Serra Automotive, ranked number 12 out of the top dealership groups in the U.S. and number 6 out of the top privately held groups, is set to close on its acquisition of Bill Marsh Auto Group. When the transaction is completed in the coming months, Serra Automotive will receive three new stores representing eight franchises across Michigan.
On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Joe Serra, chairman of Serra Automotive, and Matt Serra, president of Serra Automotive, to share more details of the transaction and their expectations for the 2024 car market. The pair were recently featured on the CBT News Executive Profile show, where they provided an in-depth look at what it takes to build a great work culture within a dealership group.
Key Takeaways
1. The dealership group achieved impressive results during 2023, which the Serras attribute to the talent of the dealership group’s team. Nevertheless, last year was still difficult to navigate. High interest rates were the primary obstacle to retailer success, as were normalizing profit margins.
2. Matt Serra expects profit margins to decline further in 2024 but welcomes the challenge. Since early 2023, automakers have heavily increased production, allowing supply levels to return to normal, a trend analysts expect to continue for the foreseeable future. In the absence of any new vehicle shortages, car prices will also drop in the coming months due to the improved availability of popular models.
3. Joe Serra holds a deep respect for the Bill Marsh Auto Group, noting that Bill Marsh Sr. was one of his mentors in the car business. When the Marsh family decided to exit the business, they contacted Serra Automotive to see if they would be interested in an acquisition.
4. Matt Serra expects his dealership group to benefit from the Bill Marsh Auto Group’s wealth of knowledge and expertise in the retail automotive sector. He also believes that the operation partners within both companies will benefit from working together under a centralized system while also teaching each other new strategies to boost sales and profits.
5. The Bill Marsh Auto Group will continue to operate with the same employees, locations, and managers as before, although Matt Serra expects to see both companies continue to evolve over time. The only change in leadership is the replacement of three dealer operator-owners with two from Serra Automotive’s team.
6. Serra Automotive will continue its expansion efforts, although Joe Serra notes the company only considers acquiring dealerships with the capabilities to help the company grow.
"This year, our expectation is as supply goes up, you get pricing pressure...That makes the financials tougher. When that gets tougher, the business gets tougher. Our team is ready...but because of that, there's going to be a huge opportunity to really grow and have a big impact." — Matt Serra
