Dealership operators are facing a complicated market, but Fernando Varela says the fundamentals remain centered on finding affordable vehicles, maintaining strong community relationships and making careful decisions about growth. The President and CEO of All-Star Auto Group joined today’s CBT Live to discuss the group’s seven-store operation, its acquisition strategy and how he is preparing the next generation of leadership.
According to Varela, affordability remains one of the biggest challenges facing dealers and consumers, particularly when it comes to finding new and used vehicles that fit buyers’ budgets. While interest rates remain elevated, he said OEM-subsidized rates on new and CPO vehicles can help reduce some of that pressure. But the bigger issue, in his perspective, is inventory that consumers can actually afford. That dynamic continues to make vehicle selection and pricing critical as dealers work to convert demand in a market where customers are increasingly sensitive to monthly payments.
Varela also offered a measured approach to dealership acquisitions since All-Star Auto Group recently added a Ford store in Texas. However, Varela said the group doesn’t aggressively pursue every opportunity that becomes available. He looks at the franchise, facility, market and long-term potential before deciding whether an acquisition makes sense. Additionally, location has become increasingly important, with the group looking to reposition some stores toward larger communities that could provide stronger long-term demand. Varela also warned against stretching the organization too far. Pulling top employees from successful stores to support new acquisitions can weaken both operations, making disciplined growth and talent management critical to a dealership group’s expansion strategy.
Succession planning is another major focus as Varela prepares the next generation of leadership at All-Star. His son currently operates four of the group’s seven stores, while Varela oversees the other three, creating a gradual transition rather than an abrupt handoff. Varela said manufacturers also need to recognize that succession is more than completing paperwork and should make it easier for dealers to bring sons and daughters into the business. He is also watching longer-term changes, including autonomous vehicles and their potential impact on smaller markets, while seeing service and parts as significant near-term opportunities.
