Used-vehicle sales in 2022 for publicly listed Lithia Motors were challenging. The rate of increase in the average retail selling price slowed markedly in the fourth quarter and the decline in the average gross profit per used unit deepened.
Used retail sales in the fourth quarter were basically flat compared to the same quarter in 2021 while full-year sales rose only 0.9%.
The company’s executives put a positive spin on the numbers during the company’s fourth quarter earnings call.
The used market is …
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Roger Penske shared some good news about Penske Automotive Group’s used-only chain, CarShop, during the company’s fourth quarter and full-year 2022 earnings call last week. He noted that CarShop unit sales increased 12% to 71,242 units during 2022 and that revenue increased 16% to $1.7 billion.
He also shared some CarShop news that was not so great.
“However …
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Sonic Automotive said Wednesday it has acquired the Harley-Davidson store that is the home of the Sturgis Motorcycle Rally.
Black Hills Harley-Davidson, located Rapid City, S.D., hosts “The Rally at Exit 55” during the Sturgis event, which draws 500,000 enthusiasts each year.
“We are thrilled to welcome the team from Black Hills Harley-Davidson into the Sonic Automotive family,” Sonic CEO and chairman David Smith said in a news release.
“The team is deeply committed to the Harley-Davidson brand promise, providing a world-class guest experience, and fostering a strong teammate culture, which aligns with the values we uphold at Sonic Automotive,” Smith said.
Black Hills Harley-Davidson co-owners Al Rieman and Jim Burgess added: “At Black Hills Harley-Davidson, we have always understood that teamwork makes us unbeatable.
“Our culture values the power of teamwork, and it has allowed us to grow beyond what anyone could do individually. Joining the Sonic Automotive team will allow Black Hills Harley-Davidson and our teammates to grow, set new goals, and achieve even greater results than we could have ever imagined, and we’re excited to be on board,” they said.
In its new powersports division, Sonic also partners with such brands as Can-Am, Sea-Doo, Polaris, Kawasaki, Suzuki, Ducati, BMW, Honda, Indian Motorcycle and Yamaha.
Sonic’s powersports properties now includes 13 locations, following this purchase and the 2022 acquisitions of Mancuso Powersports in Houston and Horny Toad Harley-Davidson in Temple, Texas.
Sonic president Jeff Dyke said in the release, “This is a big day for Sonic Automotive. We are excited to add Black Hills Harley-Davidson to our powersports team and provide an exceptional experience to powersports enthusiasts with our diverse manufacturer portfolio.”
This dealer group news roundup includes an enhancement to the service drive at Leith as well as the philanthropy efforts by Jim Ellis.
The culmination of a more than two-yearlong construction boom at Leith Auto Park Wendell in North Carolina has ramped up the dealership’s commercial truck service business.
“We’ve added service bays, techs and advisors. We’ve expanded our service reception areas and customer lounge,” said Brad Smith, fixed operations director at Leith Auto Park Wendell.
“With our continued growth, we are focused on taking care of our customers, keeping them moving, with less waiting, and less down time for their vehicle,” Smith continued in a dealer group news release.
The recently completed second phase of construction brought improvements to the Leith Chrysler Dodge Jeep Ram service area with a larger parts department that allows for stocking more fast-moving, regular maintenance parts like brake pads, tires, belts, and fluids, aiding the dealership’s express service capability.
The Leith Auto Park Wendell service enhancements began with the completion of the Leith GMC heavy-duty truck shop in the winter of 2021. The new expansion increased Leith GMC’s service capacity by more than 75%.
Three new 18,000-pound lifts were added along with a heavy-duty alignment lift that allows for servicing larger commercial vehicles like box trucks, service body trucks, and tanker style trucks.
“Expanded commercial service with a quick turnaround is extremely important to commercial vehicle owners,” Smith said. “We began providing more services to our commercial customers in the GMC shop, and with the recently completed upgrades in our Ford and Ram shops, we can better take care of our commercial customers there as well.”
Leith Ford added four new service bays, which includes a new 12,000-pound drive-on rack to aid in servicing larger box trucks and commercial vehicles. The upgrades also include a new, large tire changer that allows Leith Auto Park Wendell to change truck wheels up to 24 inches in diameter.
Jim Ellis Automotive donates $65K to help fight pediatric cancer
With the support of customers, Jim Ellis Automotive Group closed out its sixth annual Holiday Giving Campaign with a $65,000 donation to the Aflac Cancer and Blood Disorders Center at Children’s Healthcare of Atlanta.
According to a news release, a portion of the profit for each new or used vehicle sold at all of the 20 Jim Ellis Automotive dealerships between Dec. 1 and Dec. 31 contributed to the donation.
Jim Ellis Automotive Group selects a different Atlanta-area charity to support through their annual holiday giving campaign. During the last five years, Jim Ellis Automotive has donated more than $250,000 to groups serving women and children in need across the Atlanta area from the holiday giving campaigns alone.
Established in 1995, the Aflac Cancer and Blood Disorders Center of Children’s Healthcare of Atlanta cares for more than 2,400 children with cancer and more than 5,800 children with blood disorders annually.
The Holiday Giving Campaign donation will be directed to the Family Support Team, a collection of 35 individuals who help provide for the emotional and spiritual needs of the patients in the form of child life, psychology, chaplaincy and social work positions.
“We are proud to partner with the Aflac Cancer and Blood Disorders Center at Children’s Healthcare of Atlanta,” Jim Ellis Automotive Group vice president Stacey Ellis Hodges said. “We hope our donation can give a child the gift of growing up.”
Sara Orton is development director for the Aflac Cancer and Blood Disorders Center.
“We are incredibly grateful to the Jim Ellis family for their long-standing commitment to the thousands of children cared for at Children’s and the Aflac Cancer and Blood Disorders Center,” Orton said. “Their support is invaluable as we continue to provide the best care for the kids of Georgia and beyond.”
Like most dealerships, Vaughan Automotive Management’s two Toyota stores have trouble hiring enough qualified people to work in the service departments.
Rather than poach them from other dealerships, dealer principal Shawn Vaughan decided to train his own. His internship program with local Texas schools has been a hugely successful way to recruit service department employees. But it doesn’t happen without a lot of effort.
“You have to be committed from the top down in your organization and, from a time perspective, to be involved in your school districts,” Shawn Vaughan, dealer principal of Vic Vaughan Toyota of Boerne and Mike Calvert Toyota in Houston, tells Auto Remarketing.
His dealerships have paid internship programs with the Boerne, Fredericksburg, and Comfort school districts for the Boerne store and with the Houston school district for the Houston store.
Vaughan takes the long view when it comes to recruiting service department staff. “Some of it is putting your money where your mouth is,” he says.
He offers six-month internships to high school students during which they can work at all the service department positions. Each intern has a “shadow” mentor.
Rotating through different positions not only familiarizes them with opportunities, it allows Vaughan to evaluate their work habits.
It has made the high schools extremely fertile recruiting grounds for his dealerships, says Vaughan and “blossomed into how we have mostly recruited in both our stores.”
Sixteen of the service department employees in Boerne came through the program and 26 in Houston are either working or in the process of being trained, he says.
“We have three graduates that are in the top five performance as service writers,” adds Vaughan.
Women are under-represented in dealership service departments and are a huge, poorly utilized, resource. Vaughan doesn’t specifically set out to recruit more women. The key to attracting more female candidates, he says, is creating the right kind of work environment.
“What is key for recruiting women is developing a culture for women to be successful in,” says Vaughan. “That means no locker room banter and a training program they can wrap their arms around and flexible work hours.”
His work with local high school students directly contributes to the success of his dealerships, says Vaughan.
“Our excellence in dealership operations 100% lies in our ability to recruit, train, and retain the very best people in the industry,” he says. “If we can’t do that, we are going to struggle at everything else.”
Velocity as used-car strategy
Those service department interns may be contributing to Vaughan’s success in the used department. The service lane is a source of used inventory and Vaughan Automotive is the largest used car retailer in his 20 Groups, says Vaughan.
Velocity is the key, he says. “The car has to be gone by 30 days. Regardless of what, we have to sell it. The car must move.”
Proper pricing is crucial, says Vaughan. “People that were left with inventory they couldn’t sell because the price was too high — (the actual cause) was really that they didn’t want to price the car according to market,” he says.
His dealerships also take a “pragmatic” approach when it comes to stocking used inventory, says Vaughan. Even in truck-crazy Texas, if the price of gas spikes he looks to stock more fuel-efficient models
The service lane, auctions and trade-ins are his main sources of used inventory, says John Putman, Vaughan Automotive Management’s used-car platform director.
Many dealerships have struggled to obtain enough inventory this last year but “we didn’t slow down buying cars,” says Putman.
Most auctions have beefed up their digital platforms since COVID, says Putman, and he is a fan.
Online is “a great avenue for acquiring inventory,” he says. “You can be in so many places at once. Last week I was online shopping for cars, I had five different lanes at three different auctions in two different states.”
A trend Vaughan and Putman are seeing in the used market is more buying hesitance at both the wholesale and retail level because of rising interest rates. Both anticipate wholesale prices beginning to come down as fleet sales increase, however
According to Cox Automotive, in November combined sales into large rental, commercial, and government fleets were up nearly 55% compared to the same month in 2021. It was the fifth month of double-digit year-on-year increases. Sales to rental fleets were up over 126%.
Rental car companies have been driving auction lane prices for the last two years, says Putman. “It doesn’t matter what they pay for the car, they are going to rent it. There is no consideration of price.”
The increase in fleet sales will result in a drop in wholesale prices, predicts Vaughan.
“The rental market is one of, if not the largest, indicators of what wholesale values are going to do going into 2023,” he says. “As rental agencies are able to purchase new car inventory from OEMs, that will get the rental car agencies off the auction lanes. That nugget is one of the greatest shifts we will see going into 2023.”
Group 1 Automotive said Tuesday it has hired a chief legal officer as well as a chief marketing officer.
Joining the company as CLO and senior vice president is Gillian Hobson, who comes over from Vinson & Elkins in Houston. She was part of the firm’s management committee and was Group 1’s primary relationship attorney.
Hobson takes over for Darryl Burman, who is retiring as Group 1’s senior vice president and general counsel.
Meanwhile, Kimberly Barta is the first-ever chief marketing officer at Group 1. Her background includes time in marketing leadership roles at Nike’s innovation lab, SOREL and Dr. Martens.
“We are privileged to welcome these two accomplished executives to the Group 1 leadership team. Gillian and Kimberly are proven professionals who bring skill sets to Group 1 that will help drive our strategic growth and customer-centric initiatives,” Group 1 president and CEO Daryl Kenningham said in a news release.
“We’d also like to thank Darryl Burman for his 16 years of service to the company. Darryl was instrumental in supporting much of Group 1's expansion during that time and we wish him the best in his retirement,” Kenningham said.
These moves continue a transition in Group 1's leadership. Kenningham stepped in to the CEO role on Jan. 1, following the retirement of Earl Hesterberg from that position, a move first announced in August.
Michigan-based Zeigler Auto Group previously announced it was sponsoring a race car for the upcoming NASCAR season.
Last week, North Carolina-based LeithCars.com said it’s putting its name on a race track again by continuing its commitment as the official automotive dealership partner of VIRginia International Raceway (VIR).
The continuing partnership comes with opportunities for both Leith employees and customers.
Last year, Leith Techs on Track gave Leith automotive service employees the chance to learn and drive their cars on VIR’s courses. The event was such a success that follow-up event already has been planned.
Also, customers who purchase a new or used vehicle from any Leith dealership can get complimentary track delivery at VIR, where they can drive their car on the track with seasoned VIR professionals.
Leith COO Danny Williams sees the partnership as a win-win.
“Our ongoing partnership with VIR offers us unique experiences not only for our customers, but also for our employees who work hard,” Williams said in a news release.
VIR opened in 1957 as one of the country’s first permanent road racing circuits, offering professional and amateur auto and motorcycle racing, as well as a wide range of track events. VIR was recently chosen as one of Car and Driver’s top six road courses in the nation, drawing tens of thousands of spectators each year.
“We’re proud to continue our partnership with LeithCars.com as they mirror many of the same values we do. We both put customers first, always try to provide the best value, and care deeply about our employees,” VIR co-owner and CEO Connie Nyholm said. “This partnership has provided great benefits for all parties and really, we’re just getting started.”
To learn more about LeithCars.com at VIR, including upcoming complimentary track delivery dates, event schedule, and a track-day checklist, go to https://www.leithcars.com/vir-now.html.
The team behind Florida’s Off Lease Only group of used-car dealerships has launched as sister brand in the Houston area.
CarSquad, which has opened in Katy, Texas, gives shoppers the option of buying, selling or trading used cars in-person or online and offers from guidance from experts in making car-shopping decisions.
In a news release, the company said CarSquad is designed “less like a used-car dealership and more like a personalized, informative and stress-free experience.”
The 21,000-square-foot store includes kiosks on the sales floor for consumers to browse available inventory.
“CarSquad perfectly symbolizes who we are. We rally a team of experts around each of our customers to tailor their experience and guide them through the car selection process,” said Lee Wilson, CEO of CarSquad and Off Lease Only, in a news release. “We want our customers to feel confident when navigating the process and then have peace of mind when they drive off the lot.”
Wilson added: “CarSquad exists to empower every driver on their journey to finding their ideal next set of wheels. We want each customer to feel confident knowing they made the right decision and think of us each time they want to buy, sell or trade their next vehicle.”
This dealer group news roundup includes a Blue Oval franchise store acquisition along with a philanthropic move during one of the recent college football bowl games.
Carousel Motor Group, which includes dealerships serving the Twin Cities region, announced on Friday that it has acquired Hudson Ford, which according to a news release is the No. 1-selling Ford dealership in Wisconsin for the past five years.
Meanwhile, the Ed Morse Automotive Group used its position as the official automotive partner of the Lockheed Martin Armed Forces Bowl played in December to give away a new truck to a member of the military who received a Purple Heart.
The acquisition of the Hudson Ford dealership, located at 2020 Crest View Drive in Hudson, Wisc., near Interstate 94 and Carmichael Road, marks Carousel Motor Group’s first Ford dealership in its portfolio as well as entry into the Wisconsin market.
Carousel now operates nine franchised dealerships, along with Carousel Online, a direct-to-consumer pre-owned automotive ecommerce site. Carousel also has franchises representing Porsche, Ferrari, Chrysler/Dodge/Jeep/Ram, Audi, BMW, and Chevrolet.
“We are not only privileged to represent the Ford brand, but to continue building on Hudson Ford’s exceptional reputation in the community. This is a true testament to the highly talented team who have built such a great culture,” Carousel Motor Group CEO and president Chase Hawkins said in the news release.
“This acquisition is a natural fit within our portfolio of reputable brands and reinforces our plan for continued strategic growth and value creation,” Hawkins continued. “We truly appreciate Mark Swelland, CEO and president of Hudson Ford, his business partner Gary Embretson and Jonathan Nissly, COO and GM, for both their leadership in making this such a fantastic dealership and for entrusting us with its future.”
Hudson Ford sells both new and pre-owned vehicles in a recently remodeled facility. The dealership also includes an Abra full-service collision center that is aluminum certified and an on-site detail center, servicing drivers throughout St. Croix County and eastern Minnesota.
“Carousel Motor Group mirrors the values of Hudson Ford. They really care about their employees and customers, and we are excited to have them guide this organization to the next level,” Swelland said.
Purple Heart recipient gets new truck at the Armed Forces Bowl
At halftime of the Lockheed Martin Armed Forces Bowl last month, Teddy Morse, chairman and CEO of Ed Morse Automotive Group, teamed up with Santa Claus to randomly pick a name out of a hat of almost 100 Purple Heart recipients.
According to another news release, the lucky winner was Gil Brown of Northlake, Texas. He was handed the keys to a 2022 RAM 1500 Rebel in Hydro Blue. The MSRP for this new truck was $65,905.
“I couldn’t believe they called out my name and was in total shock. It was like winning the lottery and certainly didn’t expect this. I look forward to selling my old truck, getting rid of the monthly payments and knowing that this truck will likely be my last,” Brown said. “I am so appreciative of Teddy Morse and his Freedom dealership team for their unwavering support for veterans.”
Brown earned the Purple Heart when he was wounded on Jan. 9, 1969 in Vietnam. Brown was an infantryman serving in the Ninth Infantry Division in the Mekong Delta. During a night operation in the Plain of Reeds on the Cambodian border, Brown’s patrol air cushion vehicle hit a mine and was decimated. He spent six weeks in the hospital and then rejoined his unit.
Brown has given back by serving as a mentor for the Veterans Treatment Court Program in Denton County.
“From its inception over 75 years ago, our company has proudly supported veteran and military organizations. Not only was it exciting to watch Air Force win the Armed Forces Bowl, but a true honor to meet so many inspiring veterans,” Morse said. “We were so proud to hand the new truck keys to Gil, a true hero and deserving of our admiration.”
The was held in December at the Amon G. Carter Stadium in Fort Worth, Texas and aired on ESPN. It was also one of the coldest bowl games ever with a wind chill of minus-1 degree.
Another example of the racing and retailing worlds connecting surfaced on Monday.
Zeigler Auto Group will serve as primary sponsor onboard Josh Bilicki’s new No. 78 Chevrolet Camaro for Live Fast Motorsports during the 2023 NASCAR Cup Series Season.
As the youngest team in NASCAR according to a news release, Live Fast Motorsports welcomes Bilicki and Zeigler Auto Group in a new partnership. The Zeigler.com Chevy Camaro will make its official debut at Circuit of the Americas on March 26.
“We had a great season last year with Josh, and we are excited to partner with Live Fast Motorsports for 2023. Having our new team onboard gives us a fresh start on the track with owners that are focused on performing among the best at each race,” Zeigler Auto Group president and owner Aaron Zeigler said in the news release.
With Midwestern roots across Michigan, Indiana and Wisconsin as well as in Chicago, Zeigler Auto Group aligned with Bilicki — a Wisconsin-based driver — and Ohio native Matt Tifft, who is part owner of Live Fast Motorsports with BJ McLeod.
McLeod looks forward to working with Bilicki again, as Bilicki formerly raced with McLeod’s NASCAR Xfinity Series team.
Looking forward to 2023, Bilicki will pilot the Zeigler-sponsored No. 78 Camaro at multiple races. A major highlight will be racing at the inaugural NASCAR Cup Series Race at the Chicago Street Course during Fourth of July weekend.
Other notable stops for the team will be the FireKeepers Casino 400 at the Michigan International Speedway on Aug. 6 and the Verizon 200 at the historic Indianapolis Motor Speedway the following weekend.
Last year, Bilicki drove the Zeigler.com-sponsored Chevrolet, earning a top 10 finish at Daytona and scoring a top 20 finish at Atlanta Motor Speedway. Other highlights for Bilicki include a top 10 finish at the 2021 Coke Zero Sugar 400 at Daytona, 72 starts in the NASCAR Xfinity Series and nine in the NASCAR Craftsman Truck Series.
Bilicki is currently the only driver from Wisconsin competing in the NASCAR Cup Series.
“I am so happy to have the opportunity to join Live Fast Motorsports for the 2023 season and to once again represent the Zeigler Auto Group. The Zeigler team has become like family to me and I have driven for BJ McLeod in the past in the NASCAR Xfinity Series, so this felt like a very natural fit for all parties. I’m excited and thankful for the opportunity and can’t wait to get to work,” Bilicki said.
