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F&I Dealer of the Year

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Setting the Pace for 2010

August 2010, F&I and Showroom - Cover Story

by Editorial Staff

From Survival to Profitability

Marc Ikegami took a flailing Hummer store to the No. 1 spot in just two years. Now he’s vying for the magazine’s coveted F&I Dealer of the Year award. By Gregory Arroyo

When Marc Ikegami took the reigns of the Hummer franchise in Shoreline, Wash., in August 2007, he put in place a five-year plan to resurrect an ailing dealership. But it only took the store, now called Doug’s Northwest Cadillac-Hummer, two years to become the No. 1 Cadillac dealership in the state.

“It had gone through several failed sales, and employees felt a little uncertain about their future,” recalls Ikegami, a second-generation dealer. “My goal was to come in here and move very quickly to show the employees that we were here to stay.”

For the first 90 days of that year, Ikegami invested in repairs and new tools for the dealership. He also met with management daily to plot out his five-year plan to profitability.

Ikegami did achieve profitability by the end of 2007, although not by much. He also ended the year with several concerns. Gas prices were on the rise, which wasn’t good for a dealer whose No. 1 seller was the Cadillac Escalade. Ikegami moved fast as his store entered 2008, adjusting inventory and bolstering his fixed-ops department.

“I was scared. Everyone was. But we were going to keep our foot on the gas,” he says. “So, as everyone else in our market took their foot off the gas, we began to pick up market share, advertising opportunities and sponsorship opportunities that we would never have been able to lock up.”

Ikegami also swooped in on his competitors’ employees — people whom, under normal circumstances, he could never attract. He was looking for an all-star team to drive his store through what was shaping up to be a difficult year.

Keeping the pedal to the medal, Ikegami also started buying as much inventory and parts as he could from closing dealerships, which he was able to do at a discount. “We were either going to crash and burn or we were going to win the race,” Ikegami says.

The dealership finished 2008 on a positive note, but no amount of planning could prepare Ikegami for what was to come. The economy was worsening and he wasn’t sure how the rumors about General Motors’ possible collapse would play out. So, once again, he and his management team put together a three-phase survival plan for 2009.

The first phase was to cut anything that would not impact the dealership’s level of service. The second phase, which called for cuts to employee hours, inventory, advertising and staff, was tougher. The third phase called for the dealership to be stripped to the bare minimum. “The good thing is we only made it partially into phase two,” Ikegami says.

The only thing Ikegami didn’t plan for was the loss of his dealership when GM began reducing its network. Luckily, on the morning of the day the dealer letters were sent out, Ikegami received a call from his rep, telling him his store was not on the list. “If we were on that list, that was one thing I didn’t have a plan for,” he says.

‘The customer always comes first” became the dealership’s motto for the rest of 2009. The goal was to win Cadillac’s Standard of Excellence award every quarter. Ikegami says his store was successful in winning it most quarters that year.

By the end of 2009, Ikegami and his crew managed to increase sales of new vehicles by nine units, while used sales increased by 118. Things have been a bit tougher in 2010, but Ikegami had a plan for that, too.

“This year has been tougher as far as new sales, but that’s because we were doing anything we could to gain customers. Now the other dealers are doing the same,” he says. “But we knew that was going to happen, which is why our used sales are way up this year. See, for us to compete, we have to be innovative, which is exactly what we’re doing.”

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