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The Globe and Mail: How three brothers built one of Canada's largest dealer conglomerates

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Written by Jeremy Cato

Ajay Dilawri, one of three brothers who own and run Canada's large auto retailer conglomerate, the Dilawri Group of Companies, glides quickly from his seat at the head of the table, hand extended.

Soft-spoken and gracious, Dilawri looks to be the living embodiment of a Porsche showroom - tailored blue blazer and grey slacks, white pocket square, crisp white shirt and dark tie. Not a thread or a hair is out of place.

The setting is the corner boardroom at Porsche Centre Vancouver, its glass walls offering a sweeping view of several million dollars worth of premium cars below. This entire experience seems a reflection of the Dilawri story and corporate plan: efficient, professional, courteous, respectful. The Group today includes 49 dealers, 29 automotive brands and 2,500 employees stretched from British Columbia to Ontario. A 50th store will soon join the fold - Queensway Audi in Toronto -- and some time in January, Dilawri will very likely have expanded "east of Ontario."

The Group is a private company, but Dilawri confirms that revenues exceed $1-billion annually and they're growing. The family business has come far in the 30 years since Ajay and brothers Kap and Tony started with a Honda dealership in Saskatchewan. You very likely have driven past more than one of the Group's stores - whether it be 401 Dixie Mazda in Mississauga, Bentley Calgary or Fiat of Regina. Their secret?

"Invest in people and train and train and train to ensure best practices," he says. He makes the business sound easier than it is.

In a report last year, DesRosiers Automotive Consultants noted the average return on sales of a dealership in Canada is 2.25 per cent, or a $22,500 net profit for every $1-million of revenue, or between $1,000 and $2,500 per new car sale. Not a great return given the complexity of the business.

Still, the industry is growing. In 2013, new car retail sales in Canada topped $90-billion for the first time ever. Despite its growing size, the dealership business is not a license to print money.

New vehicles are increasingly sophisticated, requiring more staff training. And customers are smarter than ever, too. J.D. Power and Associates says that 61 per cent of new vehicle shoppers know exactly which vehicle they want long before setting foot in a dealership. Ninety per cent of those drove away with that vehicle.

"Put another way, of the 1.7 million vehicles sold in Canada last year, nearly one million of them weren't 'sold' at all, but rather ordered and delivered," J.D. Power notes. The successful dealer, then, needs sales consultants skilled at walking the customer through an efficient and friendly purchase.

"The showroom is the place where the customer will experience the car, the quality of the car, the materials, the fit and finish, how it drives and feels on the road. Those are things that cannot be replicated over the Internet," Dilawri says. "It's our job as an organization to create a professional transaction, an experience."

At first glance, it seems as though the Dilawri brothers have divided up their retail empire into three regions, with Ajay in Vancouver, Tony in Calgary and Kap in Toronto. But that's not the case, says Ajay Dilawri. The brothers are in constant communication, talking perhaps eight or 10 times a day. They set the overall vision for the Group and nurture the culture.

"Our goal is to create loyalty and to retain customers and employees for life," he says. "It comes down to retention. Retention of the customer. Retention of the employee. That's how we measure our success."

The Group's advantage today: size and scope.

"Our diversification gives our employees the opportunity to move around, to create a career - to start as a lot boy, move into the parts department and advance in the dealership to general manager or general sales manager."

What the Dilawri Group will not do is go public, become a public company, even though this seems to be the trend with large dealer groups across North America.

"There is no need to go public," Dilawri says. "Our advantage is in our corporate vision. As brothers, we take the long-term approach. We don't take the quarterly approach."

http://www.theglobeandmail.com/globe-drive/news/industry-news/how-one-of-canadas-largest-dealer-conglomerates-keeps-growing/article21954756/

Date Posted: December 9, 2014

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