Monday, August 24, 2009

Used-car group is recruiting rejected dealerships

Several former Chrysler executives and dealers are helping recruit rejected Chrysler and General Motors dealerships to establish a used-car chain called AutoStar Superstore.

The plan is to open the first five stores Oct. 1 -- one each in Albuquerque, N.M.; Portland, Ore.; Las Vegas; St. George, Utah; and Pittsburg, Texas -- says George Lovato Jr., chairman of AutoStar Dealer Network in Albuquerque. Lovato is the founder of Rent Rite Car Rental Systems Inc., the eighth-largest car rental company in the country.

AutoStar Dealer Network plans to open five stores a month for the first three months and then increase to 10 a month, Lovato says.

"If you look at the disenfranchised dealer -- a GM or Chrysler dealer who has a very big footprint" for car sales, service and parts -- "that's the guy we're after," he says.

Lovato says AutoStar will offer dealers a nationally branded certified used-car program, floorplan financing, dealer management system software, employee training, vehicle warranties, a national Web site for consumers, vehicle procurement and other services.

Dealers who want to join will pay an initial licensing fee ranging from $6,200 in rural areas up to $37,500 in metropolitan markets. The metropolitan stores should be ready to sell 100 or more used cars a month, Lovato says.

Art Laws, owner of what was Timberline Chrysler-Jeep-Dodge in Portland, is on the AutoStar board and will operate one of the first five dealerships to open. Timberline was rejected when Chrysler cut 789 dealerships during bankruptcy. "You've got service business; you've got flooring and more opportunity to make a profit on parts than you did before," says Laws, a two-time chairman of the Dodge National Dealer Council.

The AutoStar board also includes Ken Zangara, vice chairman and a former Dodge dealer in Albuquerque; Tom McAlear, former COO of DaimlerChrysler Financial Services; and Mike Yatsko, retired director of dealer operations for Chrysler.

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