Dealer Lesson: JM Lexus, the Most Successful Lexus Dealer In America, Is a No-Dicker-Sticker Store

Timothy Cain
by Timothy Cain
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dealer lesson jm lexus the most successful lexus dealer in america is a

Half an hour from Fort Lauderdale, in Margate, Florida, sits JM Lexus, the highest-volume Lexus dealership in the United States.

Even by Lexus standards, where throughput is the best of any premium automaker operating in America, JM Lexus’ 8,000-unit new vehicle sales tally in 2016 was striking. That’s more than 150 new luxury cars, crossovers, and SUVs sold each week. That’s roughly six times the volume achieved by the typical Lexus dealer.

And JM Lexus, perennially the top Lexus dealer in America, does so as part of the Lexus Plus strategy: no negotiating, a single representative per customer, fixed prices for new and used cars as well as service fees and accessories.

Perhaps there’s a lesson to be learned by Lexus’ other dealers. For the time being, according to Automotive News, only 5 percent of Toyota’s premium brand stores operate under the Lexus Plus model.

For car dealers, adopting a fixed-price model is no mere alteration of the status quo but rather a wholehearted transformation. The upsides are significant: more satisfied employees, happier customers, and greater profit. Satisfied employees don’t leave in search of greener grass on the other side of the fence. Happy customers return for their next vehicle. Greater profits can be reinvested back into the dealer, creating an even better space for employees to work and for customers to buy. A better space in which employees work and customers buy consequently makes for more satisfied employees and happier customers, and so the cycle continues.

But just as the upsides are significant, the downsides are well known. “If you’ve got personnel that are used to doing business very traditionally, they may not fit into the Lexus Plus process,” Lexus’ Greg Kitzens, general manager responsible for future initiatives, told Automotive News.

Indeed, personnel accompanied to a competitive environment won’t be pleased when customers negotiate a better deal on an RX350 at the Lexus dealer one town down the highway. The same group of existing employees, potentially older employees, would also need to be trained in areas such as F&I, areas in which they’ve never worked. In search of a more satisfied staff, dealers making this major transition might just discover a particularly unsatisfying metamorphosis.

Switching to Lexus Plus “was major disruption to our business,” says Peter Cooper of Allentown, Pennsylvania’s Lexus Of Lehigh Valley. “It took everything we learned over the last 35 years as a dealership group and threw it out the window.”

For JM Lexus in Margate, Florida, adopting the Lexus Plus strategy served to bring factory support to an approach that was already in place. JM Lexus was already the top Lexus dealer in America thanks to success the store enjoyed with a similar strategy prior to Lexus Plus.

“It’s a toll on our customers, but mostly on our associates,” JM Lexus general manager Jim Dunn says of selling 150 new vehicles per week. “We really want this dealership to reflect a culture that’s caring, that’s sensitive to what our associates need and what our buyers today are really demanding.”

That’s a toll many other Lexus dealers would be happy to pay. Regardless of whether JM’s fellow Lexus stores adopt the Lexus Plus strategy soon, it’s likely they will eventually end up with the same format.

“[Lexus] always play the long game,” NADA consultant Mark Rogers says.

According to Lexus HQ’s Kitzens, this is no experiment. “It’s one of these things where you’ve really got to burn the ship,” he says. If, after the ship is burnt, more Lexus dealers reap the kinds of benefits enjoyed by Florida’s JM Lexus, the gain will have been worth the pain.

For the time being, Lexus is looking back on seven consecutive months of U.S. sales decline; on 13 year-over-year sales decreases in the last 14 months. If boom times made blowing up the traditional sales model difficult, perhaps lean times will present Lexus Plus with some more early adopters.

Timothy Cain is the founder of and a contributing analyst at The Truth About Cars and Follow on Twitter @timcaincars.

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  • JMII JMII on May 23, 2017

    I live right down the street from this dealership. Margate FL is a small (9 sq miles) town with pretty average socio-economic status. However it is on the border of two wealthy communities: Coral Springs and Boca. Even higher end residences in Ft Laud's Las Olas area and Weston are about 20 miles away. So they do serve a market with plenty of cash flow. FYI both Champion Porsche and Coconut Creek Infiniti are both in same area and also claim #1 status for their brands (true? who knows). JM Lexus is part of a huge car group known as Jim Moran Group headquartered in Deerfield Beach FL. You may know them as SE Toyota Distributions. Their F&I department is massive as (per their website) 1 in 10 vehicles sold in the US has JMG product attached to it. I used to work for a company that printed some of their marketing materials and GAP insurance was a major product they pushed along with extended warranties plus that vin etching and other nonsense. In addition they have Omni Financial under writing all those auto loans. To say the JM Group is automotive powerhouse is an understatement. I'm sure part of their success is the near total control they have, basically end-to-end in the Lexus buying/leasing process. They control the distribution, the financing and the insurance. With no outside vendors or agencies to deal with they truly offer one stop shopping. I know their F&I department sells software that other dealership use for floor planning so it seems they have excellent tools for auto dealership management.

    • Erikstrawn Erikstrawn on May 24, 2017

      "I’m sure part of their success is the near total control they have, basically end-to-end in the Lexus buying/leasing process. They control the distribution, the financing and the insurance." Isn't that the logic that dealers use to try and keep manufacturers out of the game? They argue manufacturers would have too much control of the pipeline, but then they're consolidating the other end of the pipeline in a bid to control it themselves.

  • Oberkanone Oberkanone on May 23, 2017

    I need to remind myself TTAC is a blog, not news.

  • FreedMike I suppose that in some crowded city like Rome or Tokyo, there's a market for a luxurious pint-size car. I don't think they'll be able to give them away here in the U.S.
  • TMA1 How much did exchange rates affect this decision? The Renegade is imported from Italy. I'm wondering if that's what caused the price to reach within a few hundred of the much bigger Compass. Kind of a no-brainer to pick the larger, more modern vehicle.
  • CEastwood Everytime I see one of these I think there's a dummie who could have bought a real car , but has to say look at me driving this cool thing I can't drive in the rain like an actual motorcycle that I should have bought in the first place ! It's not Batman I see driving these - it's middle age Fatman .
  • SilverCoupe I should be the potential audience for this (current A5 owner, considering an S5 in the future), but I can't say it excites me. I have never liked the vertical bars in the grilles of sporting Mercedes models, for one thing. The interior doesn't speak to me either.I would be more likely to consider a BMW 4 Series, though not the current version with the double Edsel grille. Still, I suppose it would be worth a look when the time comes to replace my current vehicle.
  • Verbal Can we expect this model to help M-B improve on finishing 29th out of 30 brands in CR's recent reliability survey?