Campbell Automotive Sells Off Ford, Mazda and Nissan Dealerships : Cars: New owners will discontinue the chain’s no-dickering price policy. Campbell will concentrate on its Saturn franchise.
Campbell Automotive Group, the innovative chain that operates Orange County’s only one-price auto dealerships, is selling its Ford, Mazda and Nissan operations to concentrate on its Saturn franchise.
Industry insiders placed the value of the sales at about $10 million. The three dealerships employ about 170 people, and company President John Campbell said he has been told by the buyers that no layoffs are anticipated.
But there will be one immediate change: None of the new owners will continue the Campbell chain’s one-price policy in which the discount prices posted on each car are not subject to negotiation. Most car dealers believe that intense competition makes no-dickering policies unprofitable.
Campbell, 40, said Thursday that most of the proceeds from the sales will be used to repurchase the half interest in Campbell Automotive Group he sold in 1988 to Lex Service PLC, Great Britain’s largest auto dealership chain.
When the repurchase is completed in December, Campbell will own 95% of the remaining company. Steve Coleman, general manager of Campbell Group’s Saturn dealership in San Juan Capistrano, will own the remaining 5%.
Campbell Automotive will retain an auto body shop in Fountain Valley and the Saturn franchise, which includes three Saturn dealerships and a Saturn showroom at Westminster Mall, one of the nation’s few auto showrooms in a retail mall. Together, those facilities employ about 150 people and had $55 million in revenue last year.
Lex, which owns 120 car and truck dealerships in Great Britain and a minority interest in France’s largest car dealership chain, had asked to be bought out so it could concentrate on its fast-growing European businesses, Campbell said.
He would not disclose the value of the three deals that will be announced today, but said they will generate sufficient cash to enable him to pay $6.7 million to Lex and have enough remaining to finance future expansion of his Saturn franchise.
Campbell Ford in Garden Grove, one of the largest Ford dealerships in the nation, is being acquired by Irvine-based Webb Automotive Group, which has seven other franchises in Irvine and Cerritos. Orange Coast Auto Group in Costa Mesa completed its purchase Thursday of Campbell’s Mazda dealership in that city. The purchase gives Orange Coast six franchises.
Meanwhile, Campbell Nissan in Huntington Beach will be operated by several former managers from the Ford dealership. The managers have an option to buy the Nissan operation.
The three dealerships had combined revenue of $97.4 million last year. The Ford dealership accounted for $53.5 million.
Campbell Automotive, which began with a single Volkswagen dealership in Buena Park in 1965, had a total of 12 franchises at its peak in 1989. In 1988 the privately owned company raised $13.5 million for expansion by selling a 50% interest to Lex. With that cash, Campbell bid successfully for the Saturn franchise in Orange County. In recent years, Campbell Automotive had repaid about half of that purchase price.
While Lex is only breaking even on its seven-year investment in Campbell’s operation, the company’s chairman, Sir Trevor Chinn, said in a prepared statement that the relationship was worthwhile because “of the opportunity we have had to learn from him about the U.S. market, particularly about the Saturn franchise.”
Lex, in fact, has set up three used-car dealerships based on Saturn’s fixed-price system.
Campbell said he wants to concentrate on Saturn because it is “the way the industry needs to go in the future.”
Long a critic of the auto retailing industry, he says traditional auto dealerships are too pushy and confrontational. He says that his experience with Saturn, which encourages dealers to adopt non-negotiable pricing policies, has convinced him that car buyers welcome the no-hassle approach.
“We have the highest profit margins in the business, and our customers are the most satisfied,” he said. “Why would we want to keep selling cars the old way?”
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John Campbell at a Glance
* Age: 40
* Title: President-CEO
* Company: Campbell Automotive Group
* Business: Automobile dealerships
* Education: Bachelor of arts degree in economics from UCLA, 1976; master’s in business taxation from USC, 1977.
* Background: Tax accountant at Arthur Young & Co. in Los Angeles before joining A.E. Campbell & Co. in 1978 as corporate controller. Promoted to vice president of finance in 1979 and president-CEO in 1980. Company name changed to Campbell Automotive Group in 1984.
* Residence: Irvine
* Personal: Married to wife, Catherine, and has two children, Taylor and Logan.
* Innovations: Instituted a one-price, no-negotiation sales policy at all dealerships.
* Dealerships owned: Saturn of Santa Ana, Saturn of San Juan Capistrano, Saturn of Huntington Beach, Saturn of Westminster Mall.
* Dealerships being sold: Campbell Nissan and Campbell Mazda in Huntington Beach, Campbell Ford in Garden Grove.
Source: Campbell Automotive Group
