Financial services giant JM&A Group, a powerhouse in the Southeast, is aiming to grow in the rest of the United States.
The main target for expansion is the West, and JM&A executives say they will consider purchasing smaller providers to pick up share in the finance and insurance market. But executives also have expanded the sales team and increased marketing and incentive budgets to help pitch JM&A's services to large dealership groups west of the Mississippi.
That market is largely untapped by JM&A, a unit of JM Family Enterprises, the Deerfield Beach, Fla., company founded by Jim Moran. The F&I unit got its start 32 years ago acting as a captive finance company for Toyota dealerships in Florida, Georgia, Alabama and the Carolinas that were serviced by JM's Southeast Toyota, exclusive distributor of Toyota and Lexus vehicles in that corner of the country.
"We have a 30 percent market share in the Southeast, and there is no reason we couldn't achieve the same market share over time across the country," said Colin Brown, CEO of JM Family Enterprises. "There is a lot of growth out there" even if industry volumes don't come back, he said.
That share -- or penetration rate -- means JM&A sells at least one product on three of every 10 new and used vehicles sold in the Southeast. On the East Coast, penetration is 8 percent. It's 6.6 percent in the West and even lower in major Western states such as California and Nevada.
"As we get beyond where we started, the opportunity tends to really stick out," said Forrest Heathcott, president of JM&A. "Those are some pretty key markets where there's a lot of population."
In the next five years, JM&A intends to boost penetration in the West to 10 percent, Heathcott said. He said it could take 15 years to match the 30 percent share of the Southeast.
"These are big decisions for dealers to make, and they don't come quickly," Heathcott said.
To accelerate the expansion, JM&A has "budgeted for some very thoughtful, formidable acquisitions," Heathcott said. He wouldn't share numbers but said JM&A already is in discussions with independent agencies and smaller insurance companies.
Heathcott said JM&A increased its marketing and incentive budgets about 25 percent each this year. Incentives typically include dealer rewards or trips.
Growth by acquisition would be a first for JM&A, Heathcott said. The acquisition target area includes California, Washington, Oregon, Arizona, Texas, Oklahoma and Colorado.
JM&A also is eyeballing expansion into South America. Some large Brazilian dealer groups have encouraged JM&A to set up shop there. The company has been exploring that in the past year, Heathcott said.
"For us, this whole thing is a great big numbers game," he said. "While we have a lot of people from outside the United States approaching us about venturing into other areas, we still see the biggest opportunity for us right here in the United States."
JM&A adds up to 10 new dealers to its U.S. client roster every week. The company has around 2,900 clients.
Recent addition Ganley Automotive Group, with 17 stores near Cleveland, started using JM&A in April. Ganley spent a year looking for a uniform F&I program for its stores, which had operated fairly independently.
"We needed to improve the level of profitability, consistency and compliance, and to have a coordinated and consistent process," said Ganley CFO Joe Fornal.
Since April, extensive training for Ganley's F&I staff has resulted in a big jump in F&I income, Fornal said. Ganley's average F&I income per vehicle retailed is now around $825, up from just under $600 at the beginning of the year.