In July, Zeigler Auto Group acquired Elhart Automotive, which includes Elhart’s Kia, Hyundai, Nissan and GMC dealerships. On this episode of Inside Automotive, host Jim Fitzpatrick is joined by Aaron Zeigler, president of Zeigler Auto Group, to discuss the acquisition and the current state of his businesses’ operations.
With its acquisition of Elhart Automotive, Zeigler Auto Group has now grown to include more than 40 storefronts representing multiple franchises. Its new Kia dealership represents the first time that the company has worked with the franchise. “Kia is very hot right now,” Zeigler proclaims, “and they have been for the last couple of years…it’s something that we’ve been eyeing.” In the coming months, the dealership group is also planning to purchase two additional Subaru franchises, a brand which Zeigler notes, “We’ve done very well with…”
The purchase of Elhart Automotive succeeded thanks to the success Zeigler Auto Group found in the post-COVID car market. However, despite the company’s focus on growth and expansion, the purchase follows a two-year break from the mergers and acquisitions space, which Zeigler notes is the longest in the organization’s history. The buy-sell market has been challenging for both sides since the pandemic: while the sector has seen unexpected strength, finding deals that made sense for all parties was a rare occurrence. But as 2023 proved to be a lucrative year for retailers, buyouts became more attractive investments, a factor that encouraged Zeigler, and many dealers, to re-visit the M&A space.
When Zeigler Auto Group first expanded into multiple locations, Zeigler recalls that most of these new storefronts were underperforming at the time of purchase. As a smaller company, the organization’s growth options were limited. However, rather than looking at these acquisitions as a means of driving revenue in the short term, Zeigler focused on turning these businesses around, re-hiring, re-training and re-organizing as needed to make the brand successful. This strategy proved to be an essential ingredient for the dealership group’s growth and allowed it to eventually acquire more successful stores.
Zeigler acknowledges that it is challenging for smaller dealership groups to expand. Larger conglomerates often have better relationships with manufacturers, who have the first right of refusal when it comes to acquisitions. Additionally, the more businesses under the same umbrella, the more brain power can be leveraged to drive growth. This was especially important for Zeigler Auto Group. “We share a lot of ideas internally at our organization,” Zeigler notes. “No one person has all the right ideas, but collectively, as a group, we always come up with the right answers.”
Going forward, Zeigler Auto Group is cautiously optimistic about the future. Although the automotive industry is still facing headwinds caused by the COVID pandemic, Zeigler recommends planning for the future rather than worrying over the present. “Everything I do, I look at for the long haul, so I’m not looking at what’s gonna happen in the next six to twelve months,” he concludes.
