As a kid, Bernie Moreno "hated" car dealers and never wanted to be one.
He still doesn't want to be one if it means selling volume brands.
"At one point, maybe 10 years ago, I had this idea of having 100 dealerships and so forth," Moreno, president of Bernie Moreno Cos., told Automotive News. "But it was becoming too much brain damage."
The "brain damage" results from what Moreno says are the overwhelming number of factory performance targets many nonluxury dealers must hit to get cash from the manufacturer -- cash that is often crucial to a dealer's profits.
So late last year, Moreno -- an ambitious and savvy Colombia-born businessman -- decided to downsize. He sold most of his nonluxury dealerships, including a high-profile Nissan store in Ohio, for which he won financial support from Nissan North America.
Moreno sold another Nissan store and Kia, Mini and Acura stores. The sale of his Volkswagen store is pending.
It is an unexpected U-turn for Moreno, who last year at this time was on a fast track to expand.
Then, he owned 15 dealerships in Ohio, Kentucky and Massachusetts that generated more than $700 million in annual revenue. He was building a new Infiniti store in Coral Gables, Fla. He told Automotive News that he was open to adding stores, "anywhere between Miami and Boston, if it makes sense."
Today, Moreno, who turned 50 last month, has metamorphosed from an aggressive dealer willing to invest big in volume brands and drive heady sales growth to a pensive man who values the merits of a smaller realm focused on luxury brands.
Buy-sell adviser Mark Johnson said "portfolio purification," which is divesting from assets that a dealer is not comfortable operating, has grown increasingly common as dealers learn that the luxury store sales process and culture differs greatly from that of a volume store.
Johnson represents a dealer who is selling eight to 10 nonluxury stores in the dealership group. The dealer still will own 10 luxury dealerships and wants to add more, but luxury only.
"It's the dealer's mindset of how they're going to run their business, and when they decide they're not going to pound the customers [for deals] and they want to operate a different business, well, luxury is a really different business," said Johnson, president of MD Johnson Inc. in Seattle.
Johnson said the luxury culture is not "transportable."
"If you're a luxury retailer, your culture is totally different from a volume retailer," he said. "It all comes down to the sales process. It is so much different in the volume brands."
He said most retailers learn how to be good at one or the other, but it's difficult to operate both well because of the deal-based volume brand culture vs. a customer service-based luxury brand culture.
Bernie Moreno Cos. in North Olmsted, Ohio, will own 10 dealerships when the VW deal closes "soon." It will sell about 13,000 new and used vehicles this year, Moreno said. He projects finishing 2017 with about $896 million in annual revenue after making improvements at his remaining stores and adding the Infiniti store.