LAS VEGAS, NV — Ed Bozarth is a megadealer with five Chevrolet stores who is “making money on less volume” in markets such as Las Vegas, Topeka, Grand Junction, CO, and Aurora, CO, a suburb of Denver.
The five Bozarth stores sold 8,561 new and used units last year, keeping the group on the Ward's Megadealer 100 with $204.9 million in total revenues.
Although its new- and used-vehicle sales were flat in 2009, total revenues rose from $190.5 million in 2008, with “the Chevrolet product line and especially its trucks offsetting the decline in new-car sales,” says Bozarth.
To him, “Chevrolet is the fabric of America through thick and thin,” enabling the Bozarth stores to reap profits even in recession years like 2008 and 2009.
“Every store is profitable, helped by the fact that we do as much as $1.4 million in service and parts sales a month,” he says.
A one-time acquaintance of General Motors Co.'s Chairman and CEO Ed Whitacre, from the latter's years as chief of AT&T, Bozarth is a GM loyalist. This, despite the fact he lost the Buick franchise at his Grand Junction store to a nearby GMC dealer. “That was a sound GM strategy,” he says.
All Bozarth stores score above 90% in service department customer-satisfaction indexes, an achievement Bozarth ascribes in part to TV commercials in which he gives out his cell-phone number and invites viewers to call him.
“We are very serious about serving our customers and not ducking phone calls for any reason,” he says.
The Bozarth ad budget was chopped from $400,000 a month last year to $139,000, and 40% of the budget is being invested this year in the Internet. But the dealership group still advertises in newspapers — for a good reason.
“In our markets, 400,000 newspapers are distributed daily in Denver, 40,000 daily in Topeka and 20,000 daily in Grand Junction.” He wants to plug into those numbers.
Bozarth's stores are run by general managers who have equity stakes, except in Aurora. He targets a 6% profit on sales after factoring in rent, but the 2008-09 downturn caused store yields to fall to 1.5%-2%
“CSI is a key number,” Bozarth asserts. “We find that with our high CSI, 85% of those customers buy another GM product.”
Bozarth is a firm investor in facilities upgrading. The Grand Junction operation added a preowned store and lot for $6 million, and Topeka got a $3 million service facility and $800,000 showroom upgrade.
Bozarth's ultimate goal is to make his Las Vegas store, where his son, Kent, is the general manager, “the largest in the U.S.”
He has rejected 26 non-GM franchise offers, and reaffirms his commitment “to serve one manufacturer the very best we can. The entire GM team is terrific. This is the powerhouse of powerhouses. Why should we go elsewhere?”
Bozarth, 66, attended an executive education program at the Harvard University Business School in 1982-84. There, a marketing professor, Marty Marshall, said it would behoove him to be a dealer for either a niche or a high-volume product.
Already running a Dodge store in Topeka, Bozarth decided in 1985 to switch to Chevrolet. Twenty-five years later, Bozarth has no regrets about becoming a Chevy dealer.
“If I went away tomorrow, people would still pull in,” he says “I like to think they'd pull in because it's an Ed Bozarth store, but it would endure because it's Chevrolet and because our general-manager partners are the best in the business.”
He says his stores charge the lowest service prices in any market. “Our mechanics would rather be busy and taking home bigger paychecks than be paid more per hour and only turning in 25 hours of work time,” he explains.
Bozarth believes that his out-front style enabled his stores to pull through the 2009 recession despite a 60% profit drop caused by the decline in sales.
Used vehicles outsold the new ones at his stores by about three-to-one in 2009. He has trimmed his sales staff from 170 to 50 at the five stores.
His goal is unshaken: To become the No.1 Chevy dealer in the U.S.