Automotive News - October 21, 2013 - Supplement - (Page S8)

8 ❙ OCTOBER 21, 2013 SERRA AUTOMOTIVE INC. Serra group tests ideas and trains managers at Michigan auto plaza Printed in Automotive News Oct. 1, 2012 Jesse Snyder jsnyder@crain.com J oe Serra, the Michigan dealer who was on the vanguard of no-haggle pricing 20 years ago, has long been an idea man. For example, he hosts annual one-day meetings with all of his lenders and has linked the pay of 24 of his managers to the net profit of his six-store Al Serra Auto Plaza in Grand Blanc, Mich., a suburb of Flint. His may be one of the only privately held dealership groups to employ a director of acquisitions - in this case a retired General Motors corporate vice president. Now Serra is on a growth tear. Serra Automotive Inc. is up to 25 stores in five states after opening Volkswagen, Kia and Subaru stores this year. And he expects to open a Cadillac dealership and make a four-store acquisition before year end. "We'll buy or we'll build on an open point - the only thing we won't do is accept a poor return on investment," Serra says in an interview in the one-story brick headquarters built by his late father, Al, who began by opening a Chevrolet store in Grand Blanc in 1973. Joe Serra prefers auto malls and dealership clusters, but he also has purchased standalone stores: Gold Coast Cadillac in Oakhurst, N.J., and BMW of Schererville in northwest Indiana. And there are other stand-alones throughout Michigan. "We have no targets, no specific goals except to stay focused and be profitable," Serra says. "We need three things for growth: opportunity, capital and people." Pete Gerosa, 70, the director of acquisitions, focuses on the opportunities. He was hired in 2007 after retiring as GM's corporate vice president of advertising and marketing. Gerosa scouts for purchases and his factoryguy credentials enhance Serra's bids for open points from manufacturers. Unofficially, Gerosa also is a sounding board for Serra and his senior managers. "He doesn't need the job, so he is free to tell me, 'You screwed up on that one,'" Serra says. Serra's expansion drive is a rebound from the recession. In 2009, the group closed two Saturn and two Hummer stores. Joe Serra, right, with son Matt, who heads Serra's Answer Team. The team provides auto technology assistance - regardless of a vehicle's brand or where it was purchased. Serra Automotive Inc. Ⅲ Owner: Joe Serra Ⅲ Headquarters: Grand Blanc, Mich. Ⅲ Group: 25 dealerships, 19 brands Ⅲ 2011 new-vehicle sales: 17,122 Ⅲ 2011 used-vehicle sales: 15,357 Ⅲ 2011 revenue: $992 million Joe Serra: A leader in the no-haggle concept "We lost the No. 1 and No. 5 Hummer stores in the country and the No. 2 and No. 7 Saturn stores," he says. And while he has added two Cadillac points, the new Kia, Volkswagen and Subaru stores are a deliberate diversification from GM. Serra would like to add Ford and Nissan as well. The growth strategy helps drive Serra's innovations - and vice versa. Capital is critical during rapid expansion, so he has initiated an annual meeting with all his lenders. "Ally, Huntington, Citizens - we share our financials and tell them where we're going," he says. Al Serra Auto Plaza is both a test bed of ideas and the cradle of future dealership managers. There, Serra relies on key managers, including Denny Dunfield, plaza general manager; Tony Nichols, comptroller; Dave Wenzel, plaza sales manager; and Paul Householder, fixed operations director. The plaza, which by December will have seven new-car stores, is where Serra introduced no-haggle pricing in 1992. He says increasing price transparency has moved the whole auto industry toward his concept. "With the Internet, how can you not price one-price?" he asks. In 2000, Serra did away with departmental business silos at the plaza in favor of more cooperation. He did that after discovering that a competitor could sell pickup bed liners for less because each Serra department had internal markups. Now all 24 managers are paid monthly bonuses on the net profit of the auto plaza rather than the results of their individual departments. And all managers get daily online reports see SERRA, next page

Automotive News - October 21, 2013 - Supplement

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