Automotive News - March 3, 2008 - (Page 34)

34 • MARCH 3, 2008 THE DEALER SPEAKS Big Texas dealer returns to some domestic brands R amsay Gillman owns 13 auto dealerships in Texas. His Gillman Cos., of Houston, ranked No. 53 on last year’s Automotive News list of the top 125 U.S. dealership groups. Although Honda and Mitsubishi franchises predominate at his company, Gillman says he is bullish on some domestic brands and has begun reinvesting in them. Gillman, 64, was president of the National Automobile Dealers Association in 1997. At last month’s NADA convention, he shared his 2008 industry forecast and discussed his company’s strategies with Retail Editor David Kushma and Staff Reporter Donna Harris. What’s your forecast for this year? I think we’re going to see 16 million light-vehicle sales, less a little. It’s not exactly the worst year we ever had. Texas is not as affected by the credit crunch as other states. The Texas economy is good. The unemployment rate is very low. The price of oil and gasoline has got to hurt sales some, but it’s keeping our economy running pretty good. I predict that some brands will gain market share. Honda is already predicting a bigger year this year than last year, and it doesn’t sound like Toyota is backing off a lot. I just bought two Chevrolet stores. A lot of my managers came out of the Chevrolet make meeting as upbeat as they can get. If you are positioned with the right products, those products are going to flourish in a down market. Why did you unload your domestic franchises? My first move away from domestic brands was in 1997. I had been a Pontiac-GMC dealer. A friend of mine with GM said we needed to relocate this dealership. I said it was not the time to be spending money on facilities. If we moved the dealership, it was not going to make it. He asked if I would sell it, and I said no. It was my introduction to the auto business. He said, “You would sell it for a price, wouldn’t you?” Two weeks later, we had a deal. But I reluctantly sold it. Now the dealership is broke and no longer in business. The building is gone, and a small shopping center is there in its place. I had Lincoln-Mercury for years and Ford-Chevrolet in a smaller town. That didn’t work for me. I sold the Lincoln-Mercury store to the Ford dealer down the street. He was the natural buyer for it. He’s doing a lot better job than I was doing. Honda, Acura and Nissan have treated me very well. I am still really excited about those brands. They make a lot of money. I just stuck to my knitting there. Why did you start acquiring domestic franchises again? Chevrolet is going to be a rising star. I just bought Chevrolet stores and a Buick-Pontiac-GMC store. I really like Chevrolet’s products. GM will have to make some hard decisions, but I think Chevrolet will remain a major focus. Chevrolet has some good people Did you ever consider selling to a public dealership group? Some made overtures, but we like being a family-run business. We have to be somewhere between AutoNation and the typical family business. We have good values, know our customers and have our name on the back of the car. But we are adopting a lot of corporate principles. RAMSAY GILLMAN At first, public dealers scared everyone. But I said we dealers need to embrace this. If something happens to me, and my kids don’t get along, they can call four or five individual operators. If those individuals all say they don’t want to buy the company, those public guys are bigger than me. They’re a ready market for my dealerships. We can coexist with the public dealers. The mainstream dealer body will continue to flourish. There is even a niche for the small dealers in small towns, where the public dealers show zero interest. These guys are leaders in their communities and create a lot of business. Are you standardizing a lot of your processes? We have been working on that for 10 years. I don’t think we are there yet. I think standardized processes need to be more flexible than those of the public companies. A family business like ours can take all their good ideas, and if some don’t work, we are in a better position to change rapidly. My daughter and two sons (Stacey Gillman Wimbish, 41; Jason Gillman, 38; Christopher Gillman, 30) realize that. My daughter does an excellent job focusing on standards and procedures. My two sons are a little more like me. We just want to go out and sell something. Do you have a succession plan? I am a very fortunate dad. If something happened to me, I am comfortable our business would be well taken care of. I have a formal succession plan. The structure is in place. It will enable my three children to work together. The plan draws on and uses each of their strengths. My plan is for them to own the company equally, though one will have to be the leader. The big concern is family infighting. We are doing everything we can to avoid that type of turmoil. My kids all have really good strengths. If they all use those strengths together, they will do fine. Have you decided on the leader? All I am going to say is that she will wear a skirt. c Texas dealer Ramsay Gillman, seated, says: “A family business like ours can take all their good ideas, and if some don’t work, we are in a better position to change rapidly.” With the dealer are his children, from left, Stacey Gillman Wimbish, 41; Christopher Gillman, 30; and Jason Gillman, 38. now. They have learned to be more flexible and aggressive. I don’t think they want Toyota to outsell them. I think they will do everything to keep the Chevrolet brand vibrant. You’ve stuck with Mitsubishi through its struggles. Mitsubishi has two goals: sell 130,000 cars a year and get profitability back. I think they are trying. They have been fairly successfully reviving themselves as a manufacturer. Now they are going to concentrate more on the dealer body. Honda is pushing a building campaign. Some dealers don’t like it. What about you? All my stores are compliant with Honda’s image program. I’d say the glass is half full. Honda is saying to dealers: “Guys, we are going to bump the machine up a little. We are going to sell more cars, and we need to give the customer the right experience. If we create more volume, we are going to have to tweak these facilities, even though you built it seven years ago.” I think Honda is tired of Toyota kicking it around. They are starting to get a little more aggressive. How important are used-vehicle sales to you? We are concentrating more on used-car profits and studying the used-vehicle grosses and how used cars affect our service departments. Today’s used-car customer was a new-car customer not too long ago. You have got to treat used-car customers like you treat the brand-new customers. They are a sophisticated and integral part of the business. CarMax adopted the best principles of the best car dealers. They are doing fine, but they are not going to take over the world. On the way to the tar pits, we dealers are selling more used cars than we have sold in our history. When you were NADA president, the Internet was just emerging as a marketing tool. My theme was that we need to embrace the Internet and look at it as an opportunity. I was just as right as I can be. Salesmen get scared because the consumers who shop the Internet know as much as they do. But Internet customers come into the dealership because they are interested in a car. Consumers still want to come into the dealership and kick a tire. Dealers also started going public around the time you were NADA president. What do you think of public dealers now?

Table of Contents Feed for the Digital Edition of Automotive News - March 3, 2008

Bob Nardeli's new big-idea guy New Kia boss reaches out to restless dealers Scion hits a wall Lithia losses raise caution flag Detroit 3 shun talk of NAFTA do-over Lincoln names new marketing manager Mercedes to launch hybrid sedan in '09 Mazda has new top marketing exec M-B will hit the road with 50-state diesels Pontiac puts big ad bucks into traditional media for G8 Reynolds, ADP diverge on growth strategies Ford plans to cut fleet sales 10% in 2008 Mazda: New models, styling will boost its loyalty rate Run-up to axle strike adds to supplier woes Webasto's fast heater will debut by 2010 Russian plant wants to be world's biggest A Lancer is hatched Chrysler throws out purchasing rulebook Honda sets lofty hybrid goal, with Civic's help Honda: Use of ethanol limited, must be biomass Honda CEO Fukui: No recession in U.S., despite soft sales in spots 550 hp? 620 hp? Is GM crazy? Doug Fraser was a great leader How ironic: Lyons learns caution Well done, Doug Don't let Calif. impose fuel rules on the nation Blame the dealer, not the brand Cutting weight doesn't cut safety When Lutz dumps on global warming ... JM exec Czubay: A taste for hogs, pierogi Doug Fraser: A good man to have known Fraser led UAW with 'combination of substance, politics and charm' Autonet finds success at NADA with wi-fi for cars GM to sell medium-truck business, keep dealer network Web classified ad firms renew marketing to dealers, buyers Chery designs venture's vehicles China venture eyes 20,000 Fiesta hatchback sales Toyota plans crossovers in China Dongfeng, YuAn plan minicars BMW shakes up global marketing, sales ranks Delphi divestiture boosts forging supplier Is Blackhawk purchase bucking a trend? Repair company grows as Detroit 3 struggle BorgWarner unit expands German automakers seek more parts sourced in North America Hyundai picks ArvinMeritor Japan parts firm to build Miss. plant Nissan to increase spending on IT Purchase keeps Tenn. plant open Automakers hit with apartheid claims Mexico sales flat in January Ford prices '09 Flex atop crossover line Hamp rejoins Visteon board RV deliveries decline 3.4% in December Subaru lowers Forester price Personnel Bright future for LED headlight suppliers? Valeo's Morin to Pardus: Learn before you leap German automakers aren't worried about U.S. recession Porsche's Wiedeking: We must retool VW Europe's loud debate over quieter tires Noise level depends on the tires, the road Auto industry robotics spending jumps 43% in 2007 Electronic brakes struggle to get traction Big Texas dealer returns to some domestic brands AutoNation chief sees tough '08, better '09 In downturn, Sonic looks beyond new cars GM promotes service, parts leads for dealerships 10 cool dealership technologies found at NADA Dealers Kia will build transmissions at Georgia plant Gibson leaves DealerTrack board Akebono closing Kentucky plant Feds issue Ford fire warning Magna net income drops VW to use Siemens' software A tale of 2 exhaust systems EU wants CO2 in ads; battle looms Maize malaise stalls ethanol Tata to siesta during Ford's Fiesta Honda moves its American bike offshore Honda will recycle cycle plant Tom LaSorda's multimillion-dollar smile

Automotive News - March 3, 2008

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