Red McCombs Dealership Group Eyes New Franchises

The Red McCombs Automotive Group runs eight dealerships in Texas, but is seeking to expand beyond the Lone Star State.

“We’re actively looking for other dealership groups, even outside of Texas,” says Tony Rimas, group operations director for the San Antonio-based business.

It currently operates two Toyota and Scion stores, two Hyundai outlets and two Ford dealerships in southern Texas. McCombs’ Hyundai operations represent that brand’s largest sales volume in Texas. Another Hyundai store is in the works near the Texas-Mexico border.

Desirable brands the organization is eyeing include BMW, Nissan, VW, Honda, Toyota, Lexus, Ford, Chrysler, Jeep and Fiat, Rimas says.

His theory is that it’s easier to operate several stores in given market areas than a few single points strung across many miles. “You can more easily leverage new and used car-operations, auctions, even staff between the stores. It’s the way to go.” The group’s most recent acquisition was Gillespie Ford in 2007, now called McCombs Ford West, complementing its other Ford store in San Antonio. Buying an additional Ford dealership signaled the company's confidence in the domestic auto industry, say group executives.

Universal Toyota-Scion was acquired through a swap-trade deal for Lexus in the early 1990s. The move helped make Corolla the No.1 seller in Texas.

Universal Toyota ranks No.71 on the 2011 Ward’s Dealer 500 list, with total 2010 revenues of $123 million. The McCombs group is No.35 on the Ward’s Megadealer 100.

Marsha McCombs Shields oversees dealership group activities.

The company sold 11,976 new vehicles and 15,578 used units last year. It prides itself on its used-car sales. Founder Red McCombs proudly is referred to as “the used-car guru,” beginning as a dealer in the 1950s.

He went on not only to build a dealership group but also several other business ventures, including owning three professional sports teams, co-founding what became one of the world’s largest radio networks and landing on Forbes list of the 400 richest Americans.

Universal Toyota-Scion, occupying 25 acres (10 ha), is the largest McCombs facility, General Manager Darren Dortch says.

He joined the McCombs enterprise this year, calling it “a first-class operation in every way.” He previously worked with Lithia Motors as regional vice president, overseeing 16 Texas-New Mexico dealerships.

Customer retention and using customer-relationship management systems in sales and service are priorities for McCombs managers. The group is proud of its 55% customer-retention record in service, one of the highest for Toyota.

McCombs focuses on the Internet by mainstreaming it directly into sales and other customer-related processes. “Everything we do is tailored to the Internet,” Rimas says.

“McCombs has a spotless reputation, with strong community and civic ties,” Dortch says. “That’s an asset.”

The business school at the University of Texas was renamed the Red McCombs School of Business in recognition of a $50 million donation.

McCombs’ daughter, Marsha McCombs Shields, serves as dealer-operator and is involved in key decisions in running the dealerships. She is chairwoman of McCombs Enterprises and works with her father to provide direction and daily oversight of all McCombs operations.

“We take pride in providing a service to each of our customers,” she says. “Knowing they need transportation for work and family and that for many customers this is the largest purchase they make, our staff works hard to make the transaction easy, understandable, affordable and even fun.”

Company Profile: McCombs Automotive Group

Location: San Antonio, TX

Founder: Red McCombs; formerly owned Minnesota Vikings, Denver Nuggets and San Antonio Spurs; co-founded Clear Channel Communications one of the world’s largest radio networks.

Dealer Principal: Marsha McCombs Shields

Revenues (2010): $650.3 million

Vehicles Sold (2010): 27,554

Total group employees: 1,100

Ward’s Megadealer 100 Ranking: No.35