HispanicBusiness

But the Chavez family hasn't rolled over. Several other large networks, including Sonic and Group 1 Automotive, have cashed in their chips and walked away from the Denver market, in part because of the tough competition they've faced. And even king-of-the-hill AutoNation, which bought the local Denver outlets of football legend John Elway, hasn't found the going easy.

Lessons Learned

The Chavez family isn't entirely unique. Across the country, Hispanic-owned dealers are fast becoming serious contenders on the automotive retail scene. Seventh in the sector and No. 30 on the Hispanic Business 500, Irma Elder has become a force to be reckoned with right in the Motor City, racking up sales of $235 million in 2006. Her late husband opened up a Ford showroom in what was then farm country in 1967, but today the Troy Motor Mall, where the group's flagship stores are based, is a powerhouse of Detroit retailing.

Like Burt, Mrs. Elder has recognized the need to diversify, adding brands such as Jaguar and Saab. "I like the diversity," she explains. She now has nine different dealerships in Michigan and Florida.

Mrs. Elder and Mr. Chavez have both learned the lesson that has critically reshaped the retail side of the automotive business over the past two decades.

In lay terms, it's a matter of not putting all your eggs in one basket. Through the 1980s, the American auto marketplace was a relatively static place, with each manufacturer locked in a relatively fixed position. Today, the market is vibrant and also quite unpredictable. A carmaker that dominates this year may see sales and share collapse tomorrow – taking retailers with it.

By spreading out into multiple franchises, dealers are better positioned to withstand the ebbs and flows. They can ride the coattails of a success story, such as Toyota, and trim back investments – and thus, liabilities – with a fading brand, such as Ford or Mitsubishi.

"Diversity is survival in this business," says Lou Sobh, CEO of Lou Sobh Automotive in Duluth, Georgia, whose company ranks fourth in the sector and 16th in the Hispanic Business 500. He's talking about dealers needing more than one brand in their showrooms.

"We have 15 stores. Some make money, some lose money, and we make a little," he says. "You can't have all your eggs in one basket – the chickens have stopped laying."

Overall revenues are down about 25 percent, he says, to about $420 million in 2006, and spending per employee has fallen. "We're trying to keep as many employees as we can, waiting for things to turn up," Mr. Sobh says. In the industry as a whole, the number of employees has held steady to a little lower since 2001.

He adds that small SUVs, such as the new GMC Acadia, are doing well.

"Hybrids are selling well although people are not asking for them as much as I first thought. Some don't like the price and some see little difference in mileage."

Diversity in Models and Mileage

Greenway Ford's Mr. Rodriguez, who has multiple dealerships in the Southeast, sees diversification as a necessity. "You have to have diversity in brands if you're going to survive. No brand is on top forever," he says.

Revenues have been up and profits with them. Mr. Rodriguez says having diversity in markets has helped in that regard.

He has five stores in Orlando with others in Nashville, Tennessee; Huntsville, Alabama; Tampa, Florida; and three in Shanghai, China.

"We wake up every day and say, 'We're going to go sell something.' We don't listen to the bad stuff. People still have to buy cars and trucks," observes Mr. Rodriguez, whose company is No. 12 on the Hispanic Business 500 and third in the automotive sector.

Silvestre Gonzales, whose Los Angeles-area Gonzales Automotive Group is No. 20 on our elite list, says revenues are higher than last year on a year-to-date basis. In 2006, his company posted revenues of $296 million.

"I feel the public is accustomed to higher gas prices and know they need transportation," he says. "We've had to trim payrolls so productivity has increased. In order to be successful, any dealer in domestic brands has to be diversified. Better have some imports."

There's growing interest in alternative fuels like diesel and ethanol, but availability of the fuels is still a problem, Mr. Gonzales says.

What's more important is an increased awareness of what he calls "miles per gallon per person." That comes into play for minivans and three-seat SUVs because they allow more passengers per gallon of fuel consumed.

"That's the new phenomena that's helping domestics – more miles per gallon per customer. That should be the domestics' creed," Mr. Gonzales advises.

Jeronimo M. Esteve, whose Miami-based Bella Automotive Group is eighth in the sector and No. 35 on the Hispanic Business 500, is a happy camper. "Fortunately, we have the Toyota brand. It's been a wonderful four months – we're coming out of the best quarter ever," he says.

And 2006, with its revenues of $205 million, was better than 2005 by 12 percent while productivity remains constant.

"We do not over hire," he notes. "We're in the right place at the right time with a broad line of cars that have a lot of miles per gallon."

Hybrids are selling well but at a slower pace than last year because some tax breaks are gone. "Life is wonderful on this side of the fence," Mr. Esteve says.

With sales of $171 million, Alan Vigil is 10th in the sector and No. 43 in the Hispanic Business 500, but he's taking his time, acknowledging that two stores are enough, for the moment.

Even then, Alan Vigil Ford, based in Morrow, Georgia, is the 50th largest auto retailer in the United States and 16th in terms of parts sales. As with so many other major Hispanic dealers, he's focused on the larger community, rather than trying to focus on Hispanic consumers.

But that sense of community is still an underlying factor, as is family, having recently installed his college-grad son at the smaller showroom "to give him a shot."

That, it seems, is what Hispanic retailers want and need the most.