He Transformed AutoNation into an Industry Colossus
He began his automotive career, starting as a technician for a Mercedes dealership.
Today, Mike Jackson is widely regarded as one of our generation’s most influential and effective leaders in the automotive industry.
As Chairman and CEO of AutoNation, he has been singularly responsible for modernizing the automotive retail business, introducing contemporary operational practices and delivering an unprecedented degree of customer service.
Through a shrewd mix of long-term planning and strategic investment, Mike Jackson has transformed the once-disorderly AutoNation into an industry colossus.
When Jackson arrived in Ft. Lauderdale 13 years ago to take over as CEO of AutoNation, the auto retail giant was in disarray. Profits weren’t being delivered as promised, and founder Wayne Huizenga had made an unwise decision to build used-car superstores as well. Huizenga's acquisition strategy had left AutoNation with more than 300 stores spread out over 19 states, with less than 60% concentrated in its nine major markets.
The concept of a large publicly owned car dealer group run by corporate managers rather than individual entrepreneurs was still controversial.
Automakers were still wedded to the traditional model of the dealer-principal who knew his local market and had skin in the game. They resisted the idea of allowing dozens of their franchises to fall into corporate hands. For their part, large public groups had little in the way of best practices to show for their greater scale.
But Jackson saw a day when AutoNation could offer improved customer service and create operating efficiencies by owning different manufacturer franchises in the same metropolitan area.
That way, a customer looking for, say, a compact crossover could shop for the best deal at a Honda store or a Toyota store — both owned by AutoNation.
Sergio Marchionne, CEO of Fiat Chrysler Automobiles (FCAU), calls Jackson: "One of the most influential and effective leaders in the automotive industry,” adding that he “delivers on his promises.”
Jackson shuttered the megastores, sold ancillary assets, and refocused the company on selling, servicing, and financing cars. He brought discipline to AutoNation’s spending and improved its capital structure.
Most of all, Jackson’s no-nonsense management style has produced results. With dealerships stretching from Florida to California that sells 34 new and used-car brands, AutoNation has become the auto manufacturers’ biggest customer. “[Jackson] is the guy everyone wants to talk to,” says Steve Cannon, President and CEO of AMB Group, and former CEO of Mercedes-Benz USA. “He’s on my speed dial.”
“He doesn’t waste anyone’s time,” says Michael Larson, a board member who oversees Bill and Melinda Gates’ personal and foundation assets, including a 16% stake in AutoNation. “It’s refreshing.”
Jackson began patiently assembling the pieces of an automotive retailing network in fast-growing areas, selling those points that didn’t fit his model and buying others that did. The company currently operates 221 stores in 15 states — 65% of them in its nine major markets. At the same time, he spent $3.7 billion upgrading facilities, created a high-capacity IT system, and invested in employee training.
It’s an especially good time to be the biggest kid on the block. Positive trends in the automotive industry lately have been working in AutoNation’s favor. The number of independent new-car dealers has fallen 30% since 1987. New-car sales at the largest 125 dealer groups are up double digits, roughly twice the gain of the overall industry, according to Automotive News and WardsAuto.
Large dealerships accounted for 8% of the market a decade ago, but today claim 20%. AutoNation has a 3.5% share of the new-vehicle market.
When Jackson began rebuilding AutoNation, he couldn’t have envisioned the importance of online shopping in car buying — or the value of having a single brand name. Now, when a customer in one of his 15 metro areas types in the name of a manufacturer or a model, the AutoNation name will likely be the first that pops up.
The technological complexity of today’s cars also gives the big chains an edge over smaller repair shops that can’t afford equipment and training. Moreover, most automakers want repairs under warranty done at the dealerships. The business is highly profitable; new-car sales contribute 57% of AutoNation’s annual revenue, but only 22% of gross profit. Parts, servicing, and financing, on the other hand, account for 19% of sales but 65% of gross profit.
As a result of Mike Jackson's vision, AutoNation not only secured its position as America’s largest automotive retailer, the company also distinguished itself as the industry’s standard bearer for customer focus, transparency, and corporate success:
- AutoNation is the only retailer in history to have sold more than 10 million vehicles
- AutoNation’s annual revenue for 2016 surpassed the $21 billion mark
- AutoNation sells nearly 600,000 vehicles and services over 4 million vehicles each year
- AutoNation owns and operates over 370 new vehicle franchises in 260 stores in 16 states across the U.S.
- More than 26,000 associates choose to build their careers with AutoNation
- AutoNation is a member of the S&P 500
- AutoNation is a member of the Fortune 500, ranking in the top 150 companies
- AutoNation has been named America’s Most Admired Automotive Retailer by Fortune Magazine five times
Previously, Mike Jackson served as President and Chief Executive Officer of Mercedes-Benz USA that oversaw the German automaker’s U.S. sales operation and 311 franchised dealerships.
In that role, he helped create the vision and direction that led to the luxury vehicle brand’s rejuvenation in the U.S. He also has served as chairman of the Mercedes-Benz National Dealer Council. Fittingly, it was at a Mercedes-Benz dealership that Mr. Jackson began his automotive career, starting as a technician for a dealership.
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