ISLAND AUTO GROUP'S NEW PARTNERS PROVIDE FUEL FOR GROWTH

The addition of new business partners has set the stage for Island Auto Group in New York to expand. The new team’s first acquisition is a Honda dealership in the Bronx. It won’t be the last because the group is in acquisition mode, Island’s dealer principal tells Getting to Go!

“We felt it was a good time to start growing,” Josh Aaronson, the dealer principal, says.

In late July, Island Auto Group added Bronx Honda, now known as Honda of the Bronx. The seller was Ira Lang. The deal also included the property.

It was Lang’s only dealership, Aaronson says, and he and the Lang family wanted to focus on other business interests.

The Dave Cantin Group advised on the transaction.

Aaronson’s new business partners are Jory Baron, Jason Montalvo and Scott Jacobs.

Jacobs is the former owner of JMG Marketing, a very large retail automotive director marketing company. It was acquired by NexGen Partners, a private equity firm, in 2019.

“I was one of (JMG Marketing’s) first customers over twenty years ago,” Aaronson says. “He has a very analytical mindset and always wanted to be on the retail side. We decided to partner together to grow a larger group.”

As the organization grows, Jacobs will roll out some of Island’s sales and service customer acquisition processes, Aaronson says.

Montalvo is the Honda store’s new general manager, as well as an operating partner. He previously was a managing partner at Empire Auto Group, a large dealership group in New York.

“I partner with great people that become close to me,” Aaronson says. “They all have a certain stake” in their dealerships.

While Aaronson didn’t say what Montalvo’s ownership stake is, he did say it is usually 20%.

A cooler service department

The dealership facility is not image compliant. Island will make it image compliant over the next several years, Aaronson says.

It has already made some smaller changes, including opening the service department on Saturday’s. “We thought the service techs would be upset, but they weren’t,” Aaronson says.

Among other changes, Island will add a wheel alignment machine, put air conditioning in the shop, and work with different shifts if necessary. Especially the addition of airco should help it acquire more technicians, Aaronson says.

“We will also provide them with support from the (Business Development Center) level,” he adds.

On the sales side, the major change was bringing in a new general manager, Aaronson says. They kept every other sales team member.

“We find out quickly who wants to be on the team and who doesn’t,” he says. “The store is a busy store, and I think everyone has a good opportunity to increase their income and deliver and amazing customer experience.”

Big group advantages

Island Auto Group’s corporate headquarters is on Staten Island. It will give the new Honda store support, including scale and synergy with some of the Group’s technology partners, Aaronson says.

Another advantage to being part of a large group is access to more used car inventory. Island will be adding “a lot of used cars” the Honda store didn’t have in stock, Aaronson says.

“We don’t need 50 (new Honda) Accords on the lot, so we are going to sell a lot more (Certified Pre-Owned),” he says.

It helps that the group has a large storage lot five or six minutes from the Honda of the Bronx location.

This is Island Auto Group’s second Honda franchise. The Group has 16 roof tops and just obtained a Kia open point. The new Kia store will open in the next few months, Aaronson says.

As it expands, the Group doesn’t have a specific number of franchises in mind, he says. “When we see a good operation, we have the capital to make a deal.”

They like to be in “nice-sized” markets, Aaronson says, and likely will stick to the Tri-State area.

Currently, all its franchises are volume brands. “We love the manufacturers we work with and they like us,” he says.

That doesn’t mean the Group isn’t interested in acquiring a luxury brand, if the right opportunity arises.

“We’d love to (own a luxury brand),” Aaronson says. “We already deliver an amazing customer experience. Our CSI scores are top.”