Vacaville, Ca — The Toyota-Scion dealership in this city northeast of San Francisco was sold in March by publicly owned megadealer Lithia Motors to someone who realized a dream because of the transaction.
Vacaville Toyota was purchased by Lithia eight years ago for about $1 million. It was sold for $7.1 million to Dean Parpia.
“The appreciation in the value of a Toyota store in California is not unusual,” says dealership broker Tim Lamb. “Toyota and Honda still are bringing premium purchase offers, despite the car-sales setbacks so far this year.”
He adds: “A goodly number of buyers still exist for franchised dealerships, even the Detroit 3. They might not yield the value growth of Toyota and Honda, or BMW and Mercedes, but don't forget that the domestic auto makers still have the attractions of their heavy-duty truck lines, while Chrysler has Jeep and Dodge Ram brands plus their minivans.”
In addition to disposing of the Vacaville Toyota store, Lithia recently sold a Centennial Chrysler-Jeep in the Denver suburb of Englewood, CO, for approximately $2.2 million and Chrysler-Jeep-Dodge and Hyundai dealerships in Fort Collins, CO, for a combined sum of $1.3 million.
Lithia Chairman and CEO Sid DeBoer says the Medford, OR-based megadealer broke even on the Englewood and Fort Collins sales. Lithia listed 18 of its 96 dealerships for sale this year, many of them Chrysler LLC-brand outlets.
Chrysler accounted last year for 31.1% of Lithia's new-vehicle sales and the chain has sought to reduce its dependence on Chrysler, its top revenue producer.
DeBoer says Lithia decided to sell the Vacaville store because the area east of San Francisco Bay “was being cluttered with Toyota dealerships and margins were under pressure on new-vehicle sales.”
As a top dealer for Chrysler, Lithia has, since its inception, concentrated on acquiring franchises in single-point markets with no brand competitors. DeBoer says the Vacaville area “started out this way for Toyota, then filled up with nearby Toyota stores that conflicted with our successful business model.”
Parpia, 57, the new owner of Vacaville Toyota is a native of Kenya. Prior to moving to California in 1979, he was a salesman for a Chevrolet dealership in Pittsburgh.
His California career began as a salesman for a Toyota store in Oakland, following which he was a salesman for a Toyota store in Walnut Creek and subsequently a minority owner of a Toyota dealership in Modesto.
“I was determined to become a 100% owner of a Toyota dealership, and the Lithia Toyota dealership in Vacaville seemed the right opportunity,” he says. “I began negotiating with Sid DeBoer in 1997, and it took 11 years to convince Toyota that my dream was feasible.”
Toyota Motor Credit, a subsidiary of Toyota Financial Services, was a principal finance source for Parpia's purchase of the Vacaville facility. The store's run rate before the 2008-2009 decline was about 200 new Toyota and Scion cars a month, with recent totals off to a store low of 120 a month.
“I told our 60 employes that we need to return to 200 or more when the economy recovers, as it will,” Parpia says. “Toyota has been a brand leader in this market and they have a lot of great cars and trucks in the pipeline.”
He says of himself: “That a boy from Kenya should be the owner of a Toyota dealership in California is something amazing.”