NEW HUDSON, Mich. — Jay Feldman started selling cars at age 15 at his dad's Chevrolet store in Milford, Mich. By 25, he'd partnered with his father on that store and become the dealer himself.
Since then, Feldman, now 47, has expanded Feldman Automotive Group to eight franchised dealerships in Michigan and Ohio, plus one standalone used-car store with a second one in the works. His dad has been out of the business for 20 years now, and Feldman has a new partner, at least in one of his dealerships: Hollywood star Mark Wahlberg. The pair bought a Chevrolet store in Columbus, Ohio, in July and renamed it Mark Wahlberg Chevrolet.
Three years ago, with his dealerships carrying different names, Feldman rebranded under the Feldman banner. The move, and the marketing efficiency that came with it, is paying off with higher market share. Feldman Automotive sold 22,000 new and used vehicles in 2017, and 2018 sales are trending toward 25,000 vehicles and $800 million-plus in revenue.
Feldman spoke to Staff Reporter Jennifer Vuong at Feldman Chevrolet of New Hudson here.
Q: What is the key to your success?
A: I've always been ambitious. I'm very competitive. When I sold cars when I was 15 to 16 years old, I had to be the top salesperson. I always wanted to go faster and do more things. That's followed me in my career.
I do have a great relationship with the manufacturers. I never looked at them as being the enemy. I always wanted another opportunity and, to do that, we had to work together. I made sure we had nice facilities and kept up with all the image programs.
That way, when another opportunity came up, it was hard for somebody to say no to me because we did everything that we were asked to do and then some.
And I love the car business. It's changing, for sure, but it's been changing since I've been doing this since I was 15 years old. Change is good, and it's going to continue to change.
How much has Feldman Automotive Group increased market share since the name change?
In Detroit and Lansing, anywhere from 200 to 400 basis points a year. It's not stopping. We stock a lot of cars. We take as many cars as we can, used and new. We don't let off the gas with the marketing, and we have a great team.
What is the group doing to combat slowing industry new-vehicle sales?
We're really focused on pre-owned. Three years ago, pre-owned was probably 25 to 30 percent of our business. Now it's north of 40 percent. In Columbus, it'll probably be 1-to-1 to be 50 percent of our business or more. Focus on pre-owned and focus on service, parts and collision. Do the best we can on the new-car side and finance and insurance products.
Is Feldman Automotive doing anything to reduce expenses?
We continuously look at our expenses. That's ongoing. But we're really focused on growing our top-line revenue, and, unfortunately, you've got to spend some money to make some money. We constantly push the marketing dollars, and we don't have any anticipation of letting off the gas.
Why did the group start a standalone used-car business?
I had a Hyundai dealership in Waterford, Mich. We had this great location, beautiful facility, and it just didn't work as a Hyundai store. We knew it was a great pre-owned market. Traffic was amazing. So we made the decision to chase the pre-owned business exclusively and eliminate the Hyundai franchise. It turned out to be the right decision. We stock a couple hundred cars there, and we really focus on trucks. We think it could be a lot bigger than it is today — regional or national. We're going to take it one step at a time and keep building.
You were on a panel recently called, "Not Your Father's Auto Dealership (Get Big or Get OUT!)."
It was about the evolvement of the industry, from ride-sharing to subscription, manufacturer relations. A lot of these things people have invested a lot of money in and are chasing — school is still out on whether they're going to work or not. In concept, some of them make sense. But then when you put a pencil to them — we've looked at subscriptions; I don't think they work financially. That's a certain segment of the market where nuances of it make sense — where if somebody had a convertible in the summer and wanted four-wheel drive in the winter.
But I really don't understand the concept of switching out your car two or three times a month. I drive a demo and I'm not lazy, but I dread having to take my garage door opener out of one car and put it in another and unplugging my iPhone cord. We've looked at the numbers; it just doesn't work financially. And I don't think it works for the manufacturers either, but they have deep pockets and can afford to experiment.
Is the group investing a lot in the Mark Wahlberg Chevrolet rebranding?
That is an absolutely beautiful facility. We have very little to do there. As far as rebranding with Mark, we're doing some unique things.
We installed this mirror vision in the store so, not only can we promote GM items like products and service specials, but we can promote some of the things that Mark has going on in his life, from movies to Instagram, all the social media he's involved in. It's constantly updated and live. We're even doing a thing called "virtual visitor," where Mark can, [through technology that works] like a giant FaceTime, interact with customers.
What's Mark like as a business partner?
He is a very fair person. He came from nothing. He's a very loyal guy. I see the way he treats the fans and even the way he interacted with our employees at the dealership. He's just a really nice person and hasn't forgotten where he came from. So we're having a lot of fun. I haven't had one moment that I regretted it. And we'll probably go on to some other opportunities.
Is becoming a larger dealership group a way to a long-lasting future in the business? Can you still be a single-point store in today's environment?
You can. There are single-point stores that have become incredibly successful. It's just what your game plan is. For me, growing has always been something I've wanted to do. But strategic growth. Growing to grow is not a smart business plan. But looking at every deal and taking your time and making sure that that is the right deal and that you're buying it right and you think it's got upside and not overpaying, those are things that you have to be careful [about] when you're growing. I see a lot of groups in this market growing to grow, and I scratch my head looking at some of the acquisitions.
Describe your leadership style.
One person can change everything. You have to have the right leader in a dealership. Without that, it all kind of crumbles. You have to have somebody that's leading the charge every day.
We've really focused on the top down. We have a great chief operating officer, a great CFO. We have somebody that oversees all of our fixed operations for the group. And we have a marketing department, HR.
So what we do is find the right leader in every area of the business. We have great general managers in each store. When you have really good people at the top, they tend to push the agenda down and make sure that they have the right people in every seat — enough people, the right people.
I really respect the pecking order. When you have a general manager at a store, you let the general manager — even if I don't like something — I'll let them be the bad guy or lady. We try and follow the pecking order and that way you keep the business organized. Everybody should have one boss. When people start having two or three bosses, that's a problem.
Do you foresee big challenges in how you do business in terms of what's going on in the country?
There are always going to be challenges. I don't see anything specific. We know we're going have a couple of interest rate hikes this year. But the stock market keeps trudging along. Companies are making a lot of money. We still see traffic. I don't see any real hiccups in the business, but we're geared for that, too. If things slow down and the SAAR got cut drastically, everything is very controllable. We could cut back our advertising. We could cut back our stocking of inventory. So we have the ability to be flexible if something drastic happened.
Does anything keep you up at night? What's the first thing you think of when you wake up?
The first thing is how much traffic do we have coming in the door. What do our closing ratios look like.
Is there any big threat for retailers today?
I don't think there's enough information on any one of the things that we could classify as a possible threat to really know if it ultimately will be a threat. A lot of it is down the road.