When Chuck Fortinberry's Chrysler-Jeep dealership stopped selling new cars on June 9, it took him just two days to sign a contract to turn his dealership into a NAPA AutoCare Center.
Then he contacted 23,000 of his customers to tell them about his new business, which now does business as Clarkston Motors.
“I didn't waste time,” said Mr. Fortinberry, whose Clarkston, Mich.-based dealership, formerly called Clarkston Chrysler-Jeep, was one of 789 cancelled as Chrysler Group L.L.C. emerged from bankruptcy on June 10. “Time is money,” he added.
For the 53-year-old former Chrysler dealer, the NAPA affiliation is a big first step to replace the revenue he lost when the struggling car maker yanked his dealer agreement.
NAPA, an Atlanta-based nonprofit auto parts association and division of Genuine Parts Co., is thinking big about the opportunity to convert hundreds of car dealerships. NAPA also has contacted some GM stores scheduled to lose their franchises.
Bob Susor, president of Atlanta-based NAPA, said the group contacted all 789 disenfranchised Chrysler dealerships when the list was announced in bankruptcy court on May 14.
“As soon as we saw the list, we did the mailing. They have facilities, and they have a customer base. That's how we're looking at it.”
Bills to pay
Like many other dumped Chrysler dealers, Mr. Fortinberry hopes he eventually will get another new-vehicle franchise. But he can't sit around and wait for someone to call. Rent checks are coming due. Employees must be paid. Now that his main meal ticket has been yanked, he's working out a business plan.
Recently, on a quiet morning at Mr. Fortinberry's property, large Chrysler and Jeep signs still hung outside. Temporary NAPA banners stood on the lawn and in the shop. Used vehicles stood out front, where new Chryslers and Jeeps once had been.
In July, about a dozen former Detroit-area Chrysler dealers met with NAPA. The Detroit dealers are forming an advertising association to pool money for local ad buys.
They're also discussing some new business concepts including an idea that Mr. Fortinberry has for a “NAPA Super Center” that would combine NAPA's traditional services with things that auto dealers offer—including pleasant waiting rooms, free shuttle service and loaners.
NAPA officials are cautious. They said they are not planning any new concepts at the moment and believe most disenfranchised car dealers easily could become NAPA AutoCare Centers. NAPA now has nearly 13,000 such centers and also operates about 6,000 NAPA Auto Parts stores.
NAPA said it is not planning to develop the Super Center concept. “Former dealerships would fit into current NAPA networks or programs,” said Bret Robyck, vice president of wholesale markets for NAPA. “This is for the disenfranchised Chrysler (dealer) who wants to do more than 50 percent of his business in service.”
Bill Hahn Jr., owner of Village Automotive—formerly Village Chrysler-Jeep—in the Detroit suburb of Royal Oak, has signed with NAPA. He said the parts chain “looks at this as a white sheet of paper. Collectively we're coming up with whatever's best for them and us. It was natural evolution. On June 9, Chrysler forced our hand. You've got all these dealerships throughout the country. This is what we do. We sell and service cars.”
With NAPA service, Mr. Hahn said he can offer “everything a customer is used to in a dealership, but they can get it 20 to 25 percent cheaper than what a dealership is charging.”
NAPA's Mr. Susor said the organization gets many of its parts from the same suppliers that make them for the auto makers.
Losing a leg
For Mr. Fortinberry and other auto dealers, NAPA offers a chance to make up for the revenue they lost when Chrysler yanked their franchises.
“If you don't have that service and parts and body shop revenue, you won't have the ability to pay for a facility of this size,” he said. “I lost one department. But I still have used cars. I still have service, I still have F&I (finance and insurance). You're taking out one leg. Was it a big leg? Yeah.”
Mr. Fortinberry knew he had to do more than just put out a few ads saying his mechanics could repair all makes and models.
“We want to set ourselves apart from Joe's Garage,” he said. “What NAPA brings is a nationally recognized quality name with a national warranty.”
He also wants his old customers to know he can still do the maintenance work to keep their warranties up, even though he can no longer do factory warranty jobs.
“Only 20 percent of my service department revenue was coming from warranty anyway because warranty's going down so far,” Mr. Fortinberry said.
Since Chrysler terminated his franchise agreement and cut him loose, he has trimmed his dealership staff from 36 to 19 and his average monthly expenses from $185,000 to $122,000. He also is cranking up his used-vehicle business.
With NAPA, Mr. Fortinberry has combined the parts brand and NAPA's 12-month, 12,000-mile warranty with Clarkston Motors' four trained technicians, latest diagnostic equipment, 15 service bays and 9,000-sq.-ft. body shop.
“I see huge growth in that part of the market, especially with the credit crunch and lack of new car sales,” Mr. Fortinberry said. “People are going to spend money on the ones they've got. There is going to be continued growth in the aftermarket and we've got to go after it.”
OK to sell wiper blades
Gus Russo, owner of Lochmoor Automotive—formerly Lochmoor Chrysler-Jeep in Detroit—said he believes the rejected dealers have to change their mindset as they adopt new opportunities such as NAPA.
“When we were a dealer, the customer came in the door, he did not want to pay for anything,” said Mr. Russo, who also has signed up to be a NAPA center.
“They thought Chrysler should pay for everything. Lately I have not had one person come in and say, 'I don't think I should pay for this.'
“We've got to not think like a dealer. It's OK to sell wiper blades for $5.”
This report appeared in Detroit-based Automotive News, a sister publication of Tire Business.
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