Hank Torian is a highly successful mega dealer in the San Francisco Bay Area, site of this year's NADA Convention and Exposition. So successful, in fact, that after the time I interviewed him at his Freemont auto mall location last September and after our editorial deadline for this issue, he sold to Republic for $120 million. But this fact does not diminish his accomplishments as a dealer. He has still "been there" and "done that" and has insights and experiences worth sharing.
Q: Hank, tell me how you got into the car business.
Hank: I was seventeen years old when I came to this country from Russia. After I did my army stint in Korea, I decided I wanted to live in California. I decided on Northern California because I liked the Bay Area so much. Because I spent most of my civilian adult life to that point in sales, I decided to sell cars. There were ads in the paper, I applied for a job at a dealership and that's how I got into the car business. I started at a Chevrolet store, became the top salesman and moved to sales manager and general sales manager and so on. I later went to work at a Pontiac dealership and was eventually given an opportunity to buy my first Dodge dealership.
Q: Who gave you that opportunity?
Hank: Chrysler was looking for young, aggressive dealers at that time because their products were not selling too well. They were looking for sales and marketing-oriented people. They would finance a dealer and give them an opportunity to own the store, provided the dealership was profitable and the loan was paid off. I was fortunate enough to pick a dealership which I felt had the best opportunityHayward Dodge. It was a factory store that had not seen a black month since its inception. I took it over on Labor Day, 1969 and we hit black the first month.
Q: The very first month?
Hank: The very first month. Everybody at the store was overjoyed. It was like a football team that had never won a game and just experienced their first victory. I paid off the factory in fourteen months.
Q: How were you able to turn that store around so quickly?
Hank: Number one, I have always been a tough operation. In this business you have to pick and choose people and put a team together. I got rid of 80% of the staff because they were lazy and they weren't following orders. Number two, I worked seven days and seven nights a week. Eventually, Hayward Dodge got a reputation as a place that pays well and where the dealer takes care of his people.
Q: It's a people business.
Hank: It's a people business. The secret to my success is the people who I have been able to attract. You're always looking for a clone of yourself asking what do they want to do with themselves, how hard are they willing to work, are they able to attract people and put their own winning team together. One-man shows are not successful long-term in the car business. A mom and pop store is different, but in an organization with the volume such as we have, you need a stable of talented young people. Young people make it happen in this business. I give them opportunities and if they prove to me that they can produce, I give them more opportunity. Some of the salaries and percentages and bonuses I pay are outrageously high, but that's what it takes to find and retain the caliber of people I want and my dealerships need.
Q: What was your personal sales philosophy, before you got into management?
Hank: My personal sales philosophy? I feel that first impressions are important. As a professional, you need to be able to invite the customer to buy a vehicle and in order to do that you need to get to know them, find out what their needs are. Not just "What do you want to pay", "How much a month can you go"that comes later. Get to know people instead of just trying to power-sell or strong-arm. I never rushed a sale with anybody. It's fun for me to get to know people and they are impressed because I'm asking questions about them, not just their money.
Q: What's the biggest difference between the way you sold cars and selling cars today?
Hank: Customers who often know more than the salespeople. A lot of this is due to the internet.
Q: What are your thoughts about the consolidation that is going on in the industry?
Hank: Five years ago I started thinking about an IPO, going public. One of the biggest risks in this business is capitalization. The public companies need groups like mine, profitable dealer groups that can help them regain and increase the value of their stock.
Q: So you're talking more about selling to a public group as opposed to going public yourself.
Hank: Correct. I'm not sure I need to or want to, but I believe we are what they are looking to acquire.
Q: Hank, you're a self-made man, a self-processed "tough operator"How could you function as an employee of a publicly-owned dealership group?
Hank: Well, that's a good question. This business has been and is such a big part of my life. It is still exciting to me and it scares the hell out of me to think that I might be on the outside looking in. If I did sell, I might just keep a couple of dealerships and start all over again. I would like to take just one year off and then see what I would like to do.
Q: Hank, let's take a few steps back. At one point you had one store which you paid off in fourteen months. That could have been the end of it. Tell me how you went from the one Dodge store to the 22nd largest group in the country?
Hank: Well, I was very successful at turning that first store around. I got a reputation as a dealer who could turn a loser into a winner. Well, the factory loves that kind of operator. They continued to offer to sell me more stores and I continued to build them into winners. In '78 I had five Dodge stores. When Chrysler ran into their problems and were headed towards bankruptcy, I decided that maybe I was "Dodged out". I started divorcing myself from them. I picked up Honda, then Toyota and so on.
Q: Hank, comparing when you got started to today, which is a better time to be a dealer?
Hank: Id' say right now is probably the best time I've ever seen to be a dealer. The reason I say that is the fact that there are so many dealers out there who are not profitable because of their old mode of operation. These are not the stores that the public companies are going after. That presents opportunity for dealers such as myself. For instance, I know of three or four dealerships right now that should be doing well, but they're not doing well because they can't attract quality people, they're not training adequately.
Q: How does an old school, hands-on car guy like yourself view the internet?
Hank: It's becoming the biggest thing in the business. In the shadow of Silicon Valley, I'm probably a computer illiterate, but I don't have to be an expert. I have to have the people who know and understand; the people who are coming on board today are computer literate. I know enough to know that our business is going to be dominated by this new technology in sales and service. Three years ago we put up our own website. I knew this was coming.
Q: Just a few more questions, Hank. Where did the name for your dealership group come from?
Hank: My daughter. Her name is Natasha. Except now, everyone calls her Tasha. I named it after her. She works with me in our internet department.
Q: Last question, Hank. Can you make some restaurant recommendations to the dealers who will be in town for the [NADA] convention?
Hank: Of course, the best Chinese food in the country can be found in China Town. Empress of China is top notch. Venticello would be my choice for Italian. One of my favorite restaurants is Maykadeh, which serves Middle Eastern food - kabobs and the like. There are several good seafood places down at the pier. Postrio is excellent if you want to experience what's become known as "California Cuisine". In this town it's hard to go to a bad restaurant.