Larry Morgan started out in the fixed ops world – he owned more than 600 Tires Plus stores. Morgan sold those stores to Bridgestone in the year 2000, hit golf balls for three days, and got bored, he tells Automotive Buy Sell Report. So, Morgan became a silent investor in a Honda and Volkswagen dealership in Florida.
“I knew hardly anything about the new car side” of the dealership business, says Morgan.
Twenty years later, he and his son run Morgan Automotive Group in Florida. The group is expanding quickly.
“A few years ago, we said, ‘hey, we like what we do, we are really good performers, we have a really good team of people, let’s pick it up a notch,’” says Morgan.
The group’s latest acquisition, in August, is the Brandon Hyundai and Brandon Mitsubishi franchises, both on one piece of real estate in Tampa. It is the group’s first Hyundai store. Morgan was friends with John Wendkos, the owner, for years.
“We would have lunch every quarter, I told him whenever he was ready to sell, I would be ready to buy,” says Morgan.
Relationships are the main way acquisitions come about for the Morgan Auto Group, he says. People know the group is in growth mode, and they know Larry Morgan from his years in the industry including a stint as chairman of the Florida Automobile Dealers Association. He was the TIME Dealer of the Year in 2009.
“We have a good reputation,” says Morgan. “We have never walked away from a deal, we have never traded a deal, we always close.”
The Morgan Auto Group includes 22 brands at 32 dealerships mainly in Florida with one in Missouri. Morgan is the chairman. His son, Brett, is CEO.
The group likes Florida. But, “we would entertain a platform if it was enough stores in a given market outside Florida (that) we could justify having a platform leader there,” says Morgan.
It operates five collision centers. All are profitable on a stand-alone basis, and all “contribute significantly to our parts business,” says Morgan.
They like the collision business, he says, but “it is a tough business. The insurance companies mistreat us. They pay us what they want to pay. (But) like any other business, if you run it properly, you can do well.”
A slowdown for a course correction
When Morgan Auto Group acquires a store, it generally keeps most of the staff as well as whomever is operating the store. “If they are doing halfway good a job we give them a chance,” says Morgan.
With “a little guidance” most people can do a better job, he says. If they don’t, “we always have a deep bench,” adds Morgan.
People are the most important aspect of a successful dealership, he says. Giving those people the right tools for success is also crucial, however. Morgan Auto offers training, good working conditions, and maintains good relationships with insurance companies, among other measures.
It also works hard to ensure its dealerships have all the right equipment. For example, when Ford switch to aluminum, it bought the special equipment needed to work on that metal, says Morgan.
Though it has bumped up its expansion speed, Morgan Auto Group did slow down for six months or so a year and a half ago, says Morgan. A new acquisition wasn’t performing as well as the group had anticipated, and they wanted to figure out why.
“It was more of our fault at the corporate level than the store level,” says Morgan. “We did not do a good job of directing those stores to do what we were projecting them to do.”
The group gave general rather than specific directions, and didn’t follow up, he says. It was not hard to determine what had gone wrong by looking at traffic flow and analyzing the financial statement.
“Most people know what to do, it is a matter of execution,” says Morgan.
As for all the speculation about the changing nature of car ownership and its impact on the dealership model, Morgan Auto Group is “not too worried about it,” says Morgan. “We think it is going to take a lot longer to happen than some of the soothsayers say. (And) we think we will be able to adapt.”
Morgan, 74, has no plans to retire. Last time he did that, he got into the dealership business.