Robert Bassam credits his senior staff, his partnership with lenders such as Capital One Auto Finance and a focus on Internet sales as the main reasons Easterns Automotive Group is still around today.

Robert Bassam credits his senior staff, his partnership with lenders such as Capital One Auto Finance and a focus on Internet sales as the main reasons Easterns Automotive Group is still around today.

Robert Bassam doesn’t pretend to know everything about the car business. The plain-spoken founder and owner of Easterns Automotive Group says he was as surprised as any other dealer by the 2008 downturn. As the bottom fell out of the economy, he watched as the used-car empire he spent nearly two decades building began to crumble around him.

“That’s the only time I was ever truly scared,” Bassam says now. “I realized I might lose everything I had worked for.”

After being forced to close 11 of 16 locations and let go of hundreds of loyal employees, the group is profitable again. But getting leaner is only part of the story. Bassam credits his senior staff, his partnership with lenders such as Capital One Auto Finance and a focus on Internet sales as the main reasons Easterns is still around today.

Self-Made Dealer

Bassam moved to the nation’s capital from his hometown of Miami in the mid-1980s. He was working as a waiter when he got into the car business “accidentally,” reselling a car his father bought off the street on a whim.

After selling two more vehicles he purchased from a Salvation Army sale, Bassam was hooked. He set up shop in Arlington, Va., and spent the next six years building a wholesale operation. As his volume increased, he began expanding into larger lots, inadvertently attracting car shoppers.

“We just needed a place to store cars,” Bassam says, “but retail customers continued to roll in.” The would-be buyers he spoke with were looking for quality used cars, and many had been turned down by area dealerships.

For Bassam, the trend was too obvious to ignore. “We realized very quickly that the subprime market was underserved and mistreated,” he says.

Bassam founded Easterns Automotive Group in 1991 and the business grew quickly. He was soon booking 100 deals a month with Credit Acceptance and would expand his lender spread to include AmeriCredit Corp. and the now-defunct National Auto Credit. In 2003, he signed up with Capital One Auto Finance, which would become the group’s top finance source.

Robert Bassam’s cousin, Eiman Bassam, joined the operation in 2004. His experience at the now-defunct Auto-Mall Online provided him with a nice template for what would become Easterns.com.

Robert Bassam’s cousin, Eiman Bassam, joined the operation in 2004. His experience at the now-defunct Auto-Mall Online provided him with a nice template for what would become Easterns.com.

The Widening ’Net

The business was motoring along when Bassam’s cousin, Eiman Bassam, joined the operation in 2004. He had spent several years working up the ranks at the now-defunct Auto-Mall Online, an e-commerce site that was based in the Washington, D.C., area before it filed for bankruptcy in 2005.

Eiman’s experience there provided him with a nice template for what would become Easterns.com. “A lot has changed since then,” he says. “In 2004, Easterns had a Website — not as strong as it is now, but it was a presence.”

At its height, AutoMall Online — known more for its mall kiosks than its e-commerce strategy — marketed inventories for about 19,000 dealerships nationwide. Unfortunately, the dot-com investment bubble popped before it was ready to make its initial public offering. The most important lesson Eiman learned there was the importance of transparency when marketing online. That’s why Easterns was quick to partner with Carfax, and why each vehicle listed on its site boasts a link to a vehicle history report and a minimum of 20 photos.

“Our goal was to answer all questions before they come in,” he says. “‘Can we see the Carfax? Is it a one-owner vehicle? Can you move it to another location?’ And we found that people were willing to drive as long as one or two hours to get the vehicle they wanted.”[PAGEBREAK]

Crisis Mode

By early 2008, Easterns was riding high. The Website was well established, the group’s 500 employees and 16 locations were moving 1,000 units a month, and annual revenue was in the $250 million range. A popular ad campaign featuring pro athletes (see sidebar, next page) had made Easterns a household name. But when the credit crisis took hold, Robert Bassam began to smell trouble.

“I was buying cars for less,” he says. “Customers were ready to buy. But the lenders stopped communicating.”

Things began to unravel fast. Sales dropped off and difficult decisions had to be made. Bassam started closing his “boutique” stores and cutting costs across the board. He garaged his prized luxury cars in favor of a Hyundai Accent.

“The first real fall in the business came in 2008 and 2009,” he says. “I was a wounded duck.”

That could have been the end, Bassam says, were it not for his highest-volume lender. He joined Capital One Auto Finance’s Diamond Dealer program, an initiative the company undertook so it could continue offering flexible terms and special benefits to a select group of dealers.

Bassam says that, as he continued to retrench, Capital One’s support made the difference. He became an active member of the finance source’s dealer board and was among the first to sign up for its new prime program in 2010.

“The word ‘partnership’ is thrown around a lot,” he says. “True partnerships [are formed] in tough times, when they’re telling you you’re still OK, that you matter. Now, we’re having amazing earnings.”

Road to Recovery

When the dust settled, Bassam was left with his five largest stores and a new outlook. He has begun to rehire as much staff as he can support, but he doesn’t plan to expand again. Instead, he will continue to rely on the willingness of customers to travel great distances in search of their next car.

“If I could have one location for 500 customers, I would do it,” he says. “Look at AutoTrader.com. Their first search option is ‘50-mile radius.’”

The cousins agree that the Web-driven megastore model depends on transparency in all phases, as well as a quality product. Eighty percent of the available inventory is Carfax One Owner-certified, and they rarely sell trade-ins.

Easterns offers GAP coverage and a vehicle service contract from Warranty Solutions on every purchase. They’re willing to add the VSC with no markup, which helps to explain their 88 percent penetration rate.

“We like to max out the car, not the payment,” Robert Bassam says. Considering how far some customers travel, Eiman looks forward to a time when all phases of the purchase process can be safely completed online. “We complete the credit app in the showroom; that’s a privacy requirement,” he says. “But I believe that, in the future, customers will choose, buy and finance without ever touching the car.”

Meanwhile, Eiman’s Internet team works hard to maintain the Website and Easterns’ social media accounts. One of his staff members spends most of her workday updating the group’s Facebook page and answering customer questions via the Website’s chat feature. 

“If you’re not doing the research, you’re not a good customer,” Robert says of today’s Internet shopper. “My family doesn’t even go out to eat before checking [the restaurant] on Yelp. We call each customer two weeks after their purchase and ask if they can rate us on their favorite site.”

He expects the subprime market to continue to drive sales going forward. He wants his managers to continue to make transparency their No. 1 goal, even as they respond to whatever changes lay ahead.

“Robert is driven to succeed,” Eiman says. “He thrives on making other people successful. That leadership and love got us through some very, very tough times.”[PAGEBREAK]

SIDEBAR: Redskins Rides

In 2003, Washington Redskins linebacker LaVar Arrington was coming off three consecutive Pro Bowl seasons and was among the city’s most popular young athletes. Robert Bassam tapped Arrington (below) to become the first in a long line of Easterns Automotive

Group pitchmen. Other Redskins to appear include running back Clinton Portis, wide receiver Laveranues Coles and tight end Chris Cooley.

Stars from other sports, such as Washington Capitals star forward Alex Ovechkin, have joined their ranks in recent years. The commercials feature a maddeningly catchy jingle, with the athletes singing (or lip synching) “At Eastern Motors, your job’s your credit.”

The ads are ubiquitous in the D.C. area, and even Bassam is surprised to see the effect they’ve had on the local sports landscape.

“When Donovan McNabb was traded to the Redskins in 2010, The Washington Post ran an article asking whether he would star in an Easterns commercial,” he says.

In March, Easterns held “Redskins Rides,” a two-day mega sale, at FedEx Field. The dealer group sent 100,000 Capital One pre-approved mailers to promote the sale, which moved 140 units. Easterns also showcased some of its many philanthropic efforts, including participation in Operation Second Chance, a charitable organization that offers support for wounded veterans and their families.

“It was an all-in bet,” Bassam says. “You’re putting out a substantial amount of money for a two-day event. But it was a success, and we handed out 1,000 care packages for troops at war, as well as a car, and tickets to ’Skins games.”

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