A disciplined strategy can help dealer groups grow, acquire or exit
You’ve worked hard over the years to grow your dealership group.
Dollar after dollar, deal after deal, customer issue after customer issue, you have scaled your business to a level you may never have imagined.
Now it’s time to think about next steps.
Do you continue on the growth path for the next generation? Do you sell and cash in on your years of hard work?
Both are respectable options, but make no mistake: These are long-term strategies that require methodical planning and tactical execution to achieve the best results.
Let’s look at your options for the long term.
Growth strategy
You can’t continue pulling the same levers and expect to achieve new growth targets.
You will need to push same-store growth through aggressive performance targets and actively look for new revenue streams.
Focus on fixed operations, F&I, used vehicles, digital retailing and tighter cost management, rather than front-end gross on new vehicles alone. Higher service retention and better digital conversion remain hot topics for organic growth.
Expand fixed operations because service and parts contribute a disproportionately large share of dealership gross profit and create recurring customer traffic.
Focus on used-vehicle growth through centralized sourcing, faster reconditioning, better inventory mix and tighter pricing discipline.
Don’t forget about F&I optimization through product penetration, menu consistency, lender mix and training.
Digital retailing and BDC effectiveness should be measured to improve lead response, appointment show rates and close rates.
Develop solid retention programs that increase repeat purchase, service loyalty and lifecycle value.
Operationally, focus on the basics: improve service absorption, reduce reconditioning time, increase inventory turn, manage advertising and floorplan expense, and use data visibility across the group to spread best practices quickly.
Acquisition strategy
Acquisitions can quickly contribute significant incremental revenue to your dealer group.
The goal should be to add multiple rooftops over a defined period, depending on your franchise mix and store size.
Your dealer group should build a formal acquisition program with clear buying criteria aligned with your overall objectives. This includes target markets within current or adjacent regions, and franchise brands with resilient demand.
Strong fixed-ops potential is critical to retail automotive success.
