Selling cars is a lucrative business right now. Prominent investors and national chains are offering big money to buy dealerships as cars sell at a brisk pace not seen in more than a decade.
But two of the Boston area’s best-known auto executives took different turns in the face of interest from potential buyers.
Ernie Boch Jr. just sold five dealerships for an undisclosed amount to Dan Dagesse, a longtime dealer who has managed Boch’s stores for several years, and Dagesse’s son, Christopher. The new owners will keep the Boch name on the stores.
But the state’s biggest auto dealer, Herb Chambers, is looking to expand, not cash out of his empire of 55 franchises. Chambers said he rebuffs offers for his car business periodically. At the age of 73, he is still looking to buy more dealerships, particularly in Connecticut and New Hampshire, and has a meeting scheduled for Friday with
a dealer who may sell.
The frenzy of deal-making among auto sellers in the past year, attracting the interest of famed investors Warren Buffett and George Soros in dealerships around the United States, reflects a 180-degree turn from the Great Recession roughly eight years ago. At that time, locally owned dealerships were closing, and anxious consumers opted to get a few more miles out of their current rides. Today, with the stronger economy and low interest rates and gasoline prices, sales of vehicles — especially trucks — are at their highest volume since 2005.
Buffett injected some high-octane fuel into the race last year when his company, Berkshire Hathaway, agreed to pay an estimated $4 billion for a large, family-owned dealership group based in Phoenix. He said he’s on the prowl for more.
“It seems like Wall Street money has discovered that the automobile business is a good place to be,” Chambers said.
Boch, though, chose to sell to an associate instead of to a Wall Street banker. Boch brought in Dagesse to help run his dealerships in early 2011. The transition, he said, should be seamless for customers.
“Dan’s a great guy to take over because I’ve been working with him shoulder to shoulder,” Boch said. “He’s got a long, illustrious career in the business.”
The company was founded by his grandfather, Andrew Boch, nearly 70 years ago, but it was his father, Ernie Boch, who made it a local icon with his “Come on down!” sales pitch. Ernie Jr. started running the business after his father died in 2003. Boch’s dealership group employs nearly 700 people and includes Honda and Toyota stores on the Automile on Route 1 in Norwood, a Toyota location in North Attleborough, a Honda dealership in Westford, and a used-car dealership in Norwood.
Boch’s sale was reported in other media last week.
Dagesse said he’s already looking for acquisition opportunities in the Boston area, along with locations in Delaware to complement the dealerships he owns with his son in that state.
Boch will continue to own his Ferrari and Maserati dealership in Norwood, and his lucrative Subaru of New England distributorship. Selling off the other dealerships will allow the 57-year-old Boch to spend more time on those businesses, as well as pursue his passions, including his Music Drives Us charity, which funds music education, and other “humanitarian projects” that he says are in the works.
He just made another big investment in the Subaru business, opening a 162,000-square-foot complex in Norwood in September, double the size of its previous location.
The seemingly ubiquitous commercials imploring car shoppers to “Come on down!” aren’t going away anytime soon. In addition to keeping his name on the dealerships, Boch’s agreement with Dagesse requires him to remain the dealerships’ marketing manager and pitchman.
“I don’t expect those to change, except in the natural evolution of what we’ve been doing,” Boch said of his ads.
Ray Ciccolo, president of Village Automotive Group, said the Boch group was one of the few remaining dealership companies in the Boston area that has been owned by the same family for more than 50 years.
Like Chambers, the 77-year-old Ciccolo said he is not interested in selling Village Automotive, which includes nine dealerships, though he has received more inquiries from potential buyers in the past few years. Instead, Ciccolo said, he has several family members who can continue to run the company once he decides to retire.
Ciccolo is also watching what Chambers is up to. In an interview with Bloomberg News that was published in September, Chambers declared that he would be willing to sell at some point and conceded he has even talked to a number of investment banks about doing a deal.
In an interview with the Globe, Chambers said he’s been regularly approached about selling by big national chains, including AutoNation and Penske Automotive Group, the nation’s two largest dealers. But Chambers, whose billboards are as well-known around Boston as Boch’s commercials, has rebuffed them.
The car business, he said, turned out to be much more enjoyable than the copy-machine business that he built and sold for $80 million in 1983, providing the seeds for the auto empire he oversees today.
“It’s been the same conversation for 10 years,” Chambers said of selling his dealerships. “Maybe someday. But not today.”
Several of Chambers’s relatives, including his son, work for him in the business, and a succession plan is in place. But Chambers declined to disclose it, and he is not eager to retire.
“I don’t look at it as going to work in the morning,” he said. “What am I going to do? I’m not a golfer.”Jon Chesto can be reached
at firstname.lastname@example.org. Follow him on Twitter @jonchesto.