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NINETY EIGHT REGENCY

Former Hummer dealership a good fit for Cadillac dealer

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Former Hummer dealership a good fit for Cadillac dealer

BY TIM HIGGINS

FREE PRESS BUSINESS WRITER

A year ago, things looked tough for Hummer dealers.

The day after filing for bankruptcy, General Motors announced it had a tentative buyer lined up for its Hummer brand -- a Chinese company that most people in Detroit had never heard of named Sichuan Tengzhong Heavy Industrial Machinery.

Dan Frost grew concerned. He ran two of the top-selling Hummer dealerships in the country, one in Novi and the other in Southfield.

"The one thing I really didn't want was to be sold to a foreign nation," Frost said. "I don't own Toyota dealers or Honda dealerships ... My whole life has been wrapped up in the Detroit metro area."

"If I can't sell a guy a Cadillac, I pray he buys a Lincoln," he added.

The wheels started turning in his mind. How about becoming a Cadillac dealership?

"I knew that if we could get Cadillac here, we'd be No. 1 in the nation," Frost said.

In addition to Hummer, Frost, along with his partner Gary Wood, had built one of the top selling Chrysler-Jeep stores in the country in Southfield. Their Dodge-Chrysler-Jeep store in Taylor does well, too.

Clearly, Chrysler's business was also troubled last summer as it dealt with coming out of bankruptcy, a tie-up with Fiat and massive restructuring efforts at time of great economic upheaval throughout the world.

A key ingredient to Frost's success has been his mastery of auto financing and lease deals. His Southfield Chrysler store was one of the largest leasing dealers in the nation for around 10 years during the late 1980s and early 1990s, Frost said.

"We know leasing backwards and forward," he said.

It gets to Frost's business philosophy: "Price is very important," he said. "I've made my entire career on being the least costly place to buy a car."

While Cadillac isn't known for its low cost, it's a car brand that's involved in a lot of lease business.

His Hummer of Novi was also located in a relatively new building in a demographically affluent community and had done well.

"Obviously, it made it a natural for Cadillac," Frost said. "Because of the geographic area, because of our reputation and because of our proven reputation as always being No. 1 in the nation, we were fortunate enough to be awarded a Cadillac franchise," he added.

Frost was clearly attractive to GM officials. and Frost was awarded the franchise, opening up at the Hummer location in February.

"When we built this store, we were building it on Cadillac demographics," he said.

He brought workers from Detroit Hummer in Southfield to the Novi store, which now has 52 employees, he said.

The Southfield location, which is located near Frost's Chrysler-Jeep store, is to be transformed into a used-car business, making room at the Chrysler-Jeep store for a $3-million remodeling project that should add more room for the Dodge, Ram and Fiat brands.

Frost is also planning a $2-million expansion of the Novi location, which has been renamed Cadillac of Novi.

Frost said he will continue to service Hummers -- the deal to sell the brand to the Chinese company fell through and GM is winding down the division -- and has begun stockpiling parts to ensure he can quickly fix any customer problems that arise.

"Everybody needs somewhere still to take their car ... especially specialty cars such as a Hummer," he said.

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100530/BUSINESS01/5300446/1331/BUSINESS01/Former-Hummer-dealership-a-good-fit-for-Cadillac-dealer&template=fullarticle

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Chicagoland    2

One quanset [sp?] hut style Hummer dealer in my area has been converted to a Chevy dealer, and another is a Jeep store. But, we do have a few empty former L-M and Saturn buildings still for sale.

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