Lawsuits be damned - H. Wayne Huizenga and his Republic Industries Inc. continue to accumulate Toyota dealerships.
Republic last week said it had agreed to purchase its fifth Toyota dealership. This one is not just any store - it is owned by the chairman of the Toyota National Dealer Advisory Council, Bob Navarre.
Navarre will sell Libertyville Toyota in Libertyville, Ill., to Republic for $29 million in Republic common stock.
Toyota Motor Sales U.S.A. Inc. responded immediately, saying it will battle the Fort Lauderdale, Fla., company in court, if necessary. 'We'll do whatever we can to protect the interests of our customers and other dealers against the potential dangers associated with rapid, multiple dealership acquisitions by a single enterprise,' said a Toyota press release. 'If that means more litigation with Republic, so be it.'
Republic remained determined it could resolve its problems with Toyota. Jim Donahue, Republic spokesman, said the company is continuing efforts to make peace with Toyota. 'We'll stay at this until we solve it,' he said.
Toyota has already won one round. Joe Myers, a Houston Toyota dealer, backed out of a deal with Republic when Toyota asked the Texas Motor Vehicle Board to stop the purchase.
Toyota also filed a suit in U.S. District Court in Phoenix in an attempt to stop or delay Republic's planned purchase of Tempe Toyota.
As a result of his deal with Republic, Navarre, 39, said he would resign from the dealer council. His term expires at the end of this year.
Toyota dealer council rules say members must own at least 25 percent of their stores. Navarre would therefore be ineligible.
Navarre said he had talked with Toyota about the proposed sale.
'Toyota said they would look at the transaction and review it in the normal course of business,' he said. 'They did not say that they would oppose the transaction.
'I believe under my franchise agreement and Illinois franchise law, I do have the right to enter into and complete a transaction with Republic Industries,' he said. 'I'm confident I will be able to complete that.'
Navarre said he did not want to irk Toyota by selling his dealership.
'Toyota is the finest car company in the world. I believe it would be valuable for Toyota to visit Republic and see the quality of the people involved in this company, if they haven't already.'
Toyota policy limits any single entity, such as Republic, to owning seven Toyota stores and three Lexus sites. The rules also state that any buyer must wait nine months between purchases.
Libertyville Toyota is the first Republic toehold in Chicago. Republic plans to build one of its auto retailing and rental 'clusters' in the city, said Steven Berrard, Republic president and co-CEO. Those clusters include new-car dealerships, AutoNation USA used-car stores and outlets of its National, Alamo and Spirit rental-car companies.
Dan Myers, a Tallahassee, Fla., attorney who specializes in state franchise laws, said Illinois law strongly favors the seller, such as Navarre, in any transaction.
Illinois law requires uniform application of a policy. In this case, Toyota has already violated its own set limits by allowing United Auto Group to buy three Toyota dealerships at once. United bought three Staluppi Toyota dealerships - two in New York and one in Florida.
The move also signals Republic is ready to begin outgrowing its Sun Belt strategy.
Said Myers: 'If I were a Chicago automobile dealer, I'd probably leave my answering machine on, because I would expect Republic to come courting.'
Republic also has received approval from local zoning authorities to build an AutoNation USA store in Gurnee, a Chicago suburb.