A new partnership between two Baltimore auto dealers will make them among the largest wholesale parts suppliers in the U.S.
Longtime rivals Norris Automotive Group and Al Packer?s White Marsh Ford ? which also has two Ford dealerships in Florida ? will merge their wholesale parts supply operations on Nov. 1, making them the fifth largest auto parts distributor in the country.
“Basically, in today?s market, you really have to look at the dealer body for help,” Norris Chief Financial Officer Andy Franklin said. “Dealers are working more together than we ever have” due to dwindling sales.
Franklin estimates that Packer has $12 million to $13 million in annual sales of wholesale parts, while Norris has about $11 million to $12 million. He expects the partnership will grow the profitability beyond $24 million annual revenue due to increased service levels and product offerings.
Representatives for Al Packer were not available for comment by press time.
Dealers in Maryland, Virginia, D.C. and throughout the East Coast, most of which have individual parts operations, will also gain rewards. Dealerships are under pressure from insurance companies to quickly turn around cars. The new efficiencies, including same-day parts deliveries, will help satisfy that demand. The new partners will also work with state and local government agencies to provide parts for vehicles.
The partnership will add, not reduce, job opportunities because it will allow Norris to explore other areas in which to grow, said Jeffrey Grossman, general manager at Norris Ford Inc.
“That?s another bright side of this endeavor,” Grossman said. “That would mean more local jobs.”
However, both Grossman and Franklin recognize there may be some resistance from both groups? employees, who have to transition from competing against each other to partnering.
Any such reluctance on the part of employees needs to be resolved for the new partnership to succeed, said longtime auto dealer consultant Richard Flint, of Newport News, Va.
“That is going to create a challenge for them, taking two unique environments that have been highly successful and finding a common connection for people,” Flint said. “That is going to take a tremendous amount of energy and a leadership that is not fearful to face issues head on.”
