The claims and rankings presented by Automotive News regarding the TOP 125 Dealers have left many questioning their validity. It is important to note that the study is sponsored by Dealer.com, which implies that Automotive News may not have compiled the statistics themselves. As someone involved in the automotive consulting field, I have analyzed over 500 dealers, including some of the largest groups in the country. Surprisingly, many of these highly successful and larger dealerships are not included in the Automotive News list.
One such dealership that caught my attention is Classic Chevrolet of Grapevine, which has held the position of the number one dealer in the nation for the past eight consecutive years. During my visit to their dealership, I witnessed them selling over 140 new Chevrolet vehicles in a single day, which was not even a record-breaking day for them. They not only excel in new car sales but have also earned the title of the number one volume GM parts dealer. Their parts department is ranked 76th in the nation, outperforming numerous other dealerships. In fact, Classic Chevrolet is the leading volume GM parts dealer among approximately 4,000 GM dealers in the United States. Their remarkable performance in used vehicle sales is another topic that deserves its own discussion.
It's clear that Classic Chevrolet of Grapevine, under the guidance of Mr. Tom Durant and Hagen Durant, is a genius operation. However, they have failed to make it onto the top dealers list, which raises doubts about the credibility of the rankings. And they are not alone. There are several other dealers and dealer groups that I personally know, and their operations are far superior to many dealerships on the list. However, it's not surprising that they are absent from the rankings. Some dealers prefer to keep a low profile and are not interested in disclosing their private information. Additionally, some may not have been informed to submit their data if they are not privileged clients of the vendor compiling the information. If all dealers participated, the results might have been different.
Considering the impact of such rankings on industry owners, executives, managers, and investors, it is essential for Automotive News to provide a clear disclaimer stating that the rankings are advertisements and not factual reports from AN. To maintain credibility as a news authority for the automotive industry, Automotive News should strive for unbiased reporting of news and statistics. Many dealer executives use these reports as benchmarks for their operations. However, a truly high-performing dealership's manager would aim to surpass and outperform these numbers, rather than merely meeting them. Therefore, these rankings could serve as a starting point for aspiring top performers.
It's crucial to remember that the list of top 125 dealers presented by Automotive News does not reflect the actual top dealers doing business in the USA. With more than 17,000 new car and truck dealerships and approximately 37,500 separate franchises, the rankings only represent a small fraction. Reading between the lines, it becomes evident that the presented information may not provide an accurate reflection of the industry.
Wholesale vehicle sales also need to be considered separately from retail sales. Taking wholesale units into account as performance indicators for a dealership or group is questionable, as high wholesale numbers can have a negative impact. Wholesale selling implies that a manager chooses not to recondition a vehicle and instead sells it at auction, allowing other dealers to buy and resell it at a higher rate of return. If wholesale units were considered a positive indicator, then Manheim Auction, which wholesales over 10 million units per year with revenues of over $50 billion, would be the number one dealer in the world. This illustrates the flawed reasoning behind using wholesale sales as a performance benchmark.
Another crucial aspect to consider is that selling more cars does not necessarily equate to profitability. Anyone can give away cars, and it is not a complex feat. Additionally, a group selling the highest number of cars does not automatically make them the top dealer, especially if their per-location sales, revenue, and profit are below average. For instance, the top-performing dealer group on the list, AutoNation Inc., sold 292,922 new units across its 228 rooftops, averaging only 107 units per rooftop per month. In contrast, Classic Chevrolet of Grapevine sells that many vehicles in a single day, not a month. Profitable dealerships across the country consistently sell more pre-owned units compared to new vehicles, generating significant profits. It is widely acknowledged in the industry that new vehicles do not yield substantial profits compared to unique and specially curated pre-owned vehicles.
Regarding the rankings, it's essential to view the performance of dealerships across their rooftops rather than considering the overall numbers for an entire group. Each rooftop's performance may vary significantly within a group, and lumping all the numbers together can be misleading. It's crucial to see the forest for the trees and assess performance at an individual rooftop level.
While the original report is freely available on the internet for download, it is important to be aware that some magazines may have vested interests in showcasing rankings or awards that benefit their affiliated vendors. Transparency and accuracy in reporting are critical, especially when financial decisions are based on such rankings. The automotive industry relies on Automotive News as a legitimate and respected source of information. However, trust should not be blindly placed in numbers coming solely from Automotive News.
To analyze the report, one can delve into the rankings, gains, and drops among the 125 dealers. For instance, Bommarito Automotive Group gained significant positions, ranking 6th within the group after being initially placed at 68th by Automotive News. Conversely, Bergstrom Automotive Group dropped 51 positions, ranking 118th according to my recalculations compared to the 67th position stated by Automotive News.
It is crucial to approach this information with caution and conduct thorough research before making any decisions. While I have taken care and interest in preparing these numbers, I encourage readers to verify and validate the information independently. This report should not be used to make financial decisions.
Disclaimer: The following analysis and opinions expressed in this document are based on my expertise and knowledge as an award-winning Auto Executive with over 30 years of industry management experience. They are intended for informational purposes only and should not be considered as financial or investment advice. The information provided is subjective and reflects my personal views and interpretations of the data available at the time of writing.
Readers are advised to conduct their own research, seek professional advice, and exercise their own judgment before making any financial or business decisions. The accuracy, completeness, and reliability of the information provided cannot be guaranteed. The automotive industry is dynamic and subject to constant change, and the rankings and claims discussed may have evolved since the time of this analysis.
Furthermore, it should be noted that the claims and rankings presented by Automotive News, as well as the methodology used to compile them, are beyond my control and verification. The inclusion or exclusion of specific dealerships or groups in the rankings may be influenced by various factors, including sponsorship relationships and voluntary participation. Therefore, the absence of certain dealerships or the rankings themselves should not be solely relied upon when evaluating the performance or success of automotive businesses.
Lastly, this document does not intend to defame or discredit any individual, dealership, or organization mentioned. The analysis provided is a subjective interpretation and does not reflect the views or opinions of any specific entity. Any similarities to actual dealerships or groups are coincidental and should not be misconstrued as intentional.
By reading this document, you acknowledge and agree that I, as the author (Rafi Hamid), shall not be held liable for any losses, damages, or inconveniences arising from the use of this information. You are solely responsible for your own actions and decisions based on the content presented here.
Please proceed with caution and use this analysis as one of many sources of information when evaluating the automotive industry and its rankings.
Rafi Hamid Award-winning Auto Executive with over 30 years of industry management experience.
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