Small ragtag band developed into a solid dealer corps

Inspired by VW's success, some brave souls took a gamble and were richly rewarded

It isn't easy to build an automobile dealer organization. Just ask the people who have done it.

On the domestic side, it won't be easy to find them because most retail bodies were put together long, long ago. A group of dedicated Fordites built a corps of 10,000 dealers to handle Henry's Tin Lizzie, but that was in the teens and the 1920s. Much the same is true for the other domestic marques, and the principal problem their recruiters faced was pretty much the same: brand recognition.

Many early dealers had never seen or heard of the brand they were asked to sell. A few native Detroiters may have known that the Cadillac car was named for the founder of their city, French explorer La Sieur Antoine de la Mothe Cadillac. To others, it was simply a classy-sounding name chosen by Henry Leland.

Dodge? Two brawling, hard-drinking brothers. They were expert mechanics, but at the outset they probably were better known to Detroit's saloonkeepers than to its car sellers.

You get the idea: Brand recognition was zilch when most dealer organizations were fashioned.

And then there are the imports. In America, their brand recognition and dealerships were practically nonexistent half a century ago. Sure, Maxie Hoffman had a few outlets for Mercedes-Benz and Jaguar. But as late as 1954, fewer than 27,000 imported cars and trucks were sold in the United States — less than one-half of 1 percent of the total.

Enter Volkswagen. And equally important, enter Will van de Kamp in 1954. He almost single-handedly built -the VW dealer-distributor organization east of the Mississippi. VW had been around for a while, but the brand hardly was a big factor in the market.

With van de Kamp's retailers, VW sales exploded. Deliveries topped 100,000 in 1959, passed 300,000 in 1964 and 500,000 in 1968. It seemed no imported make would ever outsell VW.

A QUIET ENTRY

Toyota apparently didn't get the word about VW's invincibility and entered the United States in 1957. To say it exploded onto the scene would be a gross overstatement. Toyota crept into the U.S. market and almost crept out again because of a deficient product.

Lack of name recognition also was a big factor. Few Americans knew what a Toyota was, and most of those who knew didn't much care.

A classic VW ad once said: "In 1949, we sold two Volkswagens." Toyota was a little more successful than VW in its first year, with sales of 287 cars and one truck. It was a Land Cruiser, the SUV that is still in the lineup.

Toyota's deficient product was the Toyopet Crown, a compact, rather fragile car that wasn't suited to America's roads and drivers. Toyota executives withdrew it in 1961 and existed with only the Land Cruiser — about 25 years before Americans knew or cared what an SUV was — and with a couple of barely remembered, low-volume successor cars until the Corona arrived in 1965.

Toyota car sales totaled a rousing 113 in 1962 and only 40 in 1963.

It was tough sledding for the early dealers. One was Stan Rood in Seattle, one of the first Toyota dealers in the United States. And he didn't stay to welcome the Toyopet's successor.

Rood, now 89, was a Buick dealer in the late 1950s when Buick was one of the best-selling brands in the United States. He signed a Toyota sales agreement in the spring of 1957, and the Buick people were not at all pleased.

BUICK PRESSED; ROOD QUIT

Rood was general manager of Frank Hawkins Buick. He wasn't a long-haul Toyota dealer; he kept the franchise only about a year. Buick applied pressure, and Buick began importing the German-built Opel, which was selling well.

Rood said he took on Toyota because he wanted a small car and Buick didn't have one. That was before Buick hooked up with Opel.

World War II was still fresh in the minds of Seattle residents, and Rood recalled that many of his friends asked with disdain, "Why would you want to sell a Japanese car?"

In the early days of World War II, Seattle residents, along with other West Coasters, shuddered every time they heard an airplane overhead. Had the Japanese extended their reach north and east of Pearl Harbor?

Does Rood wish he had kept Toyota?

"Of course I do," he says. "It turned out to be a real moneymaker."

He and his son, Marty, sold their Buick store in 1984. These days Rood works on his golf game. The day he chatted with Automotive News, he said he shot an 88. "I guess that's not bad for a guy who'll be 90 in February," he observed with a chuckle.

Dominic Galardi is one who stuck around, and he's mighty glad he did. "The Toyota people have always been very good to me," says Galardi, who owns A-1 Toyota in New Haven, Conn., and is the state's largest Toyota dealer.

In 1963 he took over his father-in-law's gas station and received a bid from Toyota. Those were Land Cruiser days; the Toyopet was gone and the Corona had not yet arrived. The short-term Tiara and 1900 cars were filling in. Galardi recalls that one year he sold 66 Tiaras, the third-highest total in the nation.

A-1 Toyota now sells 1,600 to 1,700 new Toyota cars and trucks a year, and it's a second-generation dealership. Galardi's son and daughter are co-general managers. He notes there is a third generation on deck.

Galardi, 76, still comes to the dealership "for a few hours each day."

A LAWYER CHANGES COURSE

You didn't have to be an auto dealer to get a Toyota franchise in the early days, but few can match the roundabout route traveled by Sterling McCall. He was a lawyer in Houston, and one of his clients was C. Itoh, the huge Japanese trading company.

Toyota asked C. Itoh for the names of people who might be interested in opening an exclusive dealership. C. Itoh passed the request along to McCall, and McCall thought, "Why not me?" He became the first exclusive dealer in Houston and one of the few one-liners in all of Texas.

"Everybody told me I was crazy," he recalls.

Crazy like a fox.

The business started out strong in 1969, and got stronger. At one time Sterling McCall Toyota was selling 6,000 to 7,000 new cars and trucks a year. McCall was the first new dealer for Gulf States Toyota, the then newly formed distributorship that is still in business today.

In 1998, McCall Toyota and about 40 other dealerships joined Group 1 Automotive, a publicly held dealership group. He operated his dealership for five years and then became a consultant to Group 1. Today, at 72, McCall operates the Sterling McCall Old Car Museum in Warrenton, Texas, which displays more than 110 classic American cars.

FROM NURSE TO DEALER

Joyce Maloof was one of the first women to become a Toyota dealer. That was in 1966, and it was an action born of necessity.

Her husband, Harold, was a Simca-Renault dealer in Columbus, Ga., but he became ill and was unable to work. Joyce, a nurse, took over. But she wasn't enthusiastic about the product lineup. She talked with Toyota and acquired a car.

Her first stop was the bank, where the loan officer checked out the vehicle and told her: "OK. You get the money."

Joyce was dedicated to service and customer satisfaction. A house rule, she said, was "No unhappy customer leaves the dealership. That customer must see me first."

Her dedication to service won her a seat on the Southeast Toyota dealer council and the Toyota National Dealer Council, where she was the only woman among 12 men. She was in charge of service activities.

Joyce has sold her Toyota dealership but, at 79, maintains a lively interest in the auto industry. "Columbus needs a Lexus dealership," she told Automotive News recently, "and I'd like to own it."

RECRUITING? FORGET IT

Former Toyota executives recently reminisced about the dealer organization in the early days.

Norm Lean joined the company in 1969 and was the top American from 1978 to 1983. "In the 1960s," says Lean, now 80, "we had mostly used-car dealers. From the early 1970s on, Toyota was recognized as a comer. We never had to recruit a dealer during the time I was there.

"We restricted the number of dealers because I knew what happened with the domestics. We wanted to hold the number down so everyone could make money. Our emphasis was on the dealers making money."

Lean's alma mater, Ford, "was overdealered, and that's difficult for everyone because it's cutthroat. Toyota was a growing product, and we weren't able to keep up with demand. Dealers wanted more cars, but that's easier than having too many cars."

Yale Gieszl left Price Waterhouse for Toyota in 1970. He became a vice president in 1973 and ran the company as executive vice president from 1993 to 1999. Today, at 65, he is a consultant to Toyota.

"In the 1960s," he says, "the salespeople would sign anyone who would buy a few cars and had a few dollars. Some of those people with service stations ended up being first-class entrepreneurs, but a lot fell by the wayside.

"In the 1970s, as the franchise became more valuable, we started seeing a new class of dealer."

FROM BEER CANS TO TOYOTAS

Max Jamiesson was a Toyota executive in the 1970s and 1980s. His last post at Toyota was vice president in charge of field activities. Today, Jamiesson, 74, is president of a Toyota-Hyundai dealership in Salinas, Calif. He spoke with Automotive News about some of the early trials and tribulations with the new franchise.

"When I left Ford," Jamiesson said, "I got a lot of messages about beer cans being sent to Japan and coming back as Toyotas. We knew we had to make Toyota better, not just competitive with Ford and GM. Back then, the car was a piece of junk. The engine would grenade at 50,000 miles, and the brake pedal would fold into the floor.

"But the outside of the car was perfect, and the interior was great, too. So we told Japan: 'This is great. It shows we can make a quality car. Now make the rest of the car like that.' "

Jamiesson recalled that "in the late 1960s, we would distribute by color. One dealer would get all red Coronas; another would get all white; another, all green. Dealers kept their stocks a secret because they all had less than five days' supply.

"In 1975, we were the first automaker to package options down to three trim levels, mostly because we were too small to do menu pricing. That was also the year that Ford and GM started giving out customer cash. We said, 'Let's give it to the dealers instead to give them more flexibility in negotiations.' "

GAS STATIONS, LUMBERYARDS

Jim Press, 61, worked at Toyota from 1970 until his recent departure for Chrysler. He was president of Toyota Motor Sales U.S.A. before becoming president of Toyota Motor North America in May 2006. Automotive News asked him about the early days, when some dealers operated out of gas stations or lumberyards.

"There was some of that," Press said, "but it was not the backbone of the dealer organization. There were dealers who were opportunists, and it was a chance for them.

"But there are guys like Bob McCamey, of Chattanooga, Tenn., whose story is typical of long-standing dealers with long experience, many with European imports. Bob was approached by the Toyota rep, who threw him the keys and went to lunch.

"So Bob took a look at the car, went over to the diner, said 'Tell me more' and gave the rep a check."

Press said Toyota was encouraged by VW's track record. "Volkswagen's success gave us confidence that there was a market," he said. "VW was selling more than 300,000 a year, and we thought that someday we might be able to do that."

"Someday" came quickly.

Toyota topped the import sales chart in 1975 and has been the leader ever since. Toyota passed its goal of 300,000 U.S. sales in 1975. Last year Toyota dealers delivered 2,047,057 cars and light trucks. Add Lexus and Scion, the other parts of Toyota Motor Sales, and the total was 2,542,525.

You can reach John K. Teahen Jr. at autonews@crain.com.