Sean Kilpatrick
When Saturn was yanked out of the General Motors Co. orbit last year, Bob Clute had to move quickly to line up another auto maker for his dealership in Belleville, Ont.
So he reached out to contacts at Mitsubishi Motor Sales of Canada Inc., and by this January, Saturn of Belleville had become Mitsubishi of Belleville.
"Their reaction when I called was, 'We've been trying to get you for five years,' " Mr. Clute recalls. "It was a pretty good marriage from the first phone call."
Similar nuptials are being consummated throughout the dealership organizations of several auto makers across the country as more than 200 GM dealers whose relationships were terminated last year by the company look for ways to stay in business.
More than three dozen former GM stores have been scooped up by other auto makers as part of a sweeping transformation of the automobile dealership network in Canada.
The deals by Mitsubishi, Kia Canada Inc., Chrysler Canada Inc. and others give those GM rivals an instant presence in markets that are new to them, access to lists of customers who were cut adrift when GM eliminated four of its brands in Canada and a glittering opportunity to pick up market share.
"It is a great opportunity that presents itself because a lot of these dealers have been around a long time," notes Maria Soklis, vice-president and chief operating officer of Kia Canada, which has signed up nine former GM dealers to increase its network to 166 outlets nationally. "They've got good experience, good processes [and]a strong customer base."
Kia has added new stores in Okotoks, Alta., Listowel, Ont., and elsewhere, providing it with dealerships in areas that have been dominated for years by the Canadian units of the Detroit Three auto makers.
Ms. Soklis, who joined Kia four years ago after leaving GM Canada, points out that dealers who have switched are highly motivated.
Count Mr. Clute among that group.
"When you're sitting on a 10,000 square foot building, in this economy, in Belleville, you better be motivated if you're going to survive," he says. "I've been in the car business with General Motors for 38 years and I never thought I would ever be in this position, where my back was absolutely to the wall, where my business was destroyed."
Mr. Clute, who worked for General Motors of Canada Ltd. for 20 years and was involved in setting up Saturn in Canada during the 1980s, also has a Pontiac Buick GMC dealership in Belleville, which he bought when he left the auto maker in 1993. He has received a termination notice at both his dealerships, but so far has not signed a wind-down agreement, nor has he joined a lawsuit that 20 of his terminated colleagues have filed against GM.
He received his first Mitsubishi vehicles around the end of January and averaged one new car sale a day in his first two weeks as a Mitsubishi dealer, one of nine outlets that now are selling those vehicles instead of GM cars and trucks.
"Half our sales have been to our Saturn customer base," Mr. Clute says. "We have 3,000 Saturn owners in our customer base."
That's precisely what Mitsubishi was hoping for by signing up seven former Saturn dealers. "The Saturn facilities in most cases are an ideal size for our market needs and the dealer is offering a newer facility (most less than 20 years old) and an experienced staff," says Tony Laframboise, director of national sales operations for Mitsubishi Canada. "The dealers also believe that they will be able to retain some of their loyal customers and convert them into Mitsubishi owners."
GM wants to retain customers orphaned by its move to slash half its brands and convince them to trade in their Pontiacs, Saturns or other vehicles for Chevrolet, Cadillac, Buick and GMC models. Instead, its rivals are positioned to take advantage of the customer relationships the ex-GM dealers built up over the years.
Nissan Canada Inc. has taken over six former GM outlets, while Hyundai Auto Canada Corp. has grabbed seven and five others have switched to Mazda Canada Inc.
Chrysler Canada president Reid Bigland describes the switch of five GM stores to Chrysler outlets as "jersey swaps."
The deals got Chrysler into new territory almost instantly, Mr. Bigland notes, compared with the two years it takes to start a dealership from scratch.
He has his eye on drivers of Pontiac Montana and Uplander minivans, looking to trade in for a Chrysler Town and Country or Dodge Caravan.
"Many of those dealers have a history of selling minivans," he notes. Using industry parlance for winning over customers who own other brands, Mr. Bigland says "we hope to conquest them when they come back."