Bob Hoy was ready for a reduced workload.
He already had given up much of the daily operation of the Hoy-Fox Automotive Group to his partner, Steve Fox, and his son, Steve Hoy. After 25 years as the dealer principal, Bob Hoy called in a consultant in the summer of 1988 to help them figure out what to do. The consultant recommended that Hoy prepare a succession plan so he could leave the business.
'It became very clear to us that I needed to retire,' says Hoy, now 67. 'I just wanted to get out of there, and they wanted to take it on. It was like before we went through this; we couldn't see the forest for the trees. This pro-cess helped us in a major way.'
Not that Hoy hasn't enjoyed his years at the helm.
He entered the business in 1973 after 14 years of practicing law. A client who was a car dealer invited him to become a partner in his Volvo dealership at a time when imported cars were starting to make a big splash in the U.S. market. A few months later, the partner left, and Hoy bought the dealership.
In 1979, he added Mercedes-Benz, and later he took on Volkswagen, Volvo, Acura, Infiniti, Toyota and Lexus. The Hoy-Fox Toyota-Lexus store sells the most vehicles of the three stores.
`A WONDERFUL LIFE'
Fox joined the business at the age of 21 and became a partner eight years later. Steve Hoy has been with the group for 13 years.
Says Bob Hoy: 'We've really had a wonderful life together.'
Hoy-Fox Automotive Group, which sells 4,000 vehicles a year and has about $108 million in volume, has been a finalist for the Time Magazine Quality Dealer of the Year award and has been nominated for other business awards. Hoy served as chairman of the Texas Automobile Dealers Association in 1997.
However, he says that as the business expanded and as each of the three began spending the bulk of his time at one of the three dealerships, they had less time to communicate with each other.
'We were not as attentive to our relationship as we should have been, and we began to feel this,' he says.
The succession plan called for Bob Hoy to sell enough of his interest in the business to Fox to make him the majority owner. Fox is now CEO. Hoy also is gradually gifting shares of the business to his son, who is now executive vice president.
Bob Hoy officially retired Dec. 1, but he will continue on in an advisory capacity to help handle insurance and legal affairs.
While he maintains an office at the group's headquarters, he is spending less time there and is comfortable leaving the business in the hands of his partner and son.
'The car business has experienced such a revolution, I don't think anybody really knows where it's going to go,' he says.
The move toward publicly held automotive retailers, the introduction of Internet selling and a higher focus on customer satisfaction have all created challenges for dealers.
Hoy says the Internet has changed buyers. 'Auto buyers are the most informed set of buyers in the world if they want to be,' he says. 'They know everything the dealers know, including our costs, and the result is slimmer margins.'
The lackluster performance of publicly held dealership companies on Wall Street makes Hoy doubt that the entire sector will go public anytime soon.
'Car sales are the last sector to be taken over by the Wal-Mart mentality,' he says. 'I don't think it ever will be. There is no other business like it.'
However, he says his dealership was contacted many times when public ownership was becoming popular.
'The bottom line is that at this time, no companies are buying aggressively,' he says. 'They are trying to save grace over what they have. But we certainly are going to keep all our options open and ride the wave of change.'
Hoy says an emphasis by manufacturers on improving customer satisfaction has been both positive and frustrating for dealers because of the way some carmakers have used it to determine vehicle allotments or for eligibility to maintain a franchise.
'The whole idea is to bring dealers to the reality that you're not going to maximize selling potential if you are not treating people the way they want to be treated,' he says. 'A car dealership is a high-profile business in every town, and they should be held to a higher standard.'
Dealers will continue to face new challenges, he adds.
'Anytime you have a revolution, there are winners and losers,' he says. 'The losers are those who don't want to change.'