Rev it Up

Walker Ford, like many other auto dealers nationwide, took a big sales dip in the recession.

But the family-run dealership, on U.S. 19 North in Clearwater, is now into rebound mode despite a ream of obstacles, from high unemployment to a construction quagmire that clogs its entrance. The firm, founded in 1957, reported $62.65 million in 2010 revenues, a 33.1% jump over 2009 revenues of $47.08 million. Sales were more than $100 million a year as recently as 2006.

The bounce back stems from a combination of factors, Walker Ford executives say. And Walker Ford isn't an aberration when it comes to Gulf Coast auto dealerships that had a strong 2010. Others that posted big gains include Sarasota-based Gettel Automotive, which was up 32%, and Johan Marazzi Nissan in Naples, which was up 28.8%.

A big factor in Walker Ford's success is the 2010 Ford Motor Co. resurgence.

Moreover, Walker Ford says its fleet-services unit, a big revenue driver, has finally returned after a recession-forced hiatus that lasted three years. “Our fleet business literally almost stopped,” says Mary Avedisian, the dealership's controller. “But this year it has come back strong.”

Walker Ford's fleet clients buy everything from hybrid cars to trucks. Clients now include Bright House Networks, several local public utilities and Enterprise Rent-A-Car. The dealership's new trucks division has been especially good for fleet-services, says Avedisian. New truck sales for fleet services made up 40% of Walker Ford's total new truck sales last year.

A third factor in the robust 2010: the dealership says it has refused to turn into a high-pressure sales operation, even in the recession, and that has led to repeat and referral business. “When it comes to selling cars,” Avedisian says, “we don't do the nightmare.”

Family patriarch E.B. “Doc” Walker founded Walker Ford. Two of his sons now work there; Gary Walker runs the parts and service department, while Frank Walker oversees the entire dealership. Frank Walker's son, Weston Walker, has worked at the company for about four years.

The employee count grew steadily for the dealership's first few decades, then ballooned to 160 people by 2007, before the auto industry crashed. Avedisian says the work force now hovers between 102 and 108 employees, a 30% drop.

The recession has forced the company to become more careful about hires, like a lot of other businesses. Avedisian says the company has begun to focus on cross-training employees, to help ease the crunch of a smaller staff.

“We became more efficient,” says Avedisian, who has been in the auto sales business since 1977, and with Walker Ford since 1997. “We pay a lot more attention now to how we hire and who we hire.”

Congestion overload
Efficiency aside, a repeat performance of last year could be difficult in 2011.

For one, the dealership location, once an advantage, has turned into a thorny problem. Walker Ford has been in its current home, in a high-traffic area of U.S. 19, since 1991. The five-mile radius that surrounds it is home to several other auto dealerships.

The trouble, however, began in 2009, when the Florida Department of Transportation began work on a five-year, $162 million construction project on U.S. 19. The project will turn U.S. 19 from a limited-access highway to a freeway. The goal is to ease congestion, but the day-to-day impact has crippled many businesses on the road.

That includes Walker Ford, which is right now in the thick of the construction.

“This project has created an interference on our business,” says Avedisian. “Some people just don't have the desire to come in here and buy a car because it's so difficult.”

Walker Ford has taken some steps to combat the issue. For instance, it rented a huge billboard at the foot of the entrance, where it advertises the dealership on both sides. That costs about $3,000 a month, says Avedisian.

Another challenge is how to generally reach customers, not just U.S. 19 travelers. That process has gone through several changes in the past few years. Walker Ford used to advertise through a lot of newspapers, and some TV. Now it advertises mostly through the Internet, some TV, but very little in newspapers.

Walker Ford was also heavy in the local Yellow Pages phone book. It took out big ads on the automotive pages for several thousand dollars a month through the end of 2010. “That wasn't generating any business,” says Avedisian. “We cut that out all together.”

In the zone
Finally, a looming challenge for Walker Ford is inventory — or the lack thereof. It's the flip side to a stellar year: the dealership sold so many vehicles, the corporate office struggled to meet the demand at times, says Avedisian. For cars, the Fusion and Focus sold especially well last year, while the F-150 was tops for trucks.

The inventory problem is somewhat out of Walker Ford's control. The system, says Avedisian, utilizes several zones in regions throughout the country. So, for example, if all the dealers in the Northeast Zone sell a lot of Fusions, all the dealers get more Fusions in the next delivery.

The Southeast Zone, which includes Walker Ford, struggled last year. That means Walker Ford gets less vehicles in 2011, despite its strong 2010.

Avedisian says the dealership considered buying some new Fusions and Focuses from other dealers to take back some control. But Walker balked when the dealers charged a price over invoice.

Walker Ford isn't the only Ford dealership to report big growth numbers, both in 2010 and the first half of 2011. In fact, Ford Motor Co. sales rose in the 2011 second quarter, the company says in its most recent earnings report, from 1.4 million vehicles in 2010 to 1.5 million this year.

But the uptick in sales came at a price. The company's profit fell 7.7% for the quarter, from $2.55 billion to $2.4 billion. Ford pinned the slide on an increase in the cost of materials; higher expenses to build better cars; and a decrease in international sales.

While certainly challenging, Walker Ford executives don't believe those issues will be insurmountable on the way to another big growth year. “You do have to pay attention to everything that's going on,” says Avedisian. “But I don't anticipate it slowing down.”