Top 150 Dealership Groups supplement - S3

Dealers add, shed stores in topsy-turvy year
rause Auto Group is on the hunt to
buy underperforming stores. And
the growth the dealership group has
realized from the strategy vaulted it
up Automotive News' annual list of the top 150
dealership groups based in the U.S.
Krause, of Alpharetta, Ga., made the biggest
leap on the 2020 list, jumping 46 spots to No.
94.
" We've been in acquisition mode for
probably two years now, " said Shane Taylor,
Krause's director of operations in North
Atlanta. " We're starting to expand outside of
just the North Atlanta market. "
In 2020, that included acquiring three stores
- a Mercedes-Benz dealership in Duluth,
Ga., plus Hyundai stores in Cumming, Ga.,
and Venus, Fla. Group sales rose to 9,755 new
vehicles in 2020, compared with 6,947 in 2019.
Net profits rose 20 percent at most stores,
Taylor said, and operational efficiency also
increased.
" The biggest point in our growth right now is
just acquiring new stores and fixing them, "
Taylor said.

"

Big movers
Krause was one of 18 dealership groups that
rose on the list by 10 places or more. That
improvement happened in a year in which the
business of auto retailing started strong, took
a dive at the beginning of the coronavirus
pandemic and then swiftly recovered. During
that recovery period, many dealers resumed
store acquisition activity that had mostly
stopped in the spring.
Lately, Krause has invested a lot of money in
buying stores that represent Hyundai, Taylor
said.
He highlighted the brand's accomplishment
in avoiding the brunt of the global shortage of
microchips that has weighed on some
automakers' production, and subsequently,
on dealership inventory.
" It's just a great franchise and company to
be a part of right now, " he said. " They're
growing products so much better, and they're
releasing new products properly. It's just been

Top 150 Dealership Groups-2021-FINAL.indd 3

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David Muller

dmuller@crain.com

" We're taking care of
customers, we're getting
return customers, and we're
just kind of growing our
business the right way. "
Charlie Gilchrist, Gilchrist Automotive

Taylor: " We've been in acquisition mode. "

Wilson: " Toyota store made a big difference. "

easy to deal with them. "
Gilchrist Automotive, of Hudson Oaks,
Texas, is another group that made a big jump
in 2020, climbing 24 spots to No. 108. It sold
8,530 new vehicles last year, compared with
7,444 in 2019.
Dealer principal Charlie Gilchrist said the
group bought a Chevrolet-Cadillac store in
Terrell, Texas, near the end of 2019. That
helped volume last year, but it was not the sole
reason for the group's rise, Gilchrist said.
" The real factor, I think, is we actually built
two new dealership facilities: one for our Ford
store and one for our Chrysler-Dodge-JeepRam store, " Gilchrist said.
" And just the new facilities, the expanded
service area, the ability to take care of our
customers, actually increased our new sales
volume. "
In addition to those new facilities, both in
Terrell, the dealership group is " maturing, "
Gilchrist said, explaining that stores it bought
in recent years now have the retailer's people
and processes in place.
" We're taking care of customers, we're

getting return customers, and we're just kind
of growing our business the right way, " he
said.
Other big gainers on the list include
Swickard Auto Group, up 45 spots to No. 91,
and Kunes Country Auto Group, which
climbed 35 spots to No. 114.

Top 10
The top five dealership groups in 2019
maintained their positions for 2020 -
AutoNation Inc., Penske Automotive Group
Inc., Lithia Motors Inc., Group 1 Automotive
Inc. and Hendrick Automotive Group, in that
order.
Asbury Automotive Group Inc. and Sonic
Automotive Inc. swapped places, with Asbury
rising to No. 6 and Sonic dipping to No. 7.
Larry H. Miller stayed at No. 8. Ken Garff
Automotive Group moved up a spot to No. 9,
and David Wilson Automotive Group moved
up two spots to No. 10. Staluppi Auto Group
dropped out of the top 10, falling from No. 9 to
No. 12.
David Wilson said he added a new store last

spring: Claremont Toyota in Southern
California.
The group's new-vehicle sales dropped very
slightly, by less than 500 vehicles. But overall
sales increased, even without the benefit of the
new store, Wilson said.
" Same-store sales were up 5 percent in
volume, " he said. " We had a terrific year. And
then adding that Claremont Toyota store
made a big difference. "
Nineteen dealership groups tumbled 10
places or more, led by Reedman-Toll Auto
Group, which fell 47 spots to No. 139. Other
retailers that fell by that much include
Chapman Auto Group, Island Auto Group,
Kelly Automotive Group and AutoFair
Automotive Group.
In some cases, the declines involved
shedding stores. Kelly Automotive of Danvers,
Mass., sold a Chrysler-Dodge-Jeep-Ram store
in Methuen, Mass., in 2019 and went without
that store's volume for a full year in 2020,
dealer principal Brian Kelly said.
Otherwise, sales have been brisk since
business rebounded late last spring, Kelly
said. Inventory is lower but, like for many
dealers, gross profits have been high.
Those high grosses, Kelly said, will last as
long as the factories build to demand.
" The minute they start chasing market share
and you have an oversupply, then the grosses
are going to start coming down, " he said.
If automakers and dealers can more
efficiently manage inventory, profits can stay
high and less will have to be spent on
incentives and advertising, he said.
" That's a better model for doing business, "
Kelly said. " I think it's better for the factory.
It's better for the dealers, and it's better for the
customer. " n

3/30/21 1:32 PM
Top 150 Dealership Groups supplement

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