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Saturday, 27 July 2013 07:59

Zeigler Automotive expands Chicago presence by acquiring BMW store

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BMW of Orland Park BMW of Orland Park Courtesy Photo

Zeigler Automotive Group continues to solidify its position in the Chicago area with the acquisition of a coveted BMW dealership in the Windy City's southwest suburbs.

The Kalamazoo-based dealer group, which ranks among the top 100 "mega dealers" in the country, is scheduled to take over control Monday of BMW of Orland Park, adding to its portfolio of Chicagoland stores, including dealerships in Downers Grove, Ill. and Schaumburg, Ill. The acquisition is expected to add about $90 million in annual revenues for Zeigler, which topped $500 million in sales last year, according to industry reports.

The Orland Park dealership is a "high-volume" BMW store within about 25 minutes from downtown Chicago in "a really good location," said Aaron Zeigler, the company's president, in an interview with MiBiz.

"It's one of the nicest facilities I've ever seen," he said, noting that its amenities include air-conditioned service bays for the technicians, granite countertops and brick pavers.

Zeigler Automotive sought out the deal when the company learned the Orland Park store was potentially going on the market. The previous owner died suddenly just eight months after opening the brand new store in the southwest corner of Cook County. Zeigler said he sent a letter to the owner's estate and by the end of July, they were able to get the deal done.

Attorney Peter Roth of Varnum LLP advised on the transaction.

"We looked to expand in Chicago and in Michigan as well. With this one, Chicago is a big market for us. Orland Park is about two hours from Kalamazoo, and it's one of the areas we've identified where we wanted to do business. It's a growing city," he said.

[RELATED: Renovate or die: Car dealers must adapt to market changes, manufacturers' demand]

The store is a strong performer and is "substantially larger, probably seven times the size of what we have" at Zeigler BMW of Kalamazoo, Zeigler said. The new dealership, which will be known as Zeigler BMW of Orland Park, sits on about nine acres and features 60,000-square feet of sales, service and parts facilities. It has a modern, two-story showroom with a client lounge and space for more than 300 new units and about 80 used vehicles.

It's rare that one of the 300 or so BMW franchises in the U.S. ever goes up for sale, Zeigler said.

"BMW is one of the most coveted franchises in the car dealer world," Zeigler said, noting the automaker has increasing sales and a growing lineup of cars, including the new purpose-built electric "i" models. "The timing is just really good."

BMW sales in the U.S. have been strong for the first half of 2013, up 11 percent to 140,431 units compared to 2012, according to the automaker. Sales in June were up almost 25 percent on a year-to-year basis.

With 41 franchises and 17 dealerships, Zeigler Automotive Group — which had $516.86 million in revenue last year, according to a report in Wards Auto — also has stores in West Michigan and Elkhart, Ind. Zeigler said the company expects sales to be up 20 percent this year and projects revenue will top $700 million in 2014.

"It's been crazy growth," he said.

Zeigler said his company's strong team enabled it to continue to grow and pursue acquisitions.

"We're really strong internally right now, so it was a good time to grow," he said.

On top of that, the North American automotive market is growing at a good clip, with some manufacturers projecting sales of about 16.7 million units in 2014, about a 7-percent increase from this year's forecasts.

"That's going to be just crazy good for Michigan," Zeigler said. "The economy is really going to be strong in the next year."

The newest transaction follows the acquisition in March of Don Davis Honda in Amherst, N.Y., which was the company's first move out of the Great Lakes area.
New York was not a market Zeigler Automotive had targeted, he said, but the company was opportunistic when a "hard to come by" Honda dealership came up for sale.

"It was too good to pass up, plus I had someone who was willing to relocate to New York (and run the store)," Zeigler said, noting the company is currently building a new facility in Amherst.

Zeigler Automotive is one of two West Michigan-based automotive dealers operating stores in the Chicago area. In February, Grand Rapids-based Fox Motors opened a temporary Ford Lincoln store as it prepared to build a new $25 million dealership on Chicago's near north side.

[RELATED: Fox Motors plans TC, Chicago expansions]

Fox, also one of the top 100 "mega dealers" in the country with $523.84 million in revenue last year, selected Grand Rapids-based Triangle Associates Inc. to serve as construction manager on the build-out of the new 100,000-square-foot, three-story facility, which is expected to open by summer 2015.

Read 4610 times Last modified on Tuesday, 30 July 2013 17:43

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