Sheehy Auto Stores has launched its 20th annual Sheehy 8000 sales event, a three-week community-wide effort to raise funds for the American Heart Association, the group announced on Friday.
Throughout the rest of the month, each of Sheehy Auto's dealerships throughout Washington, D.C.; Richmond, Va.; and Baltimore will host a variety of initiatives in support of the fundraiser before it wraps up on July 5.
"This year is a milestone for us as we continue our mission to raise awareness and funds for a cause that is close to many of our hearts," Sheehy Auto president Vince Sheehy said in a news release.
"We are thankful for our customers, communities and team members who rally behind this effort, making each year's campaign more successful than the last."
Sheehy Auto said this year’s campaign includes healthy cooking demonstrations, blood pressure screenings and CPR training for employees and the community across all of its locations.
"The support of Sheehy Auto Stores has allowed us to make a considerable impact on the health of our communities in the region," American Heart Association vice president of marketing Michelle Nostheide said. "We appreciate the generosity of their team members, customers and vendors, and their efforts towards workplace wellness. Together, we can lessen the burden and loss heart disease and stroke cause for so many families."
Last year's Sheehy 7000 campaign raised $225,000 for the American Heart Association, according to Sheehy.
Additionally, the dealer group said it has been a several year sponsor of the charity’s National Walking Day, which was held last month at Springfield Town Center in Virginia. Each of Sheehy's dealerships also hosted individual step challenges among employees on the day of the walk.
Sheehy Auto said it has raised a total of more than $40 million for community and non-profit organizations since it was founded in 1966.
Along with increasing its common stock share repurchase authorization, Group 1 Automotive on Friday announced that Stephen Quinn has been elected by its board to serve as non-executive chairman of its board of directors.
Group 1 indicated Quinn has served as a director of the company since May 2002, and currently serves on the board of directors, the audit committee and the risk oversight committee of Zions Bancorporation. Quinn has replaced John Adams, whose tenure as chair spanned 12 years.
The dealer group added Adams will continue as a director and now serve as chairman of the company's finance/risk management (FRM) Committee. Adams has been a director of the company since November 1999.
“We would like to thank John for serving as non-executive chairman for the past decade, and for continuing on with our board as FRM Committee chair. John’s insight and experience with capital allocation has been integral to the company for the past 18 years," said Earl Hesterberg, Group 1's president and chief executive officer.
“We now welcome Steve to the role of non-executive chairman and believe his extensive background in corporate finance and tremendous experience in assessing business strategies and risks make him a great asset as the new chairman,” Hesterberg continued in a news release.
And in other company news also shared on Friday, Group 1 noted that its board of directors increased the company's common stock share repurchase authorization to $75.0 million.
The dealer group explained purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions.
The company expects that any repurchase of shares will be funded by cash from operations. Repurchased shares will be held in treasury.
Group 1's board of directors also declared a cash dividend of $0.24 per share for the first quarter of 2017. The dividend will be payable on June 15 to stockholders of record on June 1.
dealerIQ announced that it has released its online trade appraisal platform tradeIQ, which is designed to produce increased user engagement on dealer's websites.
The auto dealer software provider said by maximizing user engagement via the newly introduced platform, dealers can expect less abandonment and higher conversion, which leads to more website visitors into the store.
"The online trade valuation software industry has for years refused to evolve to keep up-to-date with current web engagement standards," dealerIQ co-founder Aaron Haimovitz said in a news release. "As a result, car dealers have had no alternative but to use dated technology on their website, driving high abandonment of the visitors they so dearly pay for."
dealerIQ said tradeIQ maximizes the conversion of website visitors to leads by offering a modern interface that also retains each dealer's unique brand.
"Existing trade solutions require visitors to complete lengthy forms resulting in high website abandonment. tradeIQ was designed from the ground up to disrupt the trade appraisal landscape," dealerIQ said.
Through an easy-to-use wizard, the new platform presents visitors with engaging information such as service recall information, estimated credit score and vehicle affordability.
Additionally, dealerIQ said tradeIQ can be easily embedded into a dealer's existing website and designed to integrate smoothly with the brand of a dealer that consumers have come to know.
"Dealers have been held ransom and have come to expect high website abandonment," Haimovitz added. "tradeIQ aims to change the way trade appraisal solutions should work for both dealers and potential customers."
Reynolds and Reynolds in the U.K. announced that it has expanded its suite of retailing tools for dealers.
"The customer-dealer relationship continues to change," Reynolds U.K. Automotive managing director Adele Feeney said in a news release. "Over the past several years, we have expanded our suite of retailing tools for dealers. These tools are helping dealers improve operating performance and provide a more engaging and efficient customer experience."
Most notable among the company’s latest set of solution additions is its new Contact Advantage tool.
Contact Advantage provides dealerships and OEMs with a comprehensive tool that manages complete sales cycles and allows them "to take their customers through the entire sales process – from model selection, color and specification configuration, pricing and order forms – all in one, simple-to-use, interactive process," Reynolds U.K. said.
According to Feeney, the new tool is available to all dealers, whether or not they use the Reynolds dealership management system.
"We believe Contact Advantage is the premier showroom CRM solution for keeping track of dealership leads and maximizing sales potential," Feeney added.
Other new retailing tools Reynolds U.K. has also recently introduced include Aptus Websites, Reynolds Integrated Telephone System (RITS) and iMakeNews.
Aptus Websites, a DMS-neutral website platform, allows dealers to connect with consumers at any time and on any device.
RITS, a dealership-wide, customer experience management system combines phone features with dealer's instant customer data from the DMS in order to create more effective phone conversations with consumers, according to Reynolds U.K.
iMakeNews is a digital newsletter that is designed to build customer loyalty and retail action via engaging content. The new tool also delivers unique ROI metrics which aim to help dealers understand consumers’ current buying decisions so they can influence their buying decisions in the future.
"For dealers, customer service has never been as important as it is now," Feeney said. "The customer now initially goes to a dealer's website before walking into the showroom armed with information and knowing what the competition is offering. Therefore, managing the entire sales process to create a rewarding customer experience at every touch point inside and outside the four walls of the dealership is becoming a necessity, not a luxury."
For more information about each of the retailing tools now offered by Reynolds U.K., visit www.reyrey.co.uk/DMS.
On Monday, LotLinx announced that it named a senior vice president of channel strategy to lead major initiatives aimed at expanding the company’s presence in the car dealer market.
Chosen for the newly created position is Mark Conner, who most recently managed a team of 60 marketers for Lithia Motors.
“Under Mark's long and skillful leadership as assistant vice president of marketing, Lithia grew to be the highest performing publicly traded dealership group in the U.S.,” LotLinx founder Len Short said in a news release.
“I am confident Mark will be a tremendous asset toward the growth of our award-winning product suite of technologies. He is an auto marketing maven, bringing a deep knowledge and passion for the retail car business that will add significantly to our ‘dealer-first’ operating mission.”
At Lithia Motors, Conner’s leadership significantly influenced the group’s marketing approach, and he played an integral role in doubling its store footprint over the past seven years, LotLinx said.
In his new role, Conner has been tasked with leading all of LotLinx’s efforts to serve larger dealer groups.
LotLinx said Conner brings expertise in understanding how to scale best practices across a multi-rooftop dealer group, as well as an in-depth understanding of how car dealers drive ROI.
Asbury Automotive Group named its new chief financial officer late Friday afternoon.
Chosen for the role of senior vice president and CFO is Sean Goodman, who comes to Asbury from Unifi, a company in the textile industry.
He will join Asbury on July 5, replacing Keith Style, who was set to step down on March 7 to accept the position of president and CFO of a privately owned company.
“Sean brings a wealth of financial knowledge with a proven track record to his new position. He will be responsible for providing leadership to the finance and accounting functions while also continuing the development of our shared services initiatives,” Asbury president and chief executive officer Craig Monaghan said in a news release.
“I am thrilled about Sean joining our team and am certain that his contributions will lead to further success for our organization,” Monaghan said.
Goodman has been VP, CFO and chief accounting officer at Unifi since January 2016.
His background also includes positions with Toshiba Corp. subsidiary Landis+Gyr, Home Depot, Morgan Stanley and Deloitte & Touche.
Dealers often overestimate the trust car shoppers have in them and customers sometimes know more than the salesperson, according to MAXDigital’s recently released strategic dealer research study on the subject of trust and transparency in the digital age.
MAXDigital surveyed U.S. dealers during the 2017 National Automobile Dealers Association Convention and Expo.
Almost 70 percent of dealers said their customers have a high level of trust in their salespeople, while a December 2016 Gallup poll showed that just 9 percent of consumers have a high level of trust in car salespeople, according to MAXDigital.
“This research highlights the need for dealers to recognize that their sales processes may no longer match customer expectations or pre-conceived notions,” MAXDigital chief executive officer Steve Fitzgerald said in a news release.
“Consumer buying habits have changed and it appears that many dealers haven’t addressed the need to become product experts and to sell based on quality and value, instead of price.”
Interestingly, 61 percent of respondents said customers either “sometimes”, “most of the time” or “always know” more about a vehicle they are considering than the sales team.
Eight out of 10 dealers told MAXDigital that either “most of the time” or “always,” customers arrive after having thoroughly researched their purchase options.
The automotive industry cloud-based software provider said its survey suggests a need for dealers and their sales teams to become product experts.
MAXDigital said roughly 400 U.S. dealers completed the survey in January, before and during the 2017 NADA Convention.
For MAXDigital’s full report and other findings, visit www.maxdigital.com/trust.
Asbury Automotive Group chief executive Craig Monaghan doesn’t downplay the impact that swelling supply and off-lease volume has on pricing in the used-car market.
That said, he’s not hitting the panic button, instead treating the pre-owned sector as a “trading business” and leaning on fast turns.
“We think that’s going to create some pressure on used-car prices; I think that’s inevitable,” Monaghan said of the used-car supply dynamics spurred by off-lease volumes.
“But we see it as a trading business. We try to be in and out of these cars in 30 to 35 days,” he said, speaking during the retailer’s quarterly earnings conference call last week
And then it's on to the next one.
“If used-car valuations fall, that means we’ll buy them cheaper, we’ll recondition them and then we’ll sell them at a lower price. But we’re just trying to make a spread. Try to make our $1,500-1,600 on a transaction and then move on and get the next one done,” Monaghan said.
“So for us, it’s really about turn. It’s about velocity of moving that inventory through the stores. And as long as the market price for a vehicle goes up slowly or goes down slowly, as long as there’s no major or dramatic shifts in valuations, we’ll manage through this fine,” Monaghan said. “We deal with this on a regular basis anyhow because used cars happen to be a very seasonal business. We see values fall at the end of the year, and then values pick up again in the spring.”
Granted, some folks come back when the lease is done and they’re under water, Asbury’s Dan Clara confirmed to an analyst during the Q&A portion of the call. But the automakers will often work with Asbury, appraising the vehicle and putting a market value on it so that the retailer can buy it if the consumer decides not to.
“It’s good support from our manufacturer partners and it is also allowing us to feed our used-vehicle inventory and then turn it into a certified pre-owned, which as I mentioned earlier, our CPO growth was very healthy in Q1,” said Clara, a vice president with the company.
In fact, same-store certified pre-owned sales in the first quarter were up 13 percent year-over-year.
Clara said that while the percentage of off-lease cars it acquires has remained steady, there is a higher volume hitting the dealerships.
“But we have always been aggressive at buying those cars in the past, and we will continue to do so,” he said.
In the first quarter, Asbury averaged 85 used unit sales per month at its store. That beats 80 monthly sales for full-year 2015 and 2016.
It retailed 20,067 used vehicles in Q1, up from 19,736 in Q1 2016, a 2-percent increase. On a same-store basis, used retail sales climbed from 18,447 to 19,555, a 6-percent jump.
And the retailer believes pre-owned can continue climbing.
Update on Q auto
The Asbury executives were asked multiple times about Q auto by the investment community on the call.
Emphasizing that Q auto’s impact on quarterly results was “immaterial,” Monaghan said that Asbury is operating Q auto as “discount used-car store that’s supporting just the local Tampa market” and largely sees it as an “experiment.”
“Fundamentally, we keep coming back to ROI on everything we do. We want to generate a return on the investment. We’re trying to prove that we can make that model economically viable,” Monaghan said. “And at this point, with just two stores, it’s just not material to our results. I don’t think there’s much to add. We continue to work on it. But we’ll watch and see where it goes.”
Monaghan said Asbury has not considered utilizing some form of M&A with an established used-car standalone brand, something that, for instance, both Penske Automotive Group and Sonic Automotive have done.
Instead, Asbury is concentrating on making Q auto generate a return on investment that exceeds the capital cost, he said, and going from there.
Monaghan said that, “if we can make that model work, the outlets in our model if you would, we can move that across mobile markets and enjoy some success there.
“But until we see that it’s viable,” he said, “we’re not going to put a whole lot more capital into that. I would just share with you that the challenges of a standalone used-car store are really two-fold. One, you’ve got to source inventory. And, two, you’ve got to hang the paper for a large population of subprime buyers. “
The former, Monaghan said, isn’t incredibly difficult, provided the model doesn’t become “too large.” In fact, Asbury has cars it’s selling at auctions that it believes it could likely retail, he said.
As far as the second of those challenges, he pointed out Asbury has found many of the buyers at its standalone used-car stores are in subprime credit tiers.
“Hanging the paper is something that we’re doing in the marketplace; we do not want to retain that risk. Others have made a decision to retain the risk. That’s not where we want to go,” he said. “And so we’re just being careful as we move down this path.”
Jim Ellis Automotive Group announced recently that Jimmy Ellis, president of the family-owned and operated dealership network, has decided to launch a giving campaign that will benefit local first responders in Atlanta.
Each of the group's 14 locations will participate in the first responder campaign. A portion of the profit from every new or pre-owned vehicle purchase made throughout the month will be donated to first responders within its dealership areas, according to the group.
“Local first responders came to mind as a group that we would not only like to donate to during the month of May, but a group that we want to honor throughout the year with special incentives to say, ‘Thank you for all you do and the support you have given our business over the last 46 years,’” Ellis said in a news release.
“We are also so thankful for our customers that rally behind us in supporting each of these giving campaigns. Let’s see what we can do in May to give back to those who sacrifice daily for our safety and well-being!”
Along with the cash donations for local first responders, Jim Ellis Automotive said it will also extend special discounts to all eligible first responders throughout the rest of the year.
All qualifying first responders can take advantage of $500 off any vehicle purchase, in addition to a 15 percent discount off parts and service at any Jim Ellis dealership.
Additionally, the group said it will be working with first responders to set up additional “Thank You” events this year at both its dealerships and at local police precincts and fire stations.
Last year, the group had a similar campaign for the Boys & Girls Clubs of Metro Atlanta, which raised a $65,000 donation.
“After seeing the generosity of our dealerships and the support of our clients during the campaign with Boys & Girls Clubs of Metro Atlanta, I wanted to identify another local group that could benefit from more of this generosity,” Ellis added.
The latest move from Lithia Motors continues what has been an active few years on the acquisition side of the business.
The retailer has expanded its operations to Pennsylvania with the purchase of Baierl Auto Group in Pittsburgh.
Lithia announced the acquisition on Monday afternoon.
Baierl, which has Acura, Cadillac, Chevrolet, Ford, Honda, Kia, Subaru and Toyota franchises, pulls in about $500 million in estimated annual revenues, Lithia said.
“The combination of Baierl and Lithia continues our strategy of acquiring dominant franchises with entrepreneurial leadership ready to further unlock the potential of our new team and brand,” Lithia president and chief executive officer Bryan DeBoer said in a news release.
“Since 1954, Baierl has provided exceptional customer service to the Western Pennsylvania Community and we're pleased to partner with them to accelerate growth,” he said. “Entering the Pittsburgh market increases our involvement in cutting-edge technology around autonomous transportation and allows us to proactively adapt and learn from the consumer behaviors and trends associated with it.”
Lithia continues to grow and become more nimble, "strengthening our capital engine for growth," DeBoer said.
"Our strategy of acquiring businesses that have yet to realize their potential provides greenfield rates of return, while the stores we purchased over the past several years supply internal dry powder to deliver earnings growth independent from the new vehicle SAAR as they mature," DeBoer said. "Our entrepreneurial, people-powered culture allows us to purchase unrealized potential at extremely attractive prices with very low risk and outperform not only auto retail, but all retail."
That enterprising spirit was evident in comments made during the company's latest earnings call and through its M&A activity in recent years.
Lithia bought DCH Auto Group in the summer of 2014 and then the Carbone Auto Group last September.
In Lithia's quarterly conference call last month, DeBoer did more than hint that the company was far from done expanding its footprint.
“I think when we think about acquisitions at Lithia Motors, this is something that perpetuates in each and every leader in the organization, here in Medford or in the stores,” DeBoer said. “It’s a day-to-day process that each of us are looking for growth opportunities.
“If we look at the physical market, it is the most robust market that we've probably ever seen,” he continued. “We believe that pricing is starting to equalize where sellers are asking relative prices to what buyers can be expected or willing to pay, and I believe that the coming quarters and years will be a good acquisition climate.”
DeBoer pointed out during the call that the amount of cash Lithia generates annually — $200 million to $300 million — gives Lithia the flexibility to make the moves it chooses. Furthermore, he said Lithia is seeing synergies of blending together its portfolio of stores. However, the Lithia boss reiterated that it’s an ongoing process.
“We want to build market share, we want to build stability, and we want to build those margin improvements and those revenue growth over a period of time,” DeBoer said during the call. “To be fair, it can take two, three, four, five years to be able to build upon that foundation, which is what creates that organic dry powder which allows us to continue to grow our same store sales to reach potential within those new acquisitions. It just takes some time.”
