Larry Morgan, CEO of Morgan Auto Group in Tampa, Fla., became a car dealer seven years ago after selling his 600-store tire and auto-service business.
He is building an automotive empire in Florida and grooming his 32-year-old son, Brett, to take over the business.
Morgan's operation ranks No. 102 on the Automotive News list of the top 125 U.S. dealership groups, with retail sales at 10 stores in 2011 of 6,749 new vehicles and 5,160 used. After adding an 11th store, he targets sales of 12,000 new and 10,000 used vehicles in 2012. He wants to buy more dealerships but they have to be within driving distance of his current stores.
Morgan, 68, was interviewed by Staff Reporter Diana T. Kurylko.
Q. You got into the automotive business after running a successful tire business, right?
A. I built a company called Tires Plus from 35 tire centers to 600 all around the United States. We did $1 billion in sales annually, had 8,500 employees. I was Bridgestone's largest customer in North America, and they bought my business in 2000. I got bored being retired so I got into the car business with my son.
Why did you decide to become a car dealer?
I had planned to be a silent partner in a Honda-Volkswagen store in Tampa. One morning I decided to drop in on a sales meeting, and I was not very impressed with what I saw and heard. I thought maybe this was just a bad day for the management team. I went back a couple weeks later and saw the same thing. Not having direct hands-on knowledge about the sales process and vehicles and things of that nature, I realized that I might not be able to deal with all the nitty-gritty things, but I certainly had enough common sense and general knowledge of business to know that there was a better way. That is how I got smitten into the car business.
When was this? Did you buy the Honda-VW store?
This was in 2004. To make a long story short, my son worked for a big national company out of college for a couple of years. He and I had always planned to be in business together. The plan was he would join the tire and auto center business, but we sold it. He came and started selling cars, and consequently we went out on our own. I sold my 50 percent interest in the Honda and Volkswagen store. We bought a Toyota store and have been building our network ever since.
Where was your first Toyota store, and how is it doing?
In 2005 we bought Precision Toyota in Tampa and changed the name immediately to Toyota Tampa Bay. Business was rocking for several years -- we were selling 450 to 550 new Toyotas a month and 250 used cars. When the recession hit, we took a hit -- as well as in 2009, 2010 and 2011. The store has always done very well, and it has a good market.
What is your formula for success?
In the tire business going from 30 stores to 600, I certainly had experience in growing a business, and I found a lot of similarities between the tire and the car business. I am not a hands-on car guy that has a lot of practical day-to-day knowledge about selling cars. I have always been involved in the people side and getting people around me that know what they are doing and have good business practices. We have a very strong organization with very little turnover. We have more people standing in line to work for our company than we have places.
How is your son, Brett, involved?
He went through every chair that you can in a dealership. He has worked in the fixed side. He sold cars. He was an F&I manager. We were very disciplined and agreed that he had to stay in those positions long enough to truly know what he was doing and be good at it, not just a short-term tenure.
How old is your son? Are you grooming him to take over the business?
He is 32 and absolutely. He is very mature for his age, so we have that part behind us. He has a reputation in our company that he just didn't inherit the position; he earned it. He works well with all of the people in our company. I still do the acquisitions and the new-store development and oversee most of the financial aspects. But he is participating and growing and is part of every decision we make. He brings a lot to the table that we don't have elsewhere in the company.
A big thing is the Internet and social media and all of those new ways of marketing and doing business. He is light-years ahead of all the rest of us. He brings that ingredient to our company along with all the more traditional abilities that go with running a car store. He loves the business, and he understands how important people are -- our customers and employees. He is obsessed with building a business for the long term and doing things the right way. He works very hard. He is a 24/7 guy and takes great pride in our organization. I am very proud of him.
Is there a long-term plan for turning over the business?
Yes, there is. I have several nonautomotive businesses. I am not the retiring type. I love to get up in the morning and go to work. I look forward to the day where I can spend less time working and more time relaxing. We do not have a definite date. We are constantly moving things from my plate to his.
How did you decide what stores you were going to buy? You have Toyota, BMW and Mini -- some very profitable brands.
It was a plan of attack. It didn't accidentally happen. Not being an automotive or a car guy, I spent a lot of time analyzing brands that I thought were not only good brands but had a good life to them. I paid a very fair price for a number of those stores.
What are your weakest franchises?
Buick, GMC and Mitsubishi in Gainesville. My Buick-GMC store is in a fairly small market, and Buick and GMC have somewhat limited market share. I do not want to give the impression that it is a bad store. The other stores are very high-performing. We sell a lot of cars, and we do a lot of fixed business, and we make a lot of money.
How many Buick and GMC vehicles do you sell annually?
About 450 between the two brands.
Are you shopping for new stores?
I get that question a lot, and my answer is always the same. I have done the airplane thing. I had stores from California to North Dakota to New Jersey and Florida. For many years I was a road warrior visiting my stores and at this stage in my life, I am not prepared to do that. My philosophy is: If I can drive to it, I am interested. My son and I have kept to that philosophy.