DETROIT (AP) - With 373 franchises in 17 states and $20.5 billion in revenue, AutoNation leads the top 100 "megadealers", according to a list published Monday by Ward's Dealer Business magazine.
A megadealer is a company that owns a group of dealerships. Of the roughly 2,200 new car dealerships in the United States, about 1,725 are owned by the top 100 megadealers, accounting for 5.1 million new and used vehicles sold last year, according to Ward's editor Steve Finlay.
Megadealers were ranked based on revenues from new and used cars, fleet and auction sales and from parts, body shop and service operations.
The secret to AutoNation's success is diversification, according to CEO Mike Jackson. He says the Fort Lauderdale, Fla.,-based company not only sells new and used cars, but handles finance, parts, collision and insurance, which Jackson called "high margin businesses."
The most "mega" of the megadealers wants to become even larger, with plans to expand this year in mostly Sunbelt markets, president and COO Mike Maroone said.
Roger Penske's United Auto Group, at No. 3, was the highest rated of the six Michigan megadealers on the list. The Plymouth, Mich.-based Don Massey Cadillac group came in at No. 16.
Once a neighborhood Cadillac and Oldsmobile dealer, Massey now sells everything produced by General Motors Corp. - except for Saturn - plus Rolls Royce, Honda and Saab at dealerships in Michigan, Florida, Colorado, Tennessee, North Carolina, Kentucky, Texas and California.
Massey vice president Melissa Heaughen said the secret to the company's success is the "Massey way of running dealerships, working bell to bell." That means opening as early as 7 a.m., with some Massey dealerships open 7 days a week.
Massey himself "is on the showroom floor" to give the personal touch and keep an eye on things, Heaughen said. Other Michigan megadealers on the Top 100 list include Serra Organization of Grand Blanc, No. 28; The Suburban Collection of Troy, No. 40; Mel Farr Automotive Group of Oak Park, No. 87; and Stewart Management Group Inc. of Garden City, No. 93.
A personal touch is an important element in maintaining a megadealer's success, said Ward's Finlay, because it is vital for customers to feel a megadealer will give the same service as a stand-alone store.
"They take a local approach in their business models," Finlay said. "The people that run the stores are local people, the advertising's local and they don't make a big deal about being a consolidator."
Maroone said each dealership that AutoNation takes over employs local management that "understands local issues." The local name also is retained on the dealership so the customers may never know it's part of the AutoNation family, Jackson said.