Brickell group could open another store in its hometown soon but has designs on more Florida markets. BY JON MCKENNA
Miami-based Brickell Motors is continuing its recent aggressive growth trend, having since last year opened one dealership and bought another, acquired a Miami property with designs of another store site, and set its sights on eventual expansion into Tampa and Orlando.
For 11 years after President and CEO Mario Murgado and his partners bought then-struggling Honda and GMC dealerships in Miami’s Little Havana district, they increased sales substantially but didn’t expand the business’ footprint. Everything started changing in 2012, when they opened a luxury models store and broke ground 100 miles north on new Infiniti and Audi dealerships in Stuart, Fla.
This year brought the construction of a Mazda rooftop a short distance from Brickell’s original dealerships and the buyout of a family owned Cadillac store. The company also bought a well-known motel property in Miami out of foreclosure, and Murgado vows to build “something very unique and special” in retail automotive on the $7.8 million site.
Years Of Groundwork
How to explain the burst of expansion after more than a decade of seemingly just running the first dealerships?
“It may look to you like it happened quickly, but trust me, it was not quick,” Murgado said recently. “The reality is, back in 2001-02, I was already reaching out to manufacturers in the luxury world. But it’s just not easy. These are all mature markets [in Florida,], and in mature markets [OEMs] don’t award points very easily.
“I wrote to manufacturers regularly about my dealerships’ performance, but it took a long time.”
Brickell Motors now has seven dealerships selling Hondas, Mazdas, Audis, Infinitis, Buicks and GMCs, and a variety of luxury models ranging from Bentleys to Corvettes. Murgado cut his teeth in the business has a 19-year-old salesman who gravitated to the lot’s Cadillacs and Rolls Royces, and admits a natural affinity toward luxury cars.
Expanding With Own Cash Flow
The company’s expansion funding has been grown entirely internally by Murgado and his partners, Alex Andreus and Rick Barraza. Murgado, an energetic first-generation American who arrived in the U.S. just before his fourth birthday, feels dealers in general need to be more frugal and cautious about taking on debt.
“I’m afraid there’s a lot of guys who don’t create budgets. I’m afraid there’s a lot of guys who don’t have the right expense reports. I’m afraid there’s a lot of guys who do things by the seat of their pants.
“The world is too sophisticated to do those things. You have to be able to bring certain key metrics to the business and to every department, and to create an environment that’s about complete transparency and authenticity. You have to have good action plans and be on top of them on a consistent basis.”
Having bought existing dealerships and built them organically, he would rather develop from the ground up, “because I get to build with the process and the plans and everything that I like to.”
Ground-Up Easier Than A Turnaround
Certainly the purchase of the original Brickell (named for a district in downtown Miami) dealerships would give anyone cause for pause. Having only recently caught the bug to be an owner after 19 years in the business, Murgado thought about shopping out of state but decided “Miami was our home – so I went looking for the worst lot in our town.”
The Honda and GMC stores were owned by an absentee doctor and run by his daughter, and selling about 50 new and used vehicles per month. They were on track to lose $1.5 million a year and facing stiff, mature competition. Murgado paid $5 million and pushed his salespeople to be more aggressive and follow the fundamentals.
This year, he estimated, those two stores will sell about a combined 7,000 new and used vehicles.
By comparison, the Ocean Cadillac dealership that Brickell bought last year was in much better shape, a 33-year-old family business that was ready for a jolt of energy. Sales are up 45 percent there, he said, “and we’re only scratching the surface of what we might do.”
Emphasizing High-Touch Service
In the culture that Murgado is trying to create, “fundamentals” includes intense community involvement and charitable contributions, outreach such as hosting fundraisers and offering free meeting rooms in the Stuart dealerships to community board members, delivery of vehicles to homes and businesses (where Brickell hopes to identify other prospective customers), and letting techs communicate directly with repair customers rather than through service advisors.
In fact, his COO Andreus, and not the service manager or sales manager, is the one who responds to customer comments on Yelp. “I want one of the owners making that contact,” Murgado said of his longtime friend.
He insists it is not really that complicated to deal with as many OEMs as he represents and that in fact he’s hoping to represent new nameplates on future expansions. Too many dealers spend too much of their time on turf fights with OEMs, he feels; better to work with them.
Managing From Afar
Murgado makes it a point to work from his far-flung Stuart dealerships on Thursdays or Fridays, but otherwise communicates by videoconference and gives his GMs there a lot of leeway. “My job is not to run those stores all the time.” Both stores were sales-effective in their first year, and the Audi store won Magnum Elite status.
After more than three decades in automotive retailing, he believes the biggest change is the preparedness and qualifications of buyers visiting his lots and showrooms. “We don’t have as many people walking in, but you have to assume everyone is a buyer. They’ve already done all the research online about the vehicle they want, the financing and the trade-in value.
“You have to deliver them the experience they want. If the desire is to get in and out in two hours, then I want to deliver it.”
At 54, he has no desire to retire anytime soon but hopes his will become another dealership business handed down to the next generation. One son, Mario Jr., has worked a succession of bottom-up jobs with the company and recently was given the GM job at the Mazda store. Another son works for a Big Four firm and is studying for his CPA exam, but could end up working with Brickell someday, his father said.