NO ADS OR USED-CAR RETAIL? NO SWEAT

TROY, MI - They don't advertise, retail any used vehicles or have a body shop.

But they do all the other things so efficiently, Somerset Pontiac-GMC in suburban Detroit keeps rising on the Ward Dealer Business 500, in 1999 surpassing the $100 million mark in total revenues for the first time.

"After 25 years in business at the same location, integrity has become our hallmark for customer and employee relations," says president and co-owner John P. (Jack) Fowler.

"Being at the entrance to the Troy Motor Mall helps, of course, but the main value we offer our customers is the knowledge that Somerset is a clean and friendly place with top-notch employees totally dedicated to their needs."

Housing 14 dealerships and 20 brands in a fast-growing upper middle-class suburb, the Troy Motor Mall was one of the dealer world's first complexes of its kind.

Mr. Fowler, 61, had learned the trade with such Detroit dealer institutions as Al Long, a former Ford dealer, and Marvin Tamaroff, a veteran Buick-Honda-Nissan dealer, and he joined with Pontiac, MI, dealer John B. McMullen in 1975 to acquire Frank Audette's Pontiac-GMC store in the Troy location.

"GM made Frank sell the Pontiac-GMC store because he had a Cadillac franchise (now in West Bloomfield, MI). They prohibited one owner from having two GM stores in the same market," Mr. Fowler recalls. "Can you imagine them doing that now?"

To maintain a high-volume and high-profits operation in what he describes as an "overdealered" market containing 21 Pontiac franchises, Mr. Fowler 14 years ago dispensed with used-unit retailing and introduced a wholesale-only system under a longtime associate, used-car manager Lysle Basinger.

Every night, the 58-year-old Mr. Basinger faxes to a data base of about 250 dealers in eight Midwestern states a list of that day's trade-ins and off-lease turn-ins, priced from guidebooks for immediate delivery. Highest bidders get the nod.

The next morning, Mr. Basinger receives back acceptances and when deals are approved, the buying dealers send their jockeys to pick up the vehicles and drop off checks.

In 1999, Somerset wholesaled 1,490 used vehicles that way and so far this year, through mid-April, 288 have been turned. Gross profits average $400 per vehicle, with reconditioning costs about $350.

"The wholesale-only system relieves us of a lot of headaches associated with used-car retail," says Mr. Fowler.

On April. 19, Mr. Basinger sold a "loaded" '97 Grand Am with moon roof and 16-inch wheels for $9,500; a "loaded" '96 Oldsmobile 88 for $5,000, and an '87 Chrysler LeBaron for $471.

On the next day's list of used vehicles up for bid were a '98 Cadillac Catera went for $18,100; a '98 Pontiac Trans Sport van for $16,300, and a '98 Bonneville for $13,350.

Somerset's employee count for a store which last year delivered 5,027 units - the 1,490 wholesaled and 3,537 new - has stabilized at 87, including 17 in vehicle sales.

"We believe in keeping our ranks lean and their remuneration high, with dedicated Pontiac and GMC sales staffs in separate renovated showrooms," says Mr. Fowler.

"Last year, our salespersons earned between $75,000 and $125,000, possibly the highest for a total sales force anywhere, and that has eliminated what so many metro dealers face in job-jumping."

A 50% commission is paid sales staffers beyond a minimum "pack" on each vehicle.

Situated near GM's world headquarters, Somerset benefits from a 63% sales rate to corporation employees and "their first, second and third cousins," says Mr. Fowler.

That undeniably makes the selling challenge a bit easier. But Mr. Fowler notes that the abundance of GM dealers in southeastern Michigan makes it "doubly important that we take nothing for granted and run the best service and customer relations facility as if we were hundreds of miles from any Pontiac or GMC facility."

Advertising, he contends, is wasted in a market filled with dealers hawking prices rather than reputations, and he believes the Internet will "primarily serve as another advertising tool but not much else."

He adds, "But the Internet will keep shoppers better-informed and we're certainly not afraid of that."

As for F&I, banks offer higher discounts than GMAC, but Mr. Fowler likes the "consistency" of a single provider tied to the factory.

GM's new vehicle ordering system "still needs a lot of tweaking so sold-order vehicles are here on time and with the equipment promised," says Mr. Fowler. "Customers deserve no less."

The red-and-white Pontiac and GMC showrooms, including a closed service entrance way, replaced an aging cedar shingle exterior last year, when the separate GMC showroom was created.

The Fowler-McMullen duo experienced a pleasant encounter with No. 1 megadealer AutoNation Inc. early in 1999 when they received "cash offers we couldn't refuse," says Mr. Fowler, for Sunset Pontiac-GMC stores in Clearwater and Port Richey, FL.