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AutoWay chain has luxury on radar

President Michael Maroone says his company wants to acquire BMW and Mercedes dealerships.

By JAMES THORNER
Published June 22, 2006


AutoNation Inc., which markets most of its 18 Tampa Bay area dealerships under the AutoWay brand, is chasing a bigger chunk of the region's luxury car sales.

The Fort Lauderdale-based chain of 268 dealerships across the country is scouting further acquisitions in Tampa-St. Petersburg. Tops on its wish list: BMW, Mercedes and Acura dealerships.

The strategy was outlined Wednesday by AutoNation president Michael Maroone. In an era of fuel-sipping and narrowly profitable economy cars, the big bucks are in the upscale models. The most luxurious sell for two or three times what they cost to make.

Luxury's been a winner for AutoNation: Sales of Lexus, Mercedes, Lincolns and other glitzy models have grown from 11 percent to 22 percent of the company's business.

In Tampa on a cross-country swing through AutoNation's top markets, Maroone sat down with the St. Petersburg Times on Wednesday:

You've recently doubled your sales of luxury cars and talk about acquiring more such dealerships in the Tampa Bay area? How is the process going?

It's generally takes about a year to buy a store. We have people who go and knock on doors and then chief executive Michael Jackson and myself go look. We clearly have an ambition to increase our luxury presence in this market. BMW and Mercedes are two we're really after.

Gas prices being what they are, how will you steer the company to cater to customer demands for greater fuel economy?

Even with the increase in fuel prices, the average fuel consumption is about the same as last year. But we are seeing some consumer preference shifts. The manufacturers will be introducing a whole new wave of small cars. But we think there will still be a place for Suburbans and big sport utilities to pull your boat and move your family. The crossover segment is growing: sport utility vehicles on car chassis.

How important are hybrids cars to the business equation?

Although Toyota has clearly got a jump-start with these, at this time the financial equation for customers isn't favorable. It's more a way for consumers to demonstrate their social consciousness. Hybrids will become more attractive if either technology costs drop or fuel costs go up.

How much of an impact are Ford's and General Motors' financial troubles having on AutoNation?

The domestic market share loss has changed the business. We have tried to adjust and change our footprint. Our ideal mix is one-third domestic, one-third high-volume foreign cars and one-third luxury.

Tell us about some hot cars for the next year.

The Dodge Caliber is about as hot as it gets. Mercedes is hot. BMW continues to be incredible. You're getting the Honda Fit, the new Toyota Yaris, the Nissan Versa. You've got a tremendous battle going on.

AutoNation is the biggest auto retailer in the United States. Where do you go from here?

We're still only about 3 percent of the industry. We believe there's tremendous growth opportunities out there in the U.S. I think you'll see us grow our franchises in Florida, Texas and California where we have good brand recognition.

Tell us about your celebrity pitchmen such as Dan Marino in Florida, John Elway in Colorado and Roger Clemens in Texas. Do you always choose athletes?

Dan was with my old dealerships. He happened be a neighbor of mine; I started to loan him cars and it grew into a relationship. They've got to be squeaky clean. They've got to stand the test of time. You want to be careful of drugs and alcohol or any kinds of perversion.

James Thorner can be reached at thorner@sptimes.com or (813) 226-3313.

[Last modified June 22, 2006, 00:47:02]


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