After almost 40 years of operation in Toronto, family-owned car dealership Gyro Mazda is venturing down new roads.
Toronto’s oldest Mazda dealership began in 1953 when two brothers arrived from Slovenia and started washing cars and pumping gas. Soon they were repairing British cars (which needed a lot of repairs). Soon after, the brothers acquired an Alpha Romeo franchise. When the Japanese started selling cars in Canada, the brothers picked up a Datsun franchise, and switched to Mazda shorty after. In 1975 they became a dedicated Mazda dealer, and a very successful one at that.
General Manager J.P. Kovac took up the mantle from his father in 2000, alongside the General Sales Manager Paul Kmet. “We’ve been a family owned and operated business for two generations now,” says Kovac.
“My father partnered with Joe Kmet in the Alpha Romeo days, and his son Paul and I are now partners in the business. We recently took on another partner, Jim Krigos. Paul looks after the new car sales, Jim looks after pre-owned and I’m general manager, so fixed operations is where I focus.”
Kovac claims that being a small and down-to-earth family business shapes Gyro’s relationships with its clients as well. “We’re at the dealership every day – we’re not absentee owners, we’re not a big group – we’re involved with the daily operations of the business and we try to keep a personal touch with all of our clients,” he says.
The company’s family-led ethos shows in its relationship with the local community as well. Gyros has sponsored hockey and baseball sports teams, among others, from the very beginning. “I’ve got team photos on the walls in here that go back to the 1970s,” Kovac adds.
In the Fast Lane
Gyro has around 40 staff and sells around 1000 vehicles a year, comprising 700 new and 300 used. Kovac claims that at one point the company was Canada’s “No.1 Mazda dealer by volume for seven years in a row.” Competition in the car sales sector is much tougher now than it was, he says, especially when you’re one dealer among 17 Mazda dealers in the Greater Toronto Area.
“It’s extremely competitive,” says Kovac. “Margins are thin. You can drive from dealer to dealer within 15 minutes in the GTA, as opposed to when you’re in a small town environment where you’ve basically got the one small dealership to deal with.”
Fortunately, Gyro is well aware of what it is up against and has the strategies in place for winning business. “When the customer has the ability to shop around, you’ve got to make sure you do a good job,” says Kovac.
“Everybody has the same products to offer, so it’s the people and the process that make the difference. We have an excellent client base and get a lot of repeat and referral business; we have very strong fixed operations; and that’s what keeps the customers coming back. You treat them right in service and they buy their next car from you.”
Achieving the Right Balance
Kovac concedes that providing a high level of customer service while remaining profitable can be a challenge when margins are so thin. However, he believes Gyro manages both. “Customers expect more, so expectations keep getting higher and higher, but we offer more services now than we’ve ever offered.
“We have a complete follow system, so we call customers when their cars are ready and send them an email when it’s time for a service. They don’t have to think about when to bring the car in for a service — we’ll make sure they get all the reminders they need. We also offer tire storage and complete vehicle detailing. We recently expanded our hours of operation and the area in which our customer shuttle runs.”
To bolster its financial side, Gyro is expanding into a secondary franchise for the first time in 37 years — with Hyundai. “That’s going to help ease the cost of doing business,” Kovac says. “The economies of scale are such that when you get into more than one business – especially when they’re situated right across from each other – you can keep the costs low.”
According to Kovac, Hyundai has grown by 50 per cent over the last five years and now has offerings in most market segments. The brand has almost twice the national volume of Mazda and should prove a valuable asset to the company.
“Hyundai’s volume in the marketplace has really come up and it’s because of the products and their quality,” says Kovac. “We’re very excited about being a Hyundai dealer – they just released a brand new revised Santa Fe model and it’s absolutely beautiful. It’s an excellent brand.”
Gyro plans to open the doors of its new Hyundai dealership in April 2013. From there, Kovac estimates it will achieve a sales volume of 600 new units in its first year and anticipates that number climbing to 1,000 new units sold per year within five years.
“We’ve got the ability to put another franchise in the next five years in the same location, and we’re looking to see what would be the best fit,” he adds. “We really want to utilize the expertise we already have, in our current operation, and apply it to the next franchise as well.”
The car retailer is eager to take on new challenges, but it is not leaving Mazda behind. Kovac points out that demand for the Mazda CX5 is currently outstripping production. “The product has been so well received and well-reviewed by the press and the public — it’s just fantastic,” he remarks. “Now, they’ve got a fully redesigned Mazda 6 that is due to hit the showrooms in January.” Heralding substantial expansion and diversification, 2013 is shaping up to be an exciting year for Gyro Mazda.