A veteran auto dealer at 26: He stepped in, stepped up
Photo credit: LESLIE J. ALLEN
He grew up the son of a prominent car dealer, but Chadwick Martin had dreams of becoming an entertainment lawyer or an agent.
But in 2006, the death of his father, Cornelius, in a motorcycle accident changed everything.
At age 26, Martin now leads the company his father founded, Martin Automotive Group, a unit of Martin Management Group of Bowling Green, Ky.
He helped diversify the company, which once was heavy with General Motors stores, by adding Kia, Subaru, Hyundai, Mitsubishi and Chrysler Group franchises. And he offers a youthful perspective on the industry.
He spoke with Staff Reporter Leslie J. Allen.
Q: What does Martin Management Group include?
A: We have 11 automotive dealerships and three motorsports dealerships. We also manage a fixed based operation at our regional airport in Bowling Green, Ky.
How did you become involved in the car business?
My dad started the company back in 1985. He started with an Oldsmobile-Cadillac dealership. Like a lot of dealers' children, you know, I grew up in the business: spending Saturdays in the store or going during the week, doing all the odd jobs that you do when you are growing up in the car business.
After your dad died, you finished college and went to law school. What finally drove you to take charge of the family business?
When I got into law school, I became more involved with the company. I was coming back and forth more often. I was doing more things, involved in more meetings, starting to ask more questions and things like that. I did that for two years into law school. It would been '08, I guess. It was around the time Lehman Brothers fell.
How much exposure did Martin Automotive have to GM then?
We had seven Saturn dealerships, we had multiple Chevrolet stores, we had a Cadillac dealership at the time, so we were very, very heavy into General Motors. Our portfolio was 80, 85 percent General Motors. The only import dealership that we had was a small Kia store in Bowling Green, Ky.
How did you adjust to the demise of Saturn?
We worked on replacing franchises after they said they were going to wind down Saturn. We also had two Chevrolet stores that they closed the point for, and we started the arbitration process on one of them.
How did you diversify your franchise mix after Saturn fell?
We were lucky enough to get really strong manufacturers like Subaru and Kia that have really shown growth year over year. So what's really been the silver lining in all of this is the fact that we're no longer 85 percent General Motors or any domestic. Now we have a very diverse portfolio of companies. If I was thinking more clearly back in '06 or even '05 or '04 even with my father, we should have talked about diversification a long, long time ago.
My father had grown up with General Motors and grown up with Buick and Pontiac, and our first store was also a Cadillac store. And so I think a lot of it was denial at first about what was really happening.
I prefer diversification over just being with one strong company any day of the week.
How exposed are you to GM now?
We have one General Motors store.
What is your most successful franchise?
Over the past year, in terms of ROI, dollar-for-dollar, Kia.
Are you profitable right now?
Where do you stand on factory-mandated facilities improvements?
We deal with some great OEMs, some great manufacturers that have very reasonable requirements. We deal with some other ones that have some not-so-reasonable requirements. I think that at the core of these arguments is that we want people to know that, hey, this is my dealership, and I want it to look the way that I want it to look. I will have elements that make it look standard and uniform with other dealerships, like the same manufacturer in another city. But the parcel of land that this property sits on is different than the parcel of land that your Oklahoma dealership sits on, or that your Florida dealership sits on.
It's all different, so don't try to always fit a square peg into a round hole.
But all the hullaballoo about not needing to upgrade facilities is ridiculous. If your facility is dated, it needs to be upgraded. The issue is that there's a lot of facilities that are from the '90s, the late '90s and 2000s that don't need substantial upgrades because they're already very nice facilities.
What are the challenges of being 20-something and head of an auto group?
I'll be very blunt with you about this. Let's call it what it is. I'm 6-foot-2, I'm 26, I'm black and I wear a badge that says "dealer" when I'm at NADA. It's not like anyone's going to forget my face any time soon, OK? (Chuckles.) I'm going to stick out. I'm loud. I am going to stick out from other people.
I guess that's what makes it difficult sometimes, that I don't have the luxury of blending in. If you've come in contact with me before, you're going to remember me. Right off the bat, that's a good thing and a bad thing, depending on what the day is, right? For me to be in this business, I deal with a lot of people asking a lot of really stupid questions.
They used to ask at NADA, I'd go to a booth and everybody wants to know, "What do you really do?" It's unfathomable that someone who's not 48 could possibly sit in the chair and make decisions and do things. And so I spend quite a bit of time explaining myself to manufacturers or to financial institutions explaining why I can do the job that I do.
Does youth have advantages?
I'm really spending a lot of time hopefully developing a culture that makes our business work better and work more efficiently. I think that I bring with me a breadth of knowledge about new systems and processes of doing things that other people might not be able to have.
I think that sometimes this business is too insular, like a cocoon.
What's your perspective on TrueCar?
I relate TrueCar to Napster in the early 2000s.
That model, that type of structure, is going to be here forever. It's not going to change any time soon. So for people to say: "I hate TrueCar. TrueCar is killing the car business. They're killing our grosses." ... OK, let's not be like the music business where we just say this and we just try to stop TrueCar, only to turn around and an iTunes comes along and tells us how to play the game.
What's the biggest business lesson you learned from your father?
We're here to sell cars. He said, "Always ask the question: Does it sell cars?"
Was it tough stepping into his shoes?
He was my biggest supporter, he was my inspiration. He was the person that I looked to and that I just admired most in the world. So besides that personal loss, for the business, that was the core. He was the business. Mr. Martin was the business.
So how did we get through it? Well once you've kind of dealt with that, I think you just kind of deal with anything.
How did the family adjust?
My family is really close. We get along well enough that the business was able to move forward because there weren't people fighting and arguing over this and that.
Minority dealer numbers have dropped. What's your view on that?
I think it is sad how much progress we've made over the past 10, 15, 25 years, and to see that dwindle. It's so challenging now to buy a dealership, the capital requirements, and what the bank's requiring to buy stores. There's a very high barrier of entry into the car business, and that's for anyone. It doesn't matter if your black, white, Hispanic.
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