Western New York's largest auto seller is looking to get bigger, as deal-making heats up among the region's new car dealers.
The West-Herr Auto Group is negotiating with Best Dodge in Orchard Park, a move that would add Chrysler Corp. products to its current lineup of nine regional dealerships, an official confirmed Tuesday.
But the deal with Best Dodge owner Louis Berti isn't the only acquisition the group is considering, West Herr vice president Bill Loecher said.
"There's another deal in the works" with a Chrysler Corp. franchise, he said. The Best transaction -- if it closes sometime in July -- "probably won't be the first," he said.
An unrelated deal, the pending sale of Acura of Amherst to used-car wholesaler Alan Rosen, brings the number of deals-in-the-making to three.
Rosen took over management of the ailing Acura dealership March 1 and is awaiting American Honda's go-ahead to close the purchase, he said. Rosen owns Nickel City Auto Sales, a used-car wholesaler, in the Town of Tonawanda.
The three pending deals are far outpaced by rumored transactions, auto dealers said. If one tenth of the speculation proves true, the number of locations that change hands this year will be much higher.
"The rumor mill right now is rampant," said Robert Shanks, president of Sheridan Chrysler-Plymouth Inc. in Amherst and chairman of the Niagara Frontier Auto Dealers Association.
A healthy auto market is helping drive the selling by supporting the price a dealership can fetch, Shanks said. Buffalo-area dealerships sold 65,982 new cars last year, up 17 percent from 1993's level of 56,234, according to the dealers association.
The association's 77 member dealers throughout Erie County handle 32 different brands of vehicles, the group said.
"Some people are looking to get out," Shanks said. "The economy's been pretty good, but if you hit a downside -- who knows."
Dealers wouldn't discuss the prices they pay for their franchise. But, in general, a store can go for $500,000 to about $2 million depending on its volume and the terms of the deal, industry sources said.
In addition, carmakers are accelerating the deals with programs to combine certain nameplates. General Motors is looking to combine Oldsmobile dealerships with other GM brands, while Chrysler is seeking to unite Jeep
dealerships with Chrysler-Plymouth outlets.
"The price tends to be specific to the franchise and the location," said Jake Kelderman, executive director of industry affairs for the National Association of Auto Dealers in McLean, Va.
The average U.S. dealership generated about $12.5 million in new-car sales in 1996, up from $7.8 million in 1990, Kelderman said. The 60 percent increase came amid higher volume and a 37 percent rise in the average vehicle price, from $15,900 to $21,750.
For West-Herr, the attraction of a Chrysler dealership is the further diversification of the auto group's array of products. The group's nine dealerships currently sell Ford and GM cars, as well as several foreign makes.
"You never know who's going to be up and who's going to be down," Loecher said.
A manager at Best Dodge referred questions about the deal to West-Herr.
Rosen, the prospective owner at Acura of Amherst, said he expects a new focus on service to "get back some of the customers who've been lost over the years through mistreatment."
The financially troubled dealership had been passed over by at least one other prospective buyer, local hotelier Pat Cosentino, before Rosen stepped forward.
The deal doesn't involve Jaguar of Amherst, a West-Herr dealership adjacent to Rosen's property on Transit Road.