Executive Profile with Jim Fitzpatrick, Powered by CBT News

How Jay Feldman Scaled From One Store To 25

• CBT News • Season 1 • Episode 13

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We sit down with Jay Feldman to trace how a kid selling cars at 15 becomes the leader of a 25-store dealer group built on discipline, culture, and smart deal-making. We dig into what’s changing in retail automotive right now, from EV swings and digital shopping to FTC uncertainty, fixed ops growth, and AI’s impact on dealership operations. 


• growing up in a Chevrolet dealer family and starting in parts at 12 
• turning around a losing small-town store and building from there 
• scaling through acquisitions, partnerships, and new franchise points 
• adding Toyota and Honda for the first time and what that changes 
• working with Mark Wahlberg and what celebrity reach really does 
• the EV boom, incentives, and the reality of today’s EV mix 
• why he sits out overpriced deals and underwrites with “normal” years 
• the case for single-point dealers and why scale is optional 
• where online car buying works and where it still falls short 
• FTC compliance concerns focused on clarity and consistent rules 
• fixed ops priorities, mobile service experimentation, and daily cadence 
• blending cultures after an acquisition and keeping one-price selling 
• concerns about affordability, Chinese competition, and direct-to-consumer models 
• using AI in service operations and why it will change staffing 
• succession planning and advice for GMs who want to buy in 


Thanks for tuning in to this episode of Executive Profile with Jim Fitzpatrick.
For more interviews with the leaders shaping retail automotive, visit CBTNews.com and subscribe to the show on your favorite podcast platform.
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A Midwest Dealer Success Story

SPEAKER_02

From his early days selling cars at the ripe old age of 15 to becoming the owner of one of the most respected automobile retail organizations in the country. Jay Feldman's journey is a true American success story. As chairman and CEO of Feldman Automotive Group, Jay has built a dealership empire rooted in hard work, strong leadership, and an unwavering commitment to customers and employees alike. Under his leadership, Feldman Automotive has grown into one of the Midwest's premier automotive groups, representing many of the industry's top brands while continuing to expand its influence across the retail automotive landscape. But beyond the numbers and growth, Jay Feldman is widely respected for something even more important his passion for people, the dedication to community, and a forward-thinking vision for the future of retail automotive. Today we'll sit down with Jay Feldman to discuss the evolution of the car business, the challenges facing dealers today, and the leadership principles that continue to drive his success. Hi everyone, I'm Jim Fitzpatrick, and this is the executive profile exclusively on CBT News.

SPEAKER_00

This is the executive profile exclusively on CBT News.

SPEAKER_02

The executive profile is sponsored by the Dave Canton Group. Mr. Jay Feldman, founder and chairman and CEO of Feldman Automotive Group, thank you so much for allowing us to come into your dealership here and talk to you about the industry and about your amazing group. Thank you, Jim. I appreciate it. Looking forward to it. Sure.

Selling Cars At 15

SPEAKER_02

So uh let's kind of start in the beginning. Tell us a little bit about uh about your upbringing, where you're from, what school you went to, and how you ended up in retail automotive.

SPEAKER_01

Well, you know, my dad was a Chevrolet dealer, and uh the you know, my uh longest memory was uh when I had a snow day from school or whatever. I like to go to work with my dad and you know brush snow off cars and and uh uh you know just be around the dealership and then started working in the parts department when I was about twelve. And uh I uh approached my dad one day about selling cars when I was fifteen, and he thought that was not a great idea. But I uh I did it anyway and uh uh and basically without his permission, I just showed up in my suit and and uh started selling cars and uh uh in your suit at 15.

SPEAKER_02

Yeah. Because every 15-year-old has a suit and wants to sell cars, right? Yeah, that's funny.

SPEAKER_01

So uh so anyway, uh I loved the business and and then I uh ended up going to uh Northwood. Okay. And uh so I'd worked in the dealerships in the summer dealership. Uh my dad had a Chevrolet store in Novi, and then he had bought a little Chevrolet store in Milford, Michigan in 1987. That's when I was selling cars there, and and then I went to college for automotive marketing and management at Northwood. Uh got out of school, was a finance manager in that little store that was we were selling about 25, 30 cars a month, was losing money. Okay. We were a motors holding dealer. Okay. Um, and so my dad was gonna sell it. He was not a a country guy and and uh never went there, didn't like it. Yeah, and I talked him out of selling it and turned it around. Oh wow and uh paid off motors within a year. Nice. And uh he and I went 50-50 partners, built a new Chevrolet store four miles up the road and M59 and Hickory Ridge Road in Highland, where we're that store is still there today. We've added onto it four times. Okay. And uh and then I was awarded a new point where we're sitting today, uh, which opened in 2005. General Motors awarded me a new point. Okay. And uh then Hyundai awarded me a new point next door. Very nice. And uh just from there I started acquiring stores and uh partnering with dealers that weren't ready to sell.

SPEAKER_02

Yeah.

SPEAKER_01

And so we went partners for a period of time and I bought them out. Okay. And uh helped some struggling dealers that were really having a tough time and and that didn't have any val there was nothing to sell because it wasn't valuable. And uh from there, it just uh here we are, you know, we'll be uh 25 stores in another week. And uh it's almost a store every year.

Scaling Through Acquisitions And New Brands

SPEAKER_01

We've had some years where we acquired four stores. This is our biggest acquisition we're in the middle of right now, uh biggest one we've ever done, four stores at one time. Okay. Can you tell us a little bit about that acquisition? Yeah, yeah. It's in uh three of the stores are in uh Sandusky, Ohio. Okay. It's our first Toyota and Honda store, and then Stellantis is right there, so it's a little bit of an auto mall. Okay. And then uh Chevrolet store in Vermilion, Ohio, which is a suburb of Cleveland. So we're they're just uh over 5,000 units a year retail. Nice, about 211 million in revenue that we'll add to the bottom line, top line. Yeah, and uh uh you know we've got a lot of stuff going on. Uh we're awarded a new point in uh in Ohio that I'm not supposed to really talk about yet, but uh it'll be public soon. Okay. And uh uh hopefully another acquisition in Michigan. So by the end of uh 27, we'll probably be close to 30 rooftops. Nice, very nice. Yeah.

SPEAKER_02

Um and you're still looking, is that safe to say? Yeah.

SPEAKER_01

Yeah, we sat we sat on the sidelines for a couple years and and watched all the craziness and you know, we looked at a lot of deals and made offers on deals. You know, sometimes people outbid us by more than the asking price by a significant amount, and we just said this is crazy. Yeah, yeah. And so uh now it's you know the business is getting a little more normal and and sale prices are getting a little more normal. And I think there's you know, I think there's some sellers that see, you know, some concern on the horizon with different things happening in the business. Uh so people are getting a little more motivated to to sell.

SPEAKER_02

Sure. The uh many of the advisors and brokers that I talk to say that they're seeing more of those uh older dealers that don't have somebody to take over the operation in their family. And uh with the average age of today's dealer being 71 years old, they're seeing those people that are just saying, Hey, it it's time, you know, for me to to to uh retire, play a little bit more golf. Are you seeing more of that from the sellers?

SPEAKER_01

I think so. Although uh ironically, uh we're the acquisition we're doing now is a younger dealer. Okay. Um, but he just you know was ready to move on and do something different and and literally go fishing.

SPEAKER_02

There you go.

SPEAKER_01

So uh yeah.

SPEAKER_02

So I think you mentioned is this your gonna be your first Toyota store? First Toyota store and first Honda store. Okay, very nice. Yeah.

SPEAKER_01

And the Honda store is unique because it's about 60% under construction.

SPEAKER_02

Oh, wow.

SPEAKER_01

So we'll take over uh this month the the facility be done in September. Okay. Um and they're operating out of uh uh their current location down the street. So we'll take over that and then we'll move into the new location in September, I believe, September, October.

SPEAKER_02

Yeah, Honda's had some challenges in in recent years. Um what what's your take on that?

SPEAKER_01

Well, I think uh you know it's obviously a very successful company. I think that uh uh there's been a lot of you know changes in the industry with uh tariffs and EVs in the last couple years, and so I think they're you know fiddling their way through that. Um I think they're on a solid path to success. I think they have a lot of good product coming in and they'll be fine. I mean they they're Honda. They're yeah, they're a resilient company, and you know, Toyota's amazing, and and uh so we're we're excited about both those brands.

SPEAKER_02

Yeah, especially the Toyota. Every every dealer I talk to, and you it's on the top of their wish list of stores they wish they could get, right? And if they've got some or they have one, they want a second one. Yeah, it's just a great franchise.

SPEAKER_01

Yeah, for sure. Yeah, no question. And dealing with them has been amazing. Yeah, yeah, sure.

SPEAKER_02

Mark Wahlberg, uh you you know, we opened up automotive news back in, I guess, 2018, 2019. 2018, 2018, and uh found that Mark Wahlberg is in partners with you and now in retail automotive. Well, walk us through that. How'd that come about?

SPEAKER_01

Well, you know, it's uh so it's actually uh more uh of a funny story. We uh we were he and I have been friends for 10, 11 years now. And uh one day we were joking on a movie set. I was partners with him at a Wahlberg's in Cleveland, Ohio. Okay. And he was asking me about the car business and told me he, you know, uh uh drove a choke truck and changed oil when he was a kid. And he's like, I've always had a dream owning at car dealership. And I so I said, Oh, we should buy one together.

SPEAKER_02

Yeah.

SPEAKER_01

And uh so he thought it was kidding. I said, let's let's do it. Yeah so we found a store in uh Columbus, Ohio on Broad Street, Bobby Lehman Chevrolet. So that was our first store. Okay, and it was really gonna stop at that. And then the Buick GMC and Airstream Dealership Cross Street came up for sale. Okay. So we said, why not? And then uh we you know kept going, bought a store in Worthington, Ohio, and uh so it's it's been fun. He doesn't really get too involved in in the business at all. Sure. Um, we're very good friends, talk all the time, and uh just had lunch with him in Las Vegas when I was there for NADA.

SPEAKER_02

And uh is he interested in getting more stores?

SPEAKER_01

He is. We he he brought us a deal uh that we ended up not doing that uh didn't just didn't make a lot of sense. But uh, you know, if something came up and it made sense, yeah. Sure. Um we're not actively looking for anything, but if something came up, you know, he's a great guy and we're partners in other things too. So that's cool.

SPEAKER_02

Very cool, very cool. Do you think the the Mark Wahlberg brand sells cars? I mean, did uh have customers said I'm I'm buying this because I I feel like this is an active because I have people ask me about it all the time.

SPEAKER_01

Yeah. Um, you know, it's certainly I think our when we opened the store in in Columbus, this is a hard number to digest, but we had 475 million people worldwide saw the PR announcement. Oh my god. Yeah, it was all over the world. And so we were on you know, every major talk show, you know, Stephen Colbert, Allen, you know, uh uh Jimmy Fallon. Sure. And uh, you know, Mark you know went around everywhere talking about it, and Good Morning America. So um, you know, uh between you know he's got 30 million followers on Instagram, so when he posts something, we get a lot of activity off of it. Of course, yeah.

SPEAKER_02

His stores are doing good, or I should say your stores within the city.

SPEAKER_01

Yeah, they're they they're definitely they we bought some uh underperforming stores in in uh in Columbus and turned them around. Um, you know, great market, uh very Honda dominated market. Um but Chevrolet's definitely made some inroads in that market in Buick GMC. That's great.

SPEAKER_02

You picked up an RV dealership um in your acquisitions. Talk to us.

SPEAKER_01

Yeah, that was uh so when we bought the Buick GMC Hummer store across from the original Chevrolet store, uh Chris Hadesey owned uh the RV dealership there, okay, uh Airstream and then various other RV brands. And so, you know, Chris is our our resident expert on RV. I know nothing about RVs. So he stayed on as a partner in that deal and still manages it. And then we ended up with a satellite RV store in Lorraine, Ohio, which is a suburb of Cleveland.

SPEAKER_02

Yeah.

SPEAKER_01

So, you know, really just uh it you know, we don't have any intention of expanding the RV business.

SPEAKER_02

Did you have the stores during COVID? Uh yeah. COVID was uh that was the big one for our Yeah.

SPEAKER_01

During COVID I thought we were gonna really get in the RV business because this is amazing, right? We need more RV stores. Yeah, yeah. But uh but we left it up to the bigger guys like Blue Compass and uh uh you know RV retailers and all these different big things.

SPEAKER_02

And there's no MSRP on a on a R V, right? Uh no. No. So it's kind of whatever you put out there. But it's relatively competitive, yeah. Yeah, of course, of course.

SPEAKER_01

Yeah, and we we rent RVs and so we have a big rental fleet.

SPEAKER_02

Oh, cool. Yeah. Very cool.

EV Swings And The New Reality

SPEAKER_02

Very cool. Talk to us about the EV business. Um what what what's uh what's your take on that? What obviously with the incentives going away from the government, we saw EV sales come back down. Um but now with the price of gas, you know, dealers have told me there's a there's a spike in interest of consumers that said, look, I'm I'm willing to take a look at an RV or or even a hybrid, you know?

SPEAKER_01

Well, we um we try and capitalize on the opportunities that are presented to us. Sure. Um during the whole EV you know craze, we were the number one General Motors EV dealer in the country. Okay. And uh, you know, consistently we were selling across our group about 500 EVs a month uh new. Okay. And you know, obviously the world changed. You know, the Trump administration changed the focus back to ICE engines. Right. And so we had a little lull in between going from you know a heavy EV inventory to an ice inventory. And so, you know, we you know the the factories weren't set up to backfill, so we had a little bit of a lull for a couple months, which we knew that was gonna happen. Okay, and of course the tax credit ran out, yeah, both on new and used. Right. And uh so um, but I think I think long term you're gonna always have an an EV presence. Uh I think we you know incentivized it to the point where how could you not buy one? Right. And uh you know at one point some of these were the price of a cell phone bill. Yeah, yeah. So it really was. Yeah, and then you know, there'll be a lot of EVs coming off lease. That'll be a great opportunity for us as well. Um and you know, a lot of people put chargers in. Yep. So uh I think long term there's gonna be EVs are gonna get better, the batteries are gonna last longer, um, they're gonna be more uh efficient. And uh but I think it's not gonna be to the point where you know we went from you know at 1.35% of our sales were EV during that time of $7,500 tax credit in a in the lease incentive. Now we're back down to you know five to ten percent sales on EVs.

SPEAKER_02

It seems out of all the brands out there, uh Toyota kind of got it right. They said, let's pump the brakes on EVs, let's go more hybrid. Um that's that strategy seemed to work very well for them. And uh especially at a time when other manufacturers are going all in on EVs, you know, changing their entire fleet to EVs, but Toyota not so not so much. And uh it looks like they played it right.

SPEAKER_01

Yeah, I think it was really smart. I mean, look what it's cost the manufacturers to you know get out of the EV business with a hundred billion dollars or some crazy number like that. Right. It's unbelievable. And to just you know doing their thing uh steady eddy.

SPEAKER_02

That's right. As we sit here today, how many uh stores make up the the uh J. Feldman group?

SPEAKER_01

Um after May 5th, we'll have 25 locations. 25, yeah. And we'll do about 2.3 billion in revenue. All right, nice. That's great. Congratulations. Yeah.

SPEAKER_02

Do you get calls from from conglom bigger conglomerates out there that say you're ready?

unknown

No.

SPEAKER_01

No? No, I don't think we're a target. I'm too young. You're too young, okay. And it we're and we're still growing. We yeah, we really want to our goal is to get to five billion in revenue sooner than later. Okay.

SPEAKER_02

I've spoken to a number of your colleagues in the industry that have got that have got groups. What drives you to say that, to say I want five billion? Obviously, with every dealership comes more headaches and more more employees and everything else. Is is why is that significant?

SPEAKER_01

Well, I mean, you know, you have to have goals. I mean, I started out with a store selling 25 cars. Yeah, I started out with a store selling 25 cars a month at about 20 million in revenue.

SPEAKER_02

And uh Is it just fun at this point?

SPEAKER_01

Yeah, and we're able to do a lot of cool things from uh from a uh uh fro philanthropic uh uh point of view where you know a lot of things that we do uh you we couldn't do if we weren't the size that we are.

SPEAKER_02

Yeah.

SPEAKER_01

Yeah.

SPEAKER_02

And uh some stores grow, as you know, where they'll bring the GM in as a as a partner into the deal. Do you do that?

SPEAKER_01

Um we have uh uh a general manager in Ohio that's a partner in in some of our Ohio stores, but then I also let our executive team, uh our top execs, invest in deals. Oh so we have uh uh that group is invested in almost you know probably 60, 70 percent of my stores at this point.

SPEAKER_02

That's great. That's great. Yeah. Kid puts everybody uh at the same level, you know, and and uh you know they're not gonna leave, right? Right. Right, right. It's hard as I grow, they grow. Yeah, for sure.

SPEAKER_01

And we're able to promote people from within. We have you know people that were salespeople that are general managers now. We have uh you know service porters that are service managers. I mean I could give you lots of examples.

SPEAKER_02

Sure, sure. Um we saw the industry, obviously after uh COVID, you know, come kind of right back down to where we found it, you know, in 2018-2019, which was a kind of a race to the bottom, margin compression. We spoke a lot about at CBT News. What are we gonna do about it? Affordability is out there as well. Um are you seeing that uh across all the brands and all the stores that you're dealing with right now?

SPEAKER_01

Yeah, I think it's no surprise. You know, we didn't get brilliant overnight and we didn't get dumb overnight. It's it's uh uh and it goes back to you know our acquisition strategy. We looked at, you know, I saw things happening during COVID and you know the year after where you know valuations were based on COVID numbers, and yeah, I'm like, this just doesn't make sense. Let's look at 2019 and let's look at 2025 numbers when we're looking at a multiple and how we're gonna pay for these stores. And uh so we sat on the sidelines. I bought one store uh almost two years ago in Indiana, um, and we knew that uh you know it was it was priced right, maybe a little bit above, but we knew there was an opportunity to improve the store. Okay. So um so it made sense. But other than that, we've we look at lots and lots of deals, and most of them don't make any sense for us. Okay, okay.

SPEAKER_02

Are you trying to keep the deals within a geographic location? No, not necessarily.

SPEAKER_01

Okay. Not necessarily. We we we we'll look anywhere. Okay. Um you know, California's a tough state to operate in, uh, but people make it work. There's people that only want to look in California. So uh but that's been you know, aid, you know, geography-wise, it's kind of far, and there's plenty of opportunities a lot closer to home. But sure, right now we're in the Midwest, Ohio, Michigan, and Indiana. Uh but we're not opposed to being, we'd certainly love to be in Florida and Texas.

SPEAKER_02

So you and every other dealer, right? Right, right.

SPEAKER_01

And that's another thing too. You know, you gotta now you gotta pay you gotta pay to play.

SPEAKER_02

That's right, that's right. I was just talking to uh one of the broker advisors out there, and they said that if a deal was gonna bring uh seven uh times multiple, it's more like nine or ten if it's a Florida store. You know, you just gotta pay that premium, right? Yeah, it's crazy, crazy. Um the you were kind of that single point store for a little while with the stores that you had early on. What do you think the future is for those, for the lack of a better term, single point mom and pop operations with with all of the with all of the consolidation that we do see among groups like yours and others?

SPEAKER_01

Yeah, I I actually uh I I'm in complete disagreement with the whole philosophy that you can't have one store. I think that makes absolutely no sense. I mean, there's many examples of really actually truthfully, if you have one store and somebody really works it, they can do incredibly well and be very successful because they can see everything and and pay attention to everything. I don't know that there's uh any reason to scale other than you you as an individual decide that you want to scale. Sure. Um, but as a single point operator, I think there's a lot of uh, you know, tons and tons of examples of you know, our business is only, I think the top uh 150 groups only own 10% of the dealership. So that's right. Uh they can't be the only ones that are successful, right? You can't have 90% of the stores aren't successful. That's just not the case. Yeah. But we we look at stores that are incredibly well run where their net to uh revenue is massive just because it's an amazing operator in one store. Sure. Uh and there's plenty of people that have no interest in expanding.

SPEAKER_02

Right, right, right. They don't have that five billion dollar goal. Exactly. They like to save through it at night. That's exactly

Digital Shopping And FTC Uncertainty

SPEAKER_02

right. Um in terms of uh the online uh, you know, d during COVID, we saw you know all the craze was digital retailing and everybody's gonna buy their car online you the way they do with Carvana and such. Um where does that stand today with the Feldman group? Are you doing many deals uh or have you made a big effort of being able to take care of those customers online? Are they even there?

SPEAKER_01

I think there's uh a small degree, you know, uh number of customers that are absolutely you know hell bent on doing everything online. Yeah. But the reality is most people want to come in and look at cars and and and do something in person. Um you know, obviously you can sign deals digitally now. Uh, you know, most 90% of uh buyers, maybe even higher than that, are looking or starting online. Yeah, oh yeah. And they're doing the research online. So your website has to be really good. And uh, you know, people look at your Google ratings, they look at your you know, your customer reviews more than ever. Uh so you need to have a high rating or they're gonna pass and move on to somebody else.

SPEAKER_02

Yeah.

SPEAKER_01

Um so you need to have your online presence, your online store uh perfect, right? Or they're gonna go to somebody else. That's right. And you know, digital, a lot of our our advertising is digital now. Uh where you know it was flip-flop the other way where the majority of it was TV and newspaper a long time ago. That's right. That's right.

SPEAKER_02

Yeah, yeah. Um let's talk about that for a second. The FTC obviously sent out these 97 letters that we hear so much about, and um I've interviewed a number of people about this. Um what what's your concern, if you've got any, about about the FTC's ruling and the notion that they're gonna come in and and find put some pretty big fines in place for dealers that are not compliant?

SPEAKER_01

Well, I think that having uh compliance is a good thing. Um I think there's nothing wrong with that. I think the biggest issue is gonna be uh clarity. You know, making sure that people understand what they're supposed to do and what they're not supposed to do. Right now it's it's uh uh very it's a little bit vague. Yeah. And I think that's where the problem is. Um and so you know, I think the fear is that you're gonna be fined for something you didn't even know you were doing wrong. Right. Um so uh it's a very it I don't think that book's been a hundred percent written yet as far as they need some clarity.

SPEAKER_02

Yeah, for sure.

SPEAKER_01

That's the biggest thing I hear from other dealers that hey, nobody has a problem with compliance. Right. What they have a problem with is they need to know what's the problem. We gotta know what a rule is. What are we supposed to be doing?

SPEAKER_02

Absolutely. There's a there really is a lot of confusion out there. NEDA has been playing a big role to try to bring the FTC in to say you need you owe it to us right now to tell us what the deal is. And then as the dealers that I've spoken to have said, I might be you know compliant on the federal FTC, but not then on the state law that governs you know the this uh situation. So and then I might be compliant on the state, but not on the federal. So these things all have to come together somehow, don't they?

SPEAKER_01

For sure. And listen, we all have examples of a a local dealer that's advertising in a way that you know doesn't make it easy for us to explain it to our customers. Of course. Yeah and we know they're doing it wrong, but the customer says, well, that's what I read in the paper. That's what I saw in the end. So it'll be nice from that per perspective to kind of clean that up a little bit.

SPEAKER_02

Yeah, yeah, for sure.

Fixed Ops Focus And Mobile Service

SPEAKER_02

Um in terms of your your fixed ops business across your brands, um, fixed ops have been just running and gunning ever since COVID, right? And obviously with the age average age of a vehicle now being in excess of twelve years on the road, are you s are you feeling pretty good about it?

SPEAKER_01

We we uh we are working on our fixed operations every day. Okay. Uh it's a huge uh important part of our business. Um because You know, as you sell less cars and you know, uh there is a huge car park, there's a lot of cars on the road, yeah, and we want our unfair share of of that business. And so we we look at it every single day. Yeah. And we have a great group overseeing our fixed operations. Yeah. And uh we think even like, for example, some of these acquisitions, one of the first things we look at is opportunity fixed ops, and we think there's some big opportunity in some of these stores.

SPEAKER_02

Yeah, for sure. Um are you doing any mobile service in any of your stores? We we're dabbling in mobile service. Okay.

SPEAKER_01

It's it's not an easy uh and it is an expensive proposition. Yeah. But you know, it's it's the future.

SPEAKER_02

Yeah, yeah. I've spoken to some stores where they've got as many as like 30, 40 units on the road. You know, Ford, these Ford, I guess Ford's behind this in a big way. Um and they are, you know, they've they're there's no going back. You know, we we're all in on this mobile service and uh well it makes sense. It's convenient.

SPEAKER_01

Somebody's at their office and you have their car, you know, things worked on that that uh uh you know, we don't even listen, today people don't even want to go pick up their own carry out as we have looked at. That's right. That's exactly right. Um and they'll pay for it too. They'll pay all, you know. Oh, they will. Well sure, people pay fifteen dollars for a coffee to be delivered to them. Right, it's crazy.

SPEAKER_02

Yeah, that's that's the world we live in. Um are the are the brands or the OEMs uh are they having are they coming to you saying, hey, we we want to go down this road?

SPEAKER_01

or I think you're seeing more uh uh uh definitely more focus on it, for sure. Yeah. And it'll probably get more uh it'll be become bigger over time.

SPEAKER_02

Yeah, for sure.

Culture Shifts And One Price Stores

SPEAKER_02

Um attracting talent, obviously when you take these stores over. Um talk to me about uh you know bringing these two cultures together. The the culture that's in the store that you acquire and the the Jay Feldman way of doing business. How how do you do that successfully? That seems to be a challenge.

SPEAKER_01

Well, this is a unique situation for us because the group that we're buying is a one price group. So they're strictly one price. We've we don't have that in our existing organization. So we're gonna that is the challenge. We're gonna keep with that because at those stores. Yeah, okay. And uh, you know, we'll learn from it. I mean, it's uh it'll be really interesting. And what I did, what we've what we have seen from that is that the talent that they have in their stores is a different mindset because you know there's a lot, there's a contingent of the population that we'd like to hire that you know doesn't want to be on commission. Yeah, that likes you know the more positive, hey, everything's about getting the customer a bottle of water, opening the door for the customer, all about showing them through the dealership. It isn't about you know uh how much money can I make on this car, and that's affecting my commission, sure. Where they just want to get paid to sell a car and focus on you know making somebody happy and and that's their focus. Yeah.

SPEAKER_02

And often those compensation plans aren't based on gross profit, they're based on maybe a unit count at the end of the month and a salary. Yeah, yeah.

SPEAKER_01

Much simpler pay plan.

SPEAKER_02

Yeah. And in terms when you look at the numbers of those stores, did they impress you enough to say uh obviously they did, let's keep it one price.

SPEAKER_01

Yeah, and and we're and we haven't we haven't operated those stores ourselves, so you know the question is uh what uh you know how successful are they with that concept? And but we're absolutely open to uh, you know, their whole uh employee base is trained on one price selling.

SPEAKER_02

Yeah, yeah. That's a huge training. New and use cards. Yeah. And I agree with you. I think it gets a whole different person that uh comes into your organization that doesn't want to negotiate play the negotiation game with customers and what have you. It's a it's not for everyone. However, they would enjoy taking good care of the customers and focusing more on product knowledge and and uh giving effective presentations and what have you, right?

SPEAKER_01

Absolutely. You know, we're going with the mindset that uh we're buying a successful group and we don't want to go in there and tell them everything they're doing wrong.

SPEAKER_02

No, no, for sure, for sure. And uh because that bringing that company culture into a new operation as you've acquired these stores, that is somewhat of a challenge, isn't it?

SPEAKER_01

Yeah, listen, we've we've bought many stores that were broken.

SPEAKER_02

Yeah.

SPEAKER_01

And we knew they were broken, we bought them. And uh, you know, we knew that you know employees weren't gonna make the bus trip. And uh uh this is a little bit different because this is a successful group with a great culture, great reputation in the community. So it's actually kind of nice not to walk in thinking that you got to replace a bunch of people that you you know you actually can learn from from them and sure and uh hopefully help them grow the business through marketing or whatever.

SPEAKER_02

Could it be that one day Feldman Automotive finds itself in a one price structure?

SPEAKER_01

I I mean I I I I don't uh you never know, right? But every store is different in their own market, and that you know, maybe that's a market unique situation where there's other dealers in the same market doing the same thing. Sure.

SPEAKER_02

Um The people that are on the one price have said, oh, we don't have a problem with the FTC because we've been doing this now for you know forever. And uh then maybe there's something to that.

SPEAKER_01

You never know.

SPEAKER_02

Yeah. You never know. Yeah, it's interesting. It's interesting. Um terms of all of the stores that that you've got, uh one of them is one-800 pre-owned. Um talk to me about that.

SPEAKER_01

So we uh we had a uh uh a store in in Waterford, Michigan that uh we found that the franchise we had there wasn't going to work long term. And so we had this amazing location with a great building, and we came up with the concept of Feldman 1-800 pre-owned. Okay, and it was more when 1-800 numbers were a big deal, but people remember it, and so we have great signage on the on the uh right on the main drag. There'll be about 50-60,000 cars a day that go by, and and we turned it into a pre-owned operation, and it's done really well, and so we've sort of branded our use car operation 1-800 pre-owned. Okay, okay.

SPEAKER_02

Um, yeah, so like 1-800 flowers, even though people are gonna go online, exactly. They get that, right? That's that's that's fantastic.

China Risks And Direct Sales Threats

SPEAKER_02

So um and as you sit here today, um, how are you feeling about the future of the automotive industry? Obviously, you're very bullish on it and you want to get to five billion, but uh anything keeps you up at night about the industry as a whole?

SPEAKER_01

Yeah, I would say a bunch of things. I mean, obviously the affordability factor, um, you know, we're at fifty thousand dollars on a new car average, which is crazy. It is you know, lease payments at $800 to $1,000.

SPEAKER_02

Yeah.

SPEAKER_01

Um, you know, the Chinese factor is concerning for sure. Um but and why is the Chinese factor a concern? Well, I mean, uh when you have a uh uh you know a product that is comp that is funded by the Chinese government, yeah, where you know the playing field is not level. Right. Uh and you see what's happening in Europe. Uh I just read an article on automotive news Hyundai is getting decimated in Europe. Yeah. Yeah. Um and so you know, I think what you're gonna see ultimately is I think you're gonna see the Chinese partnering with American companies, and maybe they take a plant that isn't being used in the U.S., maybe a former EV plant, and they're probably gonna produce cars through there if if they end up coming here. I know there's hopefully you know a lot of senators that are against the Chinese entering the U.S. Um, but it's definitely caused a lot of problems in other parts of the world. It has.

SPEAKER_02

We're the last, we're the holdout you know, here in the U.S. And it was Canada, North America, but then of course Canadians said, well, you can let 50,000 vehicles in. And uh do you think if they came in under a limited program, that it would be okay?

SPEAKER_01

I think the problem is, you know, it's like anything. Give me an itch, I'll take a mile. Right. Um but I you know, everything I've ever read about, even the dealers are not successful, they're selling the Chinese products in Europe, they're they're not making money. Uh, you know, they're they're just not the same operation as you know the the American companies or the Japanese or the Koreans, they just don't operate the same way.

SPEAKER_02

Right. Um well since you went there in terms of uh the dealers out there and how they're setting up the dealer network, let's talk about the franchise uh system. Uh looks like it's a little under threat. You've got VW out there that's bringing out Scout that's going to be selling direct. Uh Tesla, obviously, for the last 20 years have been selling direct. Is that a concern of yours?

SPEAKER_01

Well, right now it's about four percent of the market. Um Yeah, it's a concern for sure. Um but you know, i i unfortunately it's uh uh you know I wish I had more control over it, but it will yeah, it's a concern for sure. I think uh if it becomes a big number beyond four percent, uh it's a concern.

SPEAKER_02

Right. Right. Yeah. The uh yeah, and I think everyone's looking at this the scout situation as uh obviously it's a legacy, even though they don't they say it's not, it's a l it's a division of a legacy brand, VW and Audi and Porsche and what have you. So um you know, will other companies follow suit?

SPEAKER_01

Well it's interesting to me that uh VW would do that. They're you know they're struggling with their VW stores and some of their other brands. And now to and now to to get into a uh you know direct retail situation with Scout, it seems a little you know un unneeded to me, but they they certainly know better than you know for themselves.

SPEAKER_02

Yeah. So the uh so as you sit here today and uh you think about some of the issues that are out there, some of the headwinds, um and and the auto industry is obviously one of the major drivers, you know, in the economy. Um in terms of the political uh you know uh landscape out there. Um any any comments on that at all? Any anything that you feel that that's I mean we're in war right now with Iran and and uh gas prices are through the roof and what have you?

SPEAKER_01

I think it's even uh more more broad than that. I mean, you see you go from one administration to another administration to another administration and you know, instant, hey, we're gonna, you know, it's okay to have plants in Mexico, now we can only have plants in the United States, and then you might get another administration comes in and says, no, it's back to Mexico again. I don't know how the car companies navigate any of this. Uh and of course, and it has an impact on us because you know, we went from EVs to no EVs, and so now you've got to build ice engines right away because otherwise we don't have anything to sell. And then you go from, you know, Mexican plants got to get rid of the Mexican plants in the in the Korean and Chinese and Canadian plants. Now we've got to be in the U.S. and it takes time to ramp those up. We're seeing it in our General Motors business. I mean, inventory is a struggle where it wasn't a struggle in the past. Yeah, yeah. So uh, you know, it's definitely makes it uh uh a little slippery slope. No question about it. Um then of course you had the war and the oil and everything else, of course it's uh it has an impact.

SPEAKER_02

That's right, yeah, no

How AI Changes Dealership Operations

SPEAKER_02

question. And uh so let's talk a little bit about uh AI. Obviously, uh that is making a huge impact in today's operation of a dealership. Um we see more and more programs coming out and and companies that are focused on that to help dealers bring down the cost of operating their dealerships. Some say it won't reduce headcount, it will only make your people much more efficient. I have a tendency to disagree. I think it's definitely gonna bring down headcount. I think it already is in some cases, but uh where where do you where do you stand on the AI you utilizing it?

SPEAKER_01

We're using AI right now in our fixed operations. Um everything from in our service BDC from a training and um scheduling uh perspective. And then we're also using the service drive so that you know everything from you know if a phone doesn't get answered after two rings, right? The AI takes over and and uh you know we can identify if it's a customer that has a vehicle in the shop by their phone number calling in to um you can tell by their voice has voice recognition if they're upset. Yeah. So yeah, so it's an efficiency. You know, it gets listen, everybody needs to embrace it. If you don't embrace it, you're gonna be, you know, behind the eight ball on it. And uh, you know, but there's so many AI companies out there, you know, you have to be careful too, because you could spend a billion dollars a year on AI, and you know, then another one comes out and it's twenty dollars a month. And so you gotta be careful what you're getting into because there's it's the the world is definitely gonna be AI, AI. I mean you listen to uh CNBC, that's all they talk about. It's unbelievable. It's all they talk about. And uh yeah, and the whole you know, and uh and I use it, I use perplexity every day looking stuff up, and and it's fascinating.

SPEAKER_02

That you know it helps us and yeah.

SPEAKER_01

So um, and I do believe that it's gonna reduce headcount. I don't care what anybody says. It's it yeah, you're gonna find that you know it'll start taking over tasks, you know. Yeah. I mean you see it in law firms, you see it in accounting firms.

SPEAKER_02

That's right. Marketing agencies and such. Yep, there's no question about it.

Succession Plans And Advice For GMs

SPEAKER_02

Um I follow you on on social, and uh you're you've got a beautiful family, uh beautiful kids. And uh do you wish they come into the business for that?

SPEAKER_01

So my son is 26 and he's finishing law school this year. And he is gonna uh yeah, he's gonna enroll in the NADA Dealer Candidate Academy in in January. That's great. And so uh and come aboard the story. Yeah, and he's gonna come aboard. Yeah, he's he's dabbled in the business in you know uh some of the summers, selling cars and 15 with a suit on or uh No, no, he didn't. But uh but he's uh you know he's uh uh uh a graduate from Ross Business School, University of Michigan, and now he's at law school in New York and he's finishing this year. Yeah, he's a smart guy, so so he's excited. My daughter is in fashion school, she has no interest.

SPEAKER_02

No interest.

SPEAKER_01

Yeah. No. We had her in the BDC uh one summer, and and she called me up and said, you know, there's customers yelling on the phone at me, I don't even know. Not for her.

SPEAKER_02

No, not for her. That's something.

SPEAKER_01

That's uh she said, come pick me up, send mom to pick me up. I need to get out of here.

SPEAKER_02

But your son is showing an interest. He wants to come in and and and work with dad. Yeah, he's fascinated by it. Yeah. I work with my sons in the business, and there's nothing more rewarding than that's really great. For sure. And it sounds like you did early with your daddy.

SPEAKER_01

Yeah.

SPEAKER_02

Yeah, that's great. Is your dad still with us?

SPEAKER_01

Yeah, my dad's 85 and he lives in Boca Ratan.

SPEAKER_02

Okay.

SPEAKER_01

And he likes hearing about all the success, but he but he hasn't. My dad basically retired in his early 50s.

SPEAKER_02

Oh wow. Nice. Yeah, very nice. That's great. I think you have to retire to Boca Raton, don't you, when you turn 50 or you when you retire?

SPEAKER_01

That's why I don't want to spend any time there. That'll make me want to retire.

SPEAKER_02

My uh we we moved out to Delray Beach for a little while, and uh I told a friend of mine, he goes, the average age in uh in South Florida is deceased. I said, Oh my god, that's terrible. Terrible way to put it. But it's a beautiful spot. Yes, for sure. I too would like to retire down there.

SPEAKER_01

So that's why car dealerships are so expensive there.

SPEAKER_02

Yes, that's right. That's right. That's exactly right. And it's uh it's at the top of every dealer's list to say, give me a Toyota or Lexus store in South Florida, right? Absolutely. That's crazy. That's crazy. So you're feeling pretty bullish about the industry. You want to hit your five billion dollar mark there. I'm sure that caught the interest right now of a number of advisors out there that says we we got to call him and uh, you know, uh have a coffee with him because we got stores, right?

SPEAKER_01

Well, you know, here's the thing. I mean, you know, when I say that number, I also, you know, uh with a caveat that we want to do it smart. Yeah. And, you know, if we don't end up getting to that number because deals don't make sense, we're just not gonna do them. I you know, there is a point where you know one thing we've been really good at is we don't have a lot of debt. And uh, you know, we've uh yeah, put a lot of cash into deals and and it's more of about return on investment. Yeah. Um and so we're in a good place, you know, where we really have very limited debt and uh where a lot of you know a lot of people have really levered up to get to you know two or three billion dollars in revenue. And uh we just don't want to do that. We want to be very methodical about how we do an acquisition. Sure, sure.

SPEAKER_02

What advice would you have for uh some some of the GMs that are watching this conversation right now? You were a young GM that took over a store. And what advice would you have for them if they want to be Jay Feldman in a few years with billions of dollars in sales and a number of locations?

SPEAKER_01

Probably find a dealer that is uh like we talked about earlier, that's 71 years old and uh maybe isn't quite ready to retire and buy into their deal.

SPEAKER_02

Okay, yeah, that's a good idea.

SPEAKER_01

Yeah, yeah. I think it's hard to just go out and buy a store and have the capital to do that for even, you know, these stores are, as you know, are you know the blue sky is yeah, and the real estate's more expensive and the operating capital required, and you know, manufacturers are not, you know, they don't have a lot of leeway. Like when they tell you this is your capital standard, yeah, you better make sure you have your capital standard in line, you know, your capital in line to meet that standard every year. Right. So probably the best advice is go out and find either a really small store and become, you know, the head cook and bottle washer or you know, partner with a dealer and you know have a bio plan over time.

SPEAKER_02

Mr. Jay Feldman, I want to thank you so much for spending all the time with us here at CBT News on our executive profile. I know that a lot of the dealers that are watching and the managers in the industry, and in fact the whole industry, is gonna get a lot out of your visit with us. And uh congratulations on all your success. We're pulling for you to hit that five billion. I'd love to do a follow-up with you to see how things are moving along.

SPEAKER_01

Thank you. I might have more gray hair by that point, but thanks so much. Thank you.