Carson Kia was part of the country’s largest Kia Motors North America dealership group by volume until last month, when Renton, Wash.-based Car Pros Automotive Group sold the franchise and its 72,000-square-foot facility to Trophy Automotive Dealer Group in Glendale.
Neither terms of the deal nor financials for the buyer or seller were disclosed.
Trophy Automotive Chairman and Chief Executive Nasser Watar said the acquisition in Carson is the start of a campaign to grow to 30 dealerships within 30 months.
“We are proud of this new acquisition which is a testament to our consistent approach of growing our footprint in the automotive space,” Watar said in a statement.
Watar’s ambition falls in line with an industrywide consolidation trend.
“A big driver is the larger groups are finding cost efficiencies and successfully driving down costs relative to the smaller dealership groups,” said Ryan Kerrigan, managing director of Kerrigan Advisors, an Irvine-based brokerage that represented Car Pros on the August sale.
The deal for Carson Kia was relatively small. The franchise wasn’t on the Business Journal’s most recent list of largest auto dealers in Los Angeles County, which featured 50 enterprises with more than 1,250 new vehicles sold in 2017.
The acquisition, however, adds to Trophy Automotive Dealer Group’s spread of brands and presence in various parts of Los Angeles County. The group’s holdings now stretch from the San Fernando Valley to the San Gabriel Valley and from downtown to the South Bay, with a local lineup that also includes: Mercedes Benz of Encinco; Mercedes Benz of Valencia; Universal City Nissan; West Covina Nissan and Kia Downtown Los Angeles. None of those dealerships were on this year’s Business Journal list.
Carson Kia moved into the 6.5-acre site just off the 405 freeway in 2016, after completing a nearly $20 million renovation that included a 65-foot sign with a 40-foot-wide digital screen.
Car Pros paid the city $6.4 million for the property, which previously hosted an RV dealership, according to reports.
Pressure to consolidate stems from shrinking margins on a per-vehicle basis in part due to shoppers using digital resources to research purchases, according to Michael Issa, principal at GlassRatner, a restructuring specialist and subsidiary of Westwood-based B. Riley Financial Inc. subsidiary.
“Car gross profit has been trending down on most, if not all, brands for a variety of reasons—one of which is the availability of information online,” said Issa, who advised on the recent sale of an Acura dealership in Orange County.
Subrina Hudson is a reporter for the Orange County Business Journal, a sister publication of the Los Angeles Business Journal.