It was a trial by error for us as saw we had to forge a better system for ourselves. Wholesale losses are minimized and you have tremendous surges in revenue. This insures we turn anywhere from 60% to 75% of our inventory each month. For us, it’s 60 days on a non-certified vehicle and 75 days on a certified – anything exceeding that, the store has to be under the cap. Assuming the average price of those 150 units is $30,000 – that’s a $4.5 million cap. Let’s say we deliver 100 retail units a month on average – we’re only going to stock 150 BMWs. One, we capped our inventory at 45-days supply of sales. We looked at how the public dealer groups operated. So, we were making these huge year-end quarterly bonuses with BMW and then giving it all back in the first quarter because of our wholesale losses. The fiscal year has just closed and the OEMs aren’t ready to fire back up until President’s Day. Then it gets compounded in the Northeast – especially in the first quarter because the incentives slow down. BMW really started rebounding last year and into this year.įor me, that was when things really started to turn around and we began taking more care and having more concern over our pre-owned inventory.įor BMW, when they put on that last quarter push we would see a surge of $6 million to $10 million in pre-owned inventory for each individual store because were taking in all those off lease vehicles. It was really in 2011 through the midway of 2012 when the Germans started to falter and go through the recession – especially in the Northeast. We’re going to be diversifying our portfolio moving forward.Īt that time, in 2010, we had Japanese imports and German luxury brands. We don’t have any of those in our stable – which is something we plan on changing this year. Our brands really didn’t suffer the way the domestic brands did in 20. How did you pull that off?įirst of all, we tackled our pre-owned operations. In 2012, still a difficult environment for dealers, you were able to increase your revenue by $150 million. So, we took a hard look at what the public groups do in regards to inventory management, cash flow management, and frozen assets – areas that we can control and make ourselves a better group. We’ve spent that time getting our accountabilities in order because we want to be ready to continue growing. We’ve had a very good 24 months with solid growth. Michael, Open Road finished 2013 with more than $1 billion in total revenue selling more than 29,000 vehicles. A strong executive team has Open Road positioned well for the future as it continues to look for new dealerships and brands to add to its portfolio.ĭealer magazine recently spoke with Morais about his philosophy of leadership and the future of Open Road, as he was watching his two boys on a Sunday afternoon after coaching Little League baseball practice.Ī Dealer magazine exclusive interview with Michael Morais Morais credits his father-in-law, whom he says has a tremendous mind for business and a good heart, for mentoring and supporting him the last several years. It sold more than 29,000 vehicles in 2013 generating more than $1 billion in revenue. Today the group, which Ryan started as a Honda motorcycle dealership in 1972, has 16 dealerships in New York and New Jersey selling Acura, Audi, BMW, Honda, Mazda, Mercedes Benz, MINI, Smart and Volkswagen. Meanwhile, Morais has served on numerous dealer councils including a stint as chairman of Mazda’s national dealer council. During one of the worst recessions history when other dealerships were cutting back or closing, Open Road grew its revenue more than $150 million with disciplined processes. A couple of years later, he was running all three of Open Road’s Japanese import dealerships, moving the Honda store to number one in the country while selling more than 5,000 vehicles.Īfter overseeing the successful acquisition of several dealerships, Morais was named COO in 2010. Within a year, the Acura store was number three in the country while winning the brand’s coveted Precision award. The first month, the store – which had averaged 400 new sales a year - sold 100 new Acuras. Rodman “Rod” Ryan to let him run a newly acquired and troubled Acura store in 2001. Later, he convinced Open Road founder and CEO – and his father-in-law – W. Working only three days a week, he was averaging about 10 sales a month. Morais discovered he loved the automotive retail business. Majoring in accounting in college along with a lifetime of experience working in restaurants and bartending taught him how to interact with customers.
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