Vince Sheehy is president of Sheehy Auto Stores, a group of 14 dealerships based in suburban Washington. The company ranks No. 48 on this year's Automotive News list of the 125 largest U.S. dealership groups.

In an import-dominated market, domestic brands make up most of Sheehy Auto's 23 franchises. The group relies on standardized operations across its dealerships to cut costs and maintain efficiency.

Sheehy, 49, discussed the state of his company and the industry with Staff Reporter Donna Harris.

How did your family get into selling cars?

My grandfather came home from World War II and decided the car business was going to take off with all the soldiers coming home. My father was with him until the early 1960s and then broke away in 1965 to start his own Ford dealership in Marlow Heights, Maryland. He went into the dealer development program with Ford. The store became one of the largest Ford dealerships in the country. I joined him in 1987.

What did you do before that?

I spent three years selling insurance for Prudential. Then I returned to the Wharton School (at the University of Pennsylvania) for my MBA. From there, I became a marketing manager for General Mills. I worked on Total cereal, Yoplait yogurt and Gold Medal Flour.

The night I left General Mills, everyone came to the party in plaid suits. The next day, I was battling 30 salespersons for the next customer to hit the lot.

How did you become head of the Sheehy operation?

In 1991, I bought a Nissan store in Manassas (Va.) as opposed to coming up through the ranks of the family business. My dad helped me finance it, and I built it from there.

Because of my success there, I was able to buy two more Nissan stores, one in 1997 and one in 1998. It was too complicated to run them from the store in Manassas. In July 1998, I entered an agreement with my father to take over the management of the entire operation, and he would bump up to chairman.

I couldn't have gotten any of this done without him. He just celebrated his 80th birthday.

The business is changing so quickly. How do you stay on top of it?

Standardization is the key. You need efficiencies to survive. The more standardized you are, the bigger you can grow. We are a long way from being there, but we have to talk about it if we are going to be 50 stores.

Our accounting is standardized. We have a standardized marketing approach. It is important, particularly to stay legally compliant. The processes have to be in place to check everybody. I have a full-time compliance official. Even with that individual, it is a struggle to keep up across 14 locations.

We are not going to be eight to 10 one-off dealerships. Our operation works under one umbrella.

Dealers often offer their general managers a stake in their store to motivate them. You have a different philosophy.

We have an all-for-one-and-one-for-all philosophy. We encourage managers to be invested in the company, not in an individual store. That's the glue that holds us together. Two-thirds of our executive managers-general managers and up are invested in the company. The remaining third are working their way toward that.

We have a tighter footprint than other dealership operations. We have the ability to manage most of our stores within a two-hour radius. It is easier to pull people together and be a cohesive group.

Some of our philosophy is driven by our footprint. If we had stores in Oklahoma and Florida, we would have to have a guy who is a 20 percent owner in that deal. My processes aren't so good that I can manage a Florida or Oklahoma store.

You have 14 dealerships and 23 franchises, about half of them domestic. Which brands are the winners and losers?

We are treading water at our domestic stores. All our preparation is to plan for the worst. If it turns out better, then so be it. We can only do so much in terms of getting cars sold. It's as challenging as I have seen it since I have been in the business. Hopefully, we have enough deep pockets and enough good management.

It's clear to see who the winners are, as the market moves back toward cars and crossovers. The domestics have a lot of work to do to change their mix of products and to improve overall fuel economy.

Big bets are being placed on research and development for alternative-fuel vehicles. The market, in the next five to seven years, will determine who guessed right and who guessed wrong. Throw some new foreign competitors in the mix, and it's going to be an exciting but tumultuous period in the business.

How is your brand mix changing?

Necessity is the mother of consolidation. We take a cold look at the future economics of each operation. We are not in business for nostalgia. We shut down our Powhatan (Va.) Ford store in 2007. We added Lincoln-Mercury at the Richmond (Va., Ford) store and added Chrysler-Jeep to the Dodge store in 2007.

How is your Lexus dealership doing?

Luxury sales are down. The two-income family that's just getting by right now is pretty conservative. It is easy to postpone decisions.

Is the Washington market overdealered? Is consolidation having an impact?

This market has been strong for such a long time that many dealers have an emotional tie to their business and made a lot of money over the years. They are not compelled to sell even if it might be the right thing to do.

Barring a disastrous economy, it will take five years to right-size this market. I am not wishing that disaster on anybody, including myself. I hope it takes five years and not two.

You launched your VIP Club last year. Customers who pay to join get complimentary and discounted services, including cash off another vehicle purchase. Salespeople get a bonus for selling the program. How is it going?

VIP has been a resounding success. Fifty-four percent of new-vehicle customers and 43 percent of used-car customers become VIP members. We have had over 5,000 VIP service visits. And a lot of these have not had time to develop — many VIP members are still coming in for their first oil change.

How many redeem bonus bucks for their next vehicle? It is relatively early in the program, but we have had between 50 and 60 redeemed. Those are mostly people who had a wreck or something unfortunate.

But we also have had VIP members buy a vehicle within a week for a child. Once we get past the two- to three-year mark, we'll be looking at a tremendous boomerang of customers coming back.

Salespeople at Sheehy consider themselves well-paid, but I think the program has helped reduce turnover.

You're coming up on your 10,000th VIP Club purchase. How will you respond?

We will do something for that customer. At the very least, we will give them free membership. I want to make a lot of noise. 

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