GM No. 1 in growth of minority dealerships

General Motors, which already had the most minority-owned dealerships in the U.S., increased its count by more than any other automaker in 2019, according to data from the National Association of Minority Automobile Dealers.

GM finished the year with 287 minority-owned dealerships, a gain of nine, while Fiat Chrysler Automobiles was No. 2, with 181, a gain of four. Toyota added seven to jump past Hyundai into the No. 4 spot, with 81.

Overall, minority dealership numbers continued an upward trajectory after taking a dive during the Great Recession. There were 1,243 at the end of 2019, 29 more than a year earlier but 31 percent less than the peak of 1,805 in 2005.

Ford Motor Co. had three fewer minority dealerships than a year earlier, remaining in third, with 165 stores. Hyundai had a net loss of seven minority-owned stores last year, dropping to fifth place, with 76. 

“GM continues to push forth our decades-long commitment to create a dealer network that reflects the incredible diversity of our customer base,” the automaker said in a statement. “We are proud to say that we have more minority dealers than any other OEM in the U.S., accounting for nearly one of every four minority dealers in this country. It is apparent that our work has resulted in tremendous strides, and we have no intention to take our foot off the pedal.” 

Toyota Motor North America, in a statement, said it was committed to adding five to seven minority stores every year. The automaker said it was proud of the fact that Lexus had the highest percentage of minority-owned dealerships among any manufacturer in 2019. NAMAD census data shows that 9.4 percent of the luxury brand’s 244 stores were minority-owned at the end of 2019. 

The minority dealer body, still recovering from one economic crisis, now faces more adversity with the pandemic-induced downturn that has strained stores and consumers. Dealerships have steadily bounced back since March, but NAMAD President Damon Lester is anxious to see how the third quarter plays out, as COVID-19 cases have surged in many states and some areas have begun to roll back economic reopenings.

Lester said he hopes for another round of federal loans that dealers can use to sustain their businesses in the third quarter. He believes a Paycheck Protection Program “part two” is needed.

“If it was not for the assistance from the PPP ... I think a lot of dealerships — minority and nonminority dealerships, particularly the small ones — would have some severe challenges and be extremely distressed,” Lester told Automotive News. “I’m really cautious in my thinking as when their PPP money runs out, what reality looks like.”

The number of stores with Asian owners rose by 20 to 283, NAMAD said, while Hispanics had a net gain of 12 to 585, and Native American ownership was flat at 110. The number of Black-owned stores declined by three to 265.

Although the total number of minority dealers is growing, they make up just 6 percent of U.S. dealers. This low count presents a challenge to keeping the ethnic dealer count up when it’s time to sell a store. 

“Although we try to urge every minority dealer to consider another minority to purchase the store,” Lester said, “it is almost mathematically impossible for a minority dealer to sell to a minority dealer when there are 19,000 nonminority dealers.”