Case Study 5

Recapitalize financially distressed dealership

Challenge

Financially distressed, undercapitalized dealership established in developing area
  • Dealership posts losses exceeding $1.5M during first two years
  • Relationship with OEM and Captive strained
  • Brands: Hyundai, Genesis

Focus

Refocus management on cost containment and profitability drivers
  • Develop a Sales and Marketing Plan consistent with market demographics and growth
  • Repair relationship with OEM and Captive

Approach

Execute a financial restructuring with assistance from Captive
  • Right-size personnel and sales compensation plan to manage costs and facilitate benchmark performance
  • Reengineer F&I program/process to drive profitability

Results

Successfully recapitalized Dealership with $3.5M in separate financing
  • Reestablished cost containment and profit drivers, resulting in profitability being delivered to owner
  • Recruited new, professional staff
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