By April Chadwick
MISSISSAUGA, ONT. – Don’t call Katie Naughton and Eric Levitt’s 401 Dixie Kia an anachronism.
Despite operating in the age of the mega dealership group, the young couple, who share the title of president, appear to be a throwback to the simpler days of automotive retail when a local, not a massive corporation, owned the local dealership.
In an increasingly completive retail landscape, single-point owners have declined significantly in the last decade, a process that seemed to accelerate following the 2009 financial crisis.
Dealership groups like AutoCanada, Dilawri, Go Auto and Zanchin now count their dealerships by the dozens. As the dominant players, these organizations are better able to weather economic uncertainty through diversification and a greater access to human and financial capital.
Compare that with the reality of Naughton and Levitt. A little more than a year after they closed the deal on their one and only store, 401 Dixie Kia, the couple sat down to share their story with Canadian AutoWorld.
In the blood
The couple, who embrace the description of their dealership as a mom and pop operation, share rich automotive heritages. Naughton’s grandfather, John B. Naughton, was a confidante of auto industry legend Lee Iacocca.
Granddad headed Ford’s Oakville Assembly plant from 1965 to 1969, and later served as V-P and general manager of the Ford division. At Iacocca’s request, he came out of retirement in 1980 to help save Chrysler, revamping its sales and marketing strategy, she said.
Her father, Big Mike Naughton, carried on the family automotive tradition as the owner of Mike Naughton Ford in Aurora, Colorado for over 35 years.
Levitt said his mother was a sales and leasing pioneer with 33 years of experience.
Both Levitt and Naughton brought loads of experience to their new roles as dealers.
“I grew up in the business,” she said. “I served in every position at the dealership, with the last three years as general manager.”
Levitt said he started as a car jockey at Ontario’s Roy Foss Motors in 1989, working his way up to general manager of a Pfaff Automotive Group Porsche store.
The couple met at the 2008 NADA Dealer Academy in Washington, D.C. They maintained a long distance relationship. That phase ended with Naughton moving north to work at Aspen Marketing in Toronto.
“I really wanted to get back into the retail world,” she said. “We always wanted to run own business, to have our own store.”
The pair said they spent the next two years looking for the perfect dealership.
“We did a lot of research and examined a lot of financial statements in order to find the right opportunity,” he said.
“We looked at between 20 and 25 different shops, but the odds were stacked against us. We made some initial offers, but we didn’t have the deep pockets of the large dealership groups. It seemed like a fight we couldn’t win.”
Finally, the right opportunity came along: 401 Dixie Kia, formerly owned by the Car-Nation Canada, a nine-store group with locations throughout southern Ontario.
The pair said they were able to convince Kia’s head office that they had the knowledge and enthusiasm to make the dealership a success.
401 Dixie Kia sits on 1.8 acres of land. The facility is 15,000 square feet boasting seven service bays and a staff of 40.
Levitt estimated that in 2013, their first full year of ownership, they sold 600 new and 300 used vehicles.
“Kia was excited that we were coming aboard,” he said. “They realized that we were totally committed to the store, and that as our only dealership, we had all our eggs in one basket.”
Newly christened, Katie and Eric 401 Dixie Kia, the couple has sought to make themselves a brand, capitalizing on the mom and pop image.
They said the first challenge was finding the right people. The sale of the dealership saw a number of staff leave.
“The first thing we had to do was hire new department managers,” he said. “People have been our biggest issue since beginning. We cannot succeed unless we have a staff that shares our 100-per cent customer focus.”
“The aim is to bring a Porsche-level of service to Kia. We want to create a family atmosphere where we treat people the way they expect to be treated. Our offices are on the showroom floor. Anyone can come and talk to us; there is no door on my cubicle.”
The dealership’s online presence also had to be redone as it was no longer part of Car-Nation Canada’s fold.
They said they continue to run the existing Reynolds & Reynolds dealership software.
Having both served as general managers, they agreed that the hardest part of being a dealer principal is dealing with all the little things they didn’t have to worry about before, such as dealing with lawyers, banks, revenue projections and staffing issues.
“It’s a lot harder than it looks from the outside,” admits Levitt.
Immediate goals are to sell lots of cars and pay off their bank loan, joked the couple. Longer term, they would like to own two to four dealerships, including a Ford store.
“It’s in my blood,” Naughton said of the Blue Oval.
It’s one step at a time for now, though.
“We don’t want to bite off more than we can chew,” Levitt said. “We are grateful to our customers and Kia for the opportunity to make a difference in the car business.”