Ken Smith wants his dad’s name to live on. And it’s about to, in a much bigger way.
With last week’s sale of Dave Smith Auto Group of Kellogg, Idaho, to RFJ Auto Partners Inc., the Dave Smith name will go out on the road. RFJ intends to brand future dealership acquisitions in the Northwest as Dave Smith stores. The name will even be considered as a brand for RFJ’s stores in other parts of the country.
It’s a long way from Dave Smith’s start as a small-town dealer in 1965 in northern Idaho. He built the business up from its base in the tiny town of Kellogg, and by 1994, the auto group was up to 65 employees and doing $65 million in annual sales, Ken Smith said. It drew customers from states far away even then.
But Dave Smith died that year at age 58 in a drowning accident in Belize, where he and family members had traveled on a sales reward vacation from Chevrolet. “We almost lost my mother, too,” recalled Ken Smith, who was on the trip. “It was terrible.”
The family went on and continued to build Dave Smith Auto Group using the strategies that its founder had developed. “He was a visionary, and we just kind of continued,” Smith said.
Dave Smith Auto Group built a huge Internet business when the Internet was still in its infancy, sometimes rankling rivals. Today, the company says it sells vehicles all over the U.S. and is the biggest Ram truck dealer in the world. With just two stores, Dave Smith ranks No. 111 on the Automotive News list of the largest 150 dealership groups in the U.S. with retail sales of 9,298 new vehicles last year. It ranks first among those 150 groups for new retail throughput, with an average of 4,649 new vehicles per dealership. The group’s annual revenue is now almost $600 million.
The Dave Smith operating model, with its no-haggle pricing, large inventories and robust Internet business, attracts lots of interest. Comments on the story announcing the Dave Smith sale in Automotive News earlier this week included admiration of the group’s success, an out-of-state customer praising the price savings on a Dave Smith purchase and a grumble about other dealerships losing sales to Dave Smith.
The model appealed to Rick Ford, president of RFJ, a Texas-based dealership group that formed in 2014 with the backing of private equity group Jordan Co. Ford wants to spread the core Dave Smith practices to RFJ’s other dealerships -- the group is now up to 24 stores.
Ford first called Ken Smith just more than a year ago when Smith was vacationing in Hawaii. The Smith family had long wanted to expand and buy other dealerships, but that takes a lot of cash, Smith noted. A mutual friend put the two together, and the pair hit it off right away.
“We have a lot of common interests, hunting and fishing, and we just meshed,” Smith said.
It’s important for him and his siblings to stay involved in what their dad started and what they continued to build. So they are now partners in RFJ, and Ken Smith will be dealer principal for all stores in the Northwest, including new acquisitions. He’ll be proud to put the Dave Smith brand on those additional stores and remember his dad.
Said Smith: “We’re taking his name forward.”
