“People are feeling about as good as they’ve felt about purchasing big-ticket items right now,” says Aaron Zeigler, president of the Zeigler Automotive Group in Kalamazoo, MI.
The company owns 73 franchises in Michigan, Indiana, and Chicago and has five stores, ranging from No. 98 to No.382 on this year’s WardsAuto Dealer 500.
Zeigler also hopes to expand in Florida and add Toyota, Mercedes-Benz and Audi franchises.
“We’ve had about 10 years of growth in the industry, so at some point it had to level off like it did last year,” Zeigler says. “(Auto sales are) going to be down this year, no doubt about that. However, it’s still at a pretty healthy level.”
The Zeigler group sold 40,000 new and used cars in 2018. The ratio of used- to new-car sales is currently 50-50, compared with 47-53 the year before.
“The used-car market is growing because there is such a big separation between a new-car payment and a used car-payment,” Zeigler says.
Average new-vehicle monthly loan and lease payments are $563 and $496, respectively, according to Cox Automotive’s 2019 Mid-Year Review and Outlook. The average monthly payment for a used car is $418.
Zeigler says slower sales and higher floorplan expenses are driving down the group’s profit, but it is still greater than NADA’s 2018 average of 2.2% of total sales.
The group’s wholesale parts business helps it stay ahead of downturns. Three Zeigler warehouses supply parts 24 hours a day to dealers and body shops throughout Michigan and in northern Indiana and Illinois. Wholesale parts sales are forecast to bring in $90 million in 2019.
Zeigler, who once raced jet skis on the pro circuit, has expanded his business into recreational motorsports with franchises that include Polaris, Sea-Doo, Indian and Arctic Cat.
“Every time I went to buy something in the motorsports world, I always had a lousy customer experience,” he recalls. “I always thought car dealers do it a lot better than the motorsports industry, which was about 20 years behind.
“We took everything we learned in the car business and put it into motorsports. We swung really hard, and it’s worked out terrific.”