A former manager of a large dealership group has formed a company to acquire and consolidate aftermarket service operations.
Steven Uiterwyk, former COO of Ferman Motor Car Co. in Tampa, Fla., is founder and CEO of Automotive Service Centers Inc. of Clearwater, Fla. Automotive Service Centers was formed in July 1998 and owns and operates 64 of the 104 Midas stores in Florida. The company has 420 employees and $40 million in annual sales.
Uiterwyk said his company plans to continue acquiring Midas stores, and wants to buy and consolidate other kinds of repair centers such as oil-change stores and body shops. He said the company wants expand into Georgia, North Carolina and South Carolina.
Uiterwyk said he sees his company as complementing dealership service departments. He said 5 to 10 percent of the work his stores perform is for dealerships.
'We are more convenient than the dealership and we are competing for the same customer, but we do a fair amount of work for dealers,' he said. 'There is plenty of business for all of us; there is enough to go around.'
MORE THAN MUFFLERS
Midas, best known for muffler service, performs light automotive repairs and maintenance work - the kind of work some dealers want to keep in their own service departments.
Midas provides service for brakes, exhaust systems, steering, suspension, air conditioners and batteries. The stores also perform maintenance services such as oil changes, fuel-induction service and replacement of headlamps, belts, hoses and wiper blades.
Uiterwyk said the company is 'playing around with' the notion of acquiring auto dealerships, but he declined to elaborate.
Before he created Automotive Service Centers, Uiterwyk spent 11 years with Ferman. He left Ferman in February 1998.
While there, Uiterwyk said he played a major role in the dealership's expansion from six to 15 locations. Among his duties were acquiring and moving dealerships, setting management policies and financing.
Uiterwyk said the reasons for consolidating Midas stores and other repair centers are fundamentally the same as those fueling the consolidation of dealerships:
It provides an exit strategy for older owners who started their businesses 30 or 40 years ago and are ready to cash in and retire.
Interest rates are low and capital is relatively inexpensive.
Computer systems make it easy to manage multiple stores as far as 100 miles apart.
Uiterwyk said consolidation lets the company provide high-quality, uniform service while realizing economies of scale in areas such as advertising and administrative costs.
'If three people are operating three Midas stores, all three are spending money on Yellow Pages ads; all three are sending out mailers,' he said.
'We can advertise all three stores in one ad and in one mailer. If we add a fourth store, we don't need to spend more. It's a more efficient process.'