Art Kelly likens car sales to the hardware business.
'You have the Home Depots and other large home stores coming in, but they're not going to put the Ace Hardware and True Value out of business,' says Kelly, 51, the dealer principal at Kelly Nissan in Oak Lawn, Ill.
'The small stores have to do things differently to adjust, but their level of service sets them apart.'
As a single-line dealer with one location - ever since taking over the business in 1980 and building a larger, modern store - Kelly has kept his sights on his customer base. He is a mile southwest of Chicago, and 60 percent of his customers are middle-class folks from the Windy City. He also has built a hometown presence by sponsoring Little League teams and through church functions and other community events.
In addition to vehicle sales, the dealership services 1,200 automobiles a month, a testament, he says, to his focus on customer care and service.
'When I started the business, I wanted people to buy cars from me rather than me working to sell to them,' he says. 'We built our reputation on service to our customers.'
That philosophy has served him well even during Nissan's recent struggles to compete with products that were due for an update. New cars and new versions of cars have done a lot for both Nissan and Kelly Nissan. The new Xterra sport-utility and an updated Maxima have generated interest, and the Altima will be redesigned with a 2.5 liter four-cylinder and a 3.2-liter V-6 engine for the 2002 model year.
Better products today
Keeping service first with a strong product should also help the dealership through any downturn in the economy, Kelly says.
'We have been successful and profitable every year,' he says. 'Now that Nissan has responded with redesigned products and better marketing, we expect to do even better. We are seeing a different type of customer than in the past, one who wants to buy Nissan rather than us providing incentives to buy.'
Kelly, an accountant, took over the business after holding office management positions at other dealerships.
'I stayed with a single line because I was working very hard to build the business,' he says. 'One of the stipulations was that I had to build a new building for the Nissan line.'
Although he is aware of the growth in dual dealerships and megastores, he has never felt pressured to expand. But he thinks manufacturers can and should help single-line dealers who are competing against an increasing variety of multiple-line outlets.
'Factories like single-point dealers because my life, my income, everything is tied up in servicing Nissan,' Kelly says. 'If you carry 10 lines, you obviously are not as dedicated to each one.
'I really think the single-point dealer has more of a challenge in today's economy and business atmosphere,' he says. 'It's easier for the consumer to go to the auto mall that has 10 franchises. If they are not particular about a car but have a certain price point, they can look at four or five makes.'
Exclusives deserve a break
Megadealers also find cost savings through consolidating expenses.
To balance that, Kelly believes manufacturers could take steps to show their preference for single-line dealers. For instance, if the factory wants to introduce new signs for dealerships, he thinks single-point dealers should be the first to get it. The manufacturer also should consider giving single-line dealers priority in getting new products.
With the increasing number of multiple-franchise dealerships, Kelly thinks those incentives are especially important.
While Kelly is on hand every day, he has given the position of general manager to his son, Ryan, 27. The senior Kelly has no plans to add any new franchises at this point. But he says that because of the strength of dealerships in Oak Lawn, his son may develop other ideas if a nearby business becomes available.
Art Kelly's reduced role in the business has given him time to share his expertise by serving on the boards of automotive and dealer associations. He is a former president of Nissan's dealer advisory board and now sits on the board of the Chicago Automobile Trade Association, the American International Automobile Dealers Association and the National Automobile Dealers Association.
He is especially proud of DriveChicago.com, a new automobile Web site created as a joint venture by the Chicago Automobile Trade Association, the Chicago Sun-Times and the Daily Herald of Arlington Heights, Ill.
Kelly believes his philosophy about how to run the business has served him well and encourages others to adopt it.
'Be responsive to your customer base,' he says. 'Provide the level of service your customers need. If you don't serve your customers well, you won't have any, no matter how many lines you carry or how large your business.'