I visited Newport Lexus in Newport Beach, Calif. last week. Four Chinese dealership executives were in town and wanted to learn about best practices for both new and used car sales. They couldn’t have picked a better dealership to visit.
Craig Whetter, president of the Dave Wilson Automotive Group, which owns Newport Lexus, gave us a personal tour. He was clearly extremely proud of the dealership, and it was easy to see why.
The ten-year old facility looks like it is brand new. That’s because the Dave Wilson Group didn’t skimp on materials when it was building the facility. So, for example, the imported German tiling in the service area – called clinker tile — not only looks great, it doesn’t chip when tools and heavy objects are dropped on it, and it is easy to clean. The Chinese executives were very impressed with the dealership. “Your investment really paid off,” said the top exec.
I was just as impressed with the Dave Wilson formula for determining how many employees each dealership needs, which is one employee for every $1 million in revenue. Since Newport Lexus sells and services luxury vehicles, thus bigger sales dollars, the ratio is even better. It did $185 million in sales in 2015 and has 141 associates.
When the Dave Wilson Group considers whether or not to acquire a dealership, it looks at how many employees the dealership has compared to revenue to help determine how efficiently the business is run. Smart, and clearly successful.
And while I’m on the topic of success, check out our dealer profile this week. Thomas Bies, president and co-founder of Elm Creek Autogroup, has had an astoundingly successful dealership management career. Now that he has his own group, Bies is applying that experience to grow Elm Creek. He’s still looking for a few more dealerships. Just so you know….
Also this week, frequent contributor Joe Aboyoun writes about the importance of a good parts and accessories inventory before you finalize a buy/sell agreement. Neglecting that detail can leave money on the table if you are the seller and cause you to pay for more inventory than necessary if you are the buyer.
And last but certainly not least, we have Transaction News.
Enjoy!
