along with Cardinal Dodge and a Dollar Rent-A-Car in Louisville, Bowling Green Imports (Mercedes-Benz and BMW) in Bowling Green, KY and Kings Nissan in Cincinnati, OH.

“When you get into his chair, you need to know what the hell's going on in your parts department,” says Miller now nodding towards Pittman. “You need to know what's happening in your sales department. You need to be able to identify if parts are going out the back door.”

When you get into Pittman's chair, Miller says Lexus expects him to repay a debt. Not to the company but to the community.

“What that means is I want to see people of color employed at this dealership as sales people,” says Miller. “I want to see them being trained to become service managers, parts managers and F&I managers. We can't leave them at the bottom rung of the ladder. They have to be given an opportunity, just as someone gave Winston the opportunity.”

Pittman says he wholeheartedly believes that's part of his mission. So does Fitzpatrick.

“We just formed the Toyota Lexus Minority Dealer Association, and one of the things we see as a goal is to bring young minorities into the business and provide them with an opportunity,” says Fitzpatrick. “If people had not said ‘yes’ to me, I'd still be teaching school back in Cleveland.”

There are 63 minority Lexus and Toyota dealers, says Fitzpatrick.

Although Miller wants to use his company's black dealers to create a talent pool for future minority dealers, he says minorities don't have to be dealers to make it in the car business.

“I have three salesmen who made over $100,000 last year,” says Fitzpatrick. “Managers make in excess of $100,000 (annually). Technicians make in the high $80s and $90s. You don't have to be a dealer to live and do well in this business.”

Toyota's 21st Century Diversity Strategy is a 10-year, $7.8 billion initiative to diversify its operations. Avenues for Advancement creates a retail management development program to help finance, support and mentor minority managers. The intent is to widen dealership management and ownership opportunities.

Announced last year as part of an agreement with Operation Rainbow/PUSH, Avenues for Advancement is the formal embodiment of a commitment made between like-minded people over cigars and scotch in a hotel lobby three years ago.

“I'm telling you like it is, this is what we do everyday,” says Miller. “Diversity matters and it is good business.”