On October 2003, Bart Reagor ponied up his own money to buy a used-car store in Lubbock, Texas, with a lot that could hold about 80 vehicles. He had three employees. Today, he heads a 21-store dealership group employing about 800 full-timers that is a growing powerhouse in used-vehicle sales, with a reach that extends beyond the borders of Texas.
Reagor Dykes Auto Group, of Lubbock, is No. 70 onAutomotive News’ list, released today, of the top 100 dealership groups based in the U.S. ranked by used-vehicle retail sales. That’s well above its No. 131 ranking on Automotive News’ list of the top 150 dealership groups ranked by retail new-vehicle sales. Last year, it wasn’t on either list. In addition, data compiled by the Automotive News Data Center show that Reagor Dykes derives a whopping 57 percent of its total revenue from retail used-vehicle sales. Excluding used-car giant CarMax Inc., at 84 percent, no other group on the list derives more than 40 percent of revenue from used retail sales.
“Any car you want”
The group has 12 used-only rooftops in addition to its nine franchised dealerships selling Mitsubishi, Ford, Lincoln, Toyota, Chevrolet, Buick, GMC and Cadillac brands.
On its website, Reagor Dykes promises shoppers that it will be “Your friends in the car business” and help them find “Any Car You Want,” even if its associates have to scour other dealerships to find that vehicle.
Reagor was no greenhorn when he bought his first store. The former Texas Tech University football player had been the general manager of a Group 1 Automotive Inc. Toyota-Hyundai dealership before branching out on his own. And he admits to some serendipity in his success. He acquired one new-car dealership when a man in the pew in front of him at church turned around one Sunday and asked, “You don’t want to buy a Ford store, do you?” He grew that store from selling five new Fords a month to more than 300 now. Both of his Ford stores received the brand’s President’s Award last year.
Reagor says the group probably would sell more new vehicles if it had more of its franchised dealerships in prime locations. But rather than paying premium prices for big-market dealerships, Reagor and his partner, Rick Dykes, prefer to buy inexpensive stores in smaller markets, staff them with great people, and sell well above expectations for those locations.
“All of our franchise stores are off the charts in sales efficiency. Our numbers look like we’re in premium markets,” Reagor says.
The stores are mostly in such west Texas cities as Lubbock, Midland, Plainview, Levelland and Floydada (population: 2,786). But roughly a quarter of the group’s sales are to customers outside of Texas.
For four years running, Inc. magazine has included the group on its list of the 5,000 fastest-growing privately held companies in the U.S. “We don’t place our value in bricks and mortar,” Reagor says. “We place our value in people.”
A good year
In general, 2017 was a good year for used-vehicle sales at the dealerships on the top 100 list. Sixty-five of them saw their used-vehicle retail sales rise, while only 35 saw a decline. Compare that with the dealerships on Automotive News’ list of the top 150 dealerships based in the U.S. as ranked by new- vehicle retail sales. Among those, fewer than half — 73 — posted an increase in new retail sales. CarMax Inc. handily claimed the top spot on this used-vehicle list again. The publicly traded company retailed 671,294 used vehicles in 2017, up 8.3 percent from a year earlier. It’s unlikely to give up the crown anytime soon. Each fiscal year, which for CarMax ends Feb. 28, the Richmond, Va., company adds about 15 stores. It now has 189 outlets. Of the top 100 stores in used, 26 posted at least a double-digit gain in unit retail sales, led by Gee Automotive Cos., of Liberty Lake, Wash. Gee more than doubled its retail used sales to 10,471 vehicles, as its store count rose to 23 from seven by acquiring most of the stores formerly owned by the much larger Ron Tonkin Family of Dealerships. Prime Automotive Group of Westwood, Mass., jumped the most in the rankings, climbing to No. 12 from No. 34 a year earlier, and almost doubled its used retail sales to 29,394. The gain came as Prime’s store count surged to 57 from 28. In October, GPB Capital, a New York asset-management company which already had majority stakes in dealerships selling 24 brands in 10 states, bought a majority-ownership position in Prime Automotive and merged its stores with Prime’s.
Gettel Automotive climbed 17 rungs in the rankings, to No. 72 from No. 89 last year. The Bradenton, Fla., group raised its store count to 17 from 13 a year earlier. Its new-vehicle dealerships in Bradenton, Sarasota, Gainesville, Ocala and Punta Gorda hold Toyota, BMW, Volkswagen, Porsche, Hyundai, Nissan, Acura, Chrysler, Dodge, Jeep, Ram, Chevrolet, Buick, GMC, Mitsubishi and Lincoln franchises. Anderson Automotive Group of Raleigh, N.C., posted the third-largest rise in the rankings, climbing 14 spots to No. 59 from No. 73, as it added a large Toyota store and its used-car operations during the year. The group has Toyota, Nissan and Kia dealerships in North and South Carolina. The group’s used retail sales rose 23 percent last year, to 11,542 — but “only 5 percent if you back out the new store,” said Dave Hudson, Anderson’s vice president of finance. Even at that more-modest pace, Hudson added, “I do think we had a good used-car year. Like everyone else, with margins compressed on the new-car side, we have to sell more used.” In addition, 37 of the top 100 saw their wholesale units increase from a year earlier, while 55 posted a decrease in wholesale units sold. Eight fell into the “not applicable” category, generally because year-earlier numbers were not available. Serra Automotive Inc. of Grand Blanc, Mich., stood out in its used retail-to-wholesale ratio, retailing 4.37 units for every unit it wholesaled. In contrast, West Herr Automotive Inc. of Orchard Park, N.Y., retailed 0.88 unit for every vehicle that it wholesaled. Among the top 10, Penske Automotive Group Inc.’s retail sales of 252,900 used vehicles pushed it into the No. 2 spot, ahead of AutoNation Inc.’s 234,148 units. Lithia Motors Inc. moved past Sonic Automotive Inc., 129,913 to 123,489, and ended up just barely behind Group 1 Automotive Inc.’s 129,933.
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