GM Plan to Expand Minority Dealers Reliant on Acquisitions
In April, General Motors’ vice president of diversity dealer relations, Eric Peterson, announced that the automaker was developing plans to expand the number of minority-owned dealerships it operates in the United States by 10 by the end of 2016. However, according to an update from Automotive News, there’s a catch: Peterson, joined by Mark Rainey, GM’s director of development, at the National Association of Minority Automobile Dealers conference last month, said that the growth will come not from open points, but from acquisitions.
“Don’t stand in line waiting for an open point because it’s not going to happen,” said Rainey. “We have a very mature network, and we’re here to work with you to find those opportunities for acquisition.”
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Rainey suggested that dealers should be working on plans for succession and creating relationships with dealers in the markets in which they are interested in order to potentially acquire them later. Rainey noted that around 120 General Motors dealerships change hands by means of buy-sell deals every year.
Dealerships owned by minorities totaled 1,128 in the United States at the end of 2015, and 219 of those dealerships sold GM brands, per NAMAD’s census presentation. General Motors increased their number by 12 minority dealers in 2015 and has thus far added eight of the projected 10 through July.
Still, NAMAD President Damon Lester called 2015’s growth of 32 minority-owned dealers “modest,” and he called attention to the fact that only six of those dealers were African-American, saying, “We do have an issue with the state of African-American dealers. Mathematically, there is a problem.”
News Source: Automotive News (subscription required)