Tricolor and Ganas Ya’s Daniel Chu left dealers with advice for finding success in today’s buy-here, pay-here market during Monday’s panel at the BHPH Dealer Forum in Indianapolis.
Chu, who has served as the Chairman and CEO of Tricolor Holdings since its founding in 2008, told dealers they must make decisions consistent with their culture.
“If I were to communicate one important message to all of you, it would be that we’re at a point in time where you have to figure out how to be different,” Chu said. “You have to figure out how to differentiate your strategy if you want to be successful. If being different means, ‘Hey, we’re going to treat our customers better than anybody else.’ Then maybe you better figure out how to get really close to that customer and maybe you can’t do that in a centralized collections environment. Your decisions that you make, I think have to be consistent with your culture.”
Chu along with Byrider’s Jim Wright and CarHop’s Don Griffin, three of the larger firms in the BHPH industry with more than 100 rooftops, shared their views on the current market. All three acknowledged the challenges of 2023 with elevated prices of vehicles, high interest rates and increased cost of capital.
“It’s a hard business and I think the lenders to industry are seeing that, too,” Griffin said.
“We’ve been in business 27 to 28 years and the backside of a recession has always been the best time of the industry. You know that’s coming and I think there’s certainly opportunity for a brighter side.”
Wright said Byrider concentrated on cost-cutting measures this past year, including cutting down on office space.
“We’ve spent an inordinate amount of time over the last 18 months going back to our people and asking them, ‘Hey, what are you seeing? What are you hearing? What are your needs?” Wright explained. “I think that’s helped us progress this year and got their buy-in on some of these cost-cutting measures.”
Chu said this year has forced like-minded entrepreneurs to be more resourceful.
“It’s been a year that has enabled companies like us to kind of dig deep and take a mindset that we’re going to figure out a strategy to be successful,” Chu said. “It’s going to be a strategy that we believe we can execute to get through the short-term impediments, but at the same time take the longest view in the room. It’s a strategy that we believe will allow us to be sustainably successful over time.
“I think there’s truth in the idea that with every problem or with every setback, there’s opportunity. It’s just a matter of having the right mindset to capture that.”
The trio acknowledged the closure of U.S. Auto Sales and American Car Center and the role of private equity.
“To the extent you have private equity capital in your business, you just want to be able to be in a position hopefully where you can kind of manage it and it doesn’t really run you,” Chu said.
Griffin added, “You can’t run a business when you’re overleveraged.”
The Dealer Forum continues today at the JW Marriott in Indianapolis.