A group of former Chrysler executives and dealers are looking to launch a new chain of used vehicle dealerships under the banner of AutoStar Superstores in the coming months.
The group hopes to cut the ribbons on their first five operations this fall in Albuquerque, New Mexico; Pittsburg, Texas; Portland, Oregon; St. George, Utah and Las Vegas, Nevada.
The AutoStar Dealer Network then plans to open an additional five used car dealerships per month for the next three months. According to George Lovato, Jr., the chairman of AutoStar’s Albuquerque operations, the new venture intends to ramp up their openings to ten per month.
The group is currently looking to recruit Chrysler and General Motors dealers whose dealership contracts with those companies were terminated as both automakers sought to cut costs as mandated by the federal government and U.S. Bankruptcy Courts.
Lovato says these dealers have the sales, service and parts operations in place and are natural choices for inclusion in the new network of used car dealers. “If you look at the disenfranchised dealer, a GM or Chrysler dealer, who has a very big footprint,” says Lovato, “that’s the guy we’re after.”
According to Lovato, these dealerships will benefit from AutoStar’s in a number of ways. The AutoStar Superstore network will offer its own certified used car program and floorplan financing. Dealers will also benefit from nation-wide name recognition along with vehicle warranties, training for their employees, vehicle procurement services, company-backed warranties and a Web presence.
Dealerships that join the network will be required to pay a licensing fee that will range from a modest $6,200 in rural areas to $37,500 in large metropolitan areas. Lovato says that new dealerships in major metropolitan areas should have the capability to sell a minimum of 100 used cars and trucks per month.
Before the recent auto industry meltdown, Art Laws owned Timberline Chrysler-Jeep-Dodge in Portland, Oregon and served two terms as the chairman of the Dodge National Dealer Council. During Chrysler’s reorganization, his dealership was rejected along with 788 other dealerships around the country. Laws now serves on the board of AutoStar and will reopen it as one of the organization’s first five dealerships in October.
Laws is optimistic about his new venture and says, “You’ve got service business, you’ve got flooring and more opportunity to make a profit on parts than you did before.”
The roster of AutoStar’s board of directors reads like a who’s who of former Chrysler executives. In addition to Laws, the board includes former COO of DaimlerChrysler Financial Services, Tom McAlear and retired director of dealer operations, Mike Yatsko.
AutoStar plans to open the doors at its first five locations on October 1.