News Column

Automotive Dealers Move Wheels

Jun 2 2000 4:02PM

--> Multiple dealerships and auto malls reap revenue growth, especially in places with a growing population.

By Scott Williams

As the largest inland port in the United States, Laredo, Texas, plays host to thousands of Mexican residents who come seeking merchandise that's unavailable or too expensive back home. Local merchants capitalize on this fact by selling items at higher prices than those in cities farther north.

But what worked for jewelers and clothing stores hurt car dealers, who watched in frustration as many Laredo residents drove to San Antonio to buy what they assumed were cheaper cars. "There was a perception that you could go to the bigger cities and buy a car for less," says Paul Young Jr., owner of Paul Young Auto Mall in Laredo. "Now that has changed."

For proof, look no further than the Paul Young Co. itself, ranked number 37 on the HISPANIC BUSINESS 500, with 1999 revenues of nearly $96 million. Although the company is the smallest among the top 10 auto dealers on the directory (see table), it's also the fastest growing, with a two-year revenue jump of 85.4 percent. Most of the top dealers function as auto malls or multiple dealerships.

"Our huge increase is partially due to Laredo's population increase," admits Mr. Young, noting that the city, with a population around 165,000 in 1996, is one of the nation's fastest-growing municipalities. "But it's mostly due to our efforts to make the community aware of our competitive prices and our commitment to customer service," he says.

Glen Jackson, owner of Inscorp, the largest insurance firm in Laredo, says Paul Young Auto Mall has a reputation for taking care of customers. "They are successful because when they sell a vehicle, they service it," he said. "That's why they've gotten so much repeat business over the years."

Mr. Young, who at 25 was the youngest Chevrolet dealer in the country when he took over for his late father in 1965, moved the dealership from its cramped downtown location to a 20-acre tract in 1978. "When we built it, people in Laredo thought it was so big it should be in Houston," jokes the CEO. "But I was determined to build something big, and I wanted room to expand."

Today, the auto mall includes Chevrolet, Chrysler, Dodge, Jeep, and Nissan dealerships, employs 165 people, and sells between 350 and 450 new and used cars per month. It also services automobiles, sells parts, and has a complete auto body and paint shop.
Like most successful entrepreneurs in the automotive sector, Mr. Young runs on high-energy fuel. "I've always been a 'Rah-Rah' kind of a coach. Now I've got people going 'Rah-Rah' with me. My management team is blowing my goals and objectives away every month," he says.

Mr. Young sets goals for each of his seven departments and monitors their progress daily. He grades each department's performance with a letter grade between "A" and "F" a system he says encourages managers to strive to become "A students." "During the day, I walk around, go into different managers' offices, look over their shoulder, and say, 'How are we doing?'" he explains. "People want feedback about what they're doing, and with me they get it. When I have a salesman who sold five or six cars in one day, I want to look for that guy and shake his hand and say, 'Wow, how'd you do that?'"

Paul Young Auto Mall projects revenues between $120 million and $125 million for 2000, a 25 percent to 30 percent increase over last year. At this rate, the company might have to move to a larger location, a problem Mr. Young approaches with a typically upbeat attitude. "If we do run out [of room] it would be great," he says. "We'd just find another location and expand some more."

Top 10 Companies on the HISPANIC BUSINESS 500
1999 revenue
Company (in millions)
1. Burt Automotive Network $1,003.45
2. Ancira Enterprises Inc. $525.00
3. Elder Ford $329.41
4. Lloyd A. Wise Cos. $262.00
5. Allan Vigil's Southlake Ford $181.89
6. Barrett Holdings Inc. $128.54
7. Mike Shaw Chevrolet Buick Saab $124.41
8. Bella Automotive Group Ltd. $118.12
9. Gus Machado Ford Inc. $117.00
10. Paul Young Co. $95.97
Total $2,885.79

2000 Hispanic Business Inc. Reprinting, copying, or transmitting all or part of this information requires written permission.



Source: Hispanic Business Magazine


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