Bernie Moreno has always had a great love for cars. They had to be in his life. So as a 25-year-old, he went to work as a general manager of Herb Chambers’ Saturn dealership in Boston. During the course of 12 years there, he became Chambers’ vice president.
Moreno’s success caught the attention of Mercedes-Benz who asked Moreno if he would move to Cleveland to run a Mercedes-Benz dealership. Moreno agreed.
“I came in to Cleveland to see what this dealership was all about before I bought it,” Moreno says. “I pulled up here with my wife, I saw a salesperson, and I told him I was thinking about either a Lexus or a Mercedes — and I’m moving to Cleveland.
“The salesperson said, ‘I don’t understand why you’d want to move to Cleveland. This is the worst place on Earth to live. The people suck, the weather sucks, the economy sucks. I was born here and I’ve been trying to leave here since I came out of the womb.’ This is what the guy said to me.
“So I said, ‘People don’t buy Mercedes here?’ He said, ‘This is a blue-collar town. If we sell 10 to 15 cars a month, that’s a great month. If we sell 20, we’re dancing on the tables.’”
Moreno could have been discouraged, but he wasn’t. The dealership had been selling 200 cars a year before Moreno took over. He came in and set the goal high for the new dealership team.
“We came in, and I said to myself, ‘We can’t live selling five cars a month,’” Moreno says. “In our first sales meeting, May 13, 2005, I said, ‘We’re going to sell 100 cars a month.’
“We knew we had to do that because if we didn’t sell 100 cars a month, I couldn’t pay me, let alone my staff. I had to succeed because if I didn’t I would be in big trouble because I just committed my entire life to this endeavor.”
Here is how Moreno, president of Collection Auto Group, took one Mercedes-Benz dealership and built it into the Collection Auto Group that we know in Cleveland today.
Manage growth
When Moreno was working in Boston prior to 2005, he was helping run what was the sixth-largest privately owned dealership group in America with $1.5 billion in annual sales. In early 2005, he took over a dealership that sold only 200 cars a year.
“The difference is this one is mine and that one I just worked for,” Moreno says.
At that time, Moreno’s focus was to establish the dealership in the Cleveland area and create the right culture within the company.
“What helped in that tremendously was the fact that 12 guys moved from Boston to Cleveland with me,” he says. “That was a huge help, because when you’re establishing a culture, you need a critical mass of people who feel the same way that you do philosophically.”
Moreno says his desire to create further opportunities for the business fueled the dealership group’s growth the most. This, in turn, created opportunities for his staff.
“You can’t have all these guys in one store and challenge them and keep them growing,” he says. “All of them now have their own dealership that they run or a larger position within the company, which is great.”
In 2005, the dealership sold 24 cars between Jan. 1 and May 11. From May 12 to May 31 that year, it sold 80 cars. From that point on, Moreno and his team have been hitting their goal of 100 cars a month and then some.
“Our focus right now is really managing our growth,” he says. “We started with one dealership. We took over a small 200-car-a-year Lexus building. We finished the building in September 2008 right after Lehman Brothers collapsed. We used the opportunity to grow, and that growth was somewhat tame versus what we are doing today.”
Recently, Moreno has been expanding his business almost exponentially. Within the past year alone, the company has opened a Volkswagen dealership, a second Infiniti dealership, a new Nissan dealership, is building a new Mercedes-Benz dealership in Cincinnati and has been renovating several properties.
Moreno has plenty of projects to keep him busy. He has to buy the land for the new dealerships, build the dealerships, meet the individual car company’s requirements and hire people to run the dealerships. On top of all of that, Moreno still has to look after the other dealerships he has in operation.
Today, Moreno runs a collection of 24 dealerships, which led to the name, Collection Auto Group. The company is a more than 400-employee, $350 million car dealership group that sells Acura, Aston Martin, Buick, Fisker, GMC, Infiniti, Lotus, Mercedes-Benz, Nissan, Porsche, smart, Spyker, Vpg, Volkswagen and Maserati brands.
“It was never the intention to move to Cleveland to have a small little dealership,” Moreno says. “That wasn’t what I wanted to do. I didn’t necessarily think I was going to have 24 dealerships in seven or eight years, but I knew it wasn’t going to be a small dealership.”
Moreno may have been worried about car sales when the dealership first started, but in 2012 alone, Collection Auto Group sold 6,500 cars companywide.
“It’s is a big change,” he says. “Managing growth is like blowing up a balloon — you want to make sure you manage it properly, because otherwise you’re going to do it too fast.”
There are several factors that have helped Moreno and Collection Auto Group in its growth trajectory, but above all else, it comes back to the fact that Moreno loves cars.
“No. 1, you have to do what you love because if you’re not doing what you love, then you’re never going to be as successful as you can be,” he says. “For me, cars have always been a passion since I was a little kid.”
Another thing Moreno says has aided in his success is that he didn’t chase money. In fact, Moreno was making more money in Boston before he moved to Cleveland, but he wanted the opportunity to be his own boss.
“The biggest mistake people make is they follow money,” he says. “They’ll take a job because it pays more or they do this business because they’ll be rich. Money follows; money doesn’t lead.”
While people may make a certain move because it means more money, people will also find excuses for reasons that they can’t do something due to a lack of capital.
“If you have a great idea and you have passion, money will find you,” Moreno says. “When I bought Mercedes-Benz North Olmsted in 2005, I bought it with every dollar I had ever saved in my life. I joke that if I could have put a mortgage on my socks, I would have. It was never a scenario where I worried about getting the money to put this together.
“You have to ask yourself, ‘How badly do you want something? How badly do you believe that it can succeed? And how much do you believe in yourself?’ If the answer to all of that is at the top level, money will find you.”
Lastly, Moreno’s success has been made possible by the team he has put together at Collection Auto Group.
“You have to give people reason to follow you and be with you,” he says. “Why would somebody leave a job if not for the opportunity for personal growth, career advancement and learning? That’s the promise you have to deliver.”
Define your business
Once Moreno and his team started to get settled in Cleveland, the focus had to shift to creating a strong culture and one that would define how the business operated.
“You have to define your business,” Moreno says. “What business are you really in? A lot of my peers would say, ‘We’re in the car business. Look around, it’s a bunch of cars that we sell and service.’
“If you define that you’re in the car business, it’s an extraordinarily narrow definition. If you ask any employee in our company, whether it’s a receptionist, a car wash kid, a technician or a salesperson, they would say, ‘We’re in the customer service business.’”
Collection Auto Group sells cars, but it’s in the customer service business, and as a result, everybody understands that nothing is more important.
“When a customer walks through that door you should treat them like (they’re) the reason I’m here today, not like an inconvenience,” Moreno says. “My door is always open. If I’m willing to do that, what does it mean to everybody else in our organization?”
Moreno’s attention to clients goes far beyond making sure he gives them his time when they need it. He wants to change the car-buying experience.
“Some people hate buying cars,” he says. “But people love to buy iPhones. What’s the difference? The difference is that car dealers have made it painful for customers to buy cars. Car dealers have made the buying process completely unenjoyable, and it should be the complete opposite.”
Before Apple, people hated buying computers too. Now, people often just go to the Apple store to hang out because they made it fun and interesting.
“In the car business, it should be the same way, and the biggest thing that gets in people’s way is this fear when you walk through the front door that you’re going to be taken advantage of,” Moreno says. “Knowing that, we try to create a culture that says, ‘Let’s get rid of that anxiety.’”
Collection Auto Group tries to be extraordinarily transparent to make the negotiation process quick and easy. That transparency helps attract customers.
“If a customer walks in and they are looking at a Mercedes-Benz C300 and the sticker price is $42,500 … and their trade-in is worth $20,000, you have to ask yourself how much effort you are willing to put into this thing,” he says.
“How much are you willing to battle and let me wear you down? How much time do you want to spend wearing me down and are you willing to invest two or three hours to make that happen? Let’s say you do. At the end of three hours of going back and forth, how much do you really enjoy your car now? You hate it.”
Moreno utilizes the fact that customers these days are well-informed about car prices and what their trade-ins are worth; transparency and honesty with the customer saves time and effort.
“You know that I’m going to sell you the car for the price that’s going to be more than fair,” he says. “That creates a customer for life because they know that we will take better care of them than anybody else.”
Today, Collection Auto Group is well-established in the Cleveland market and sells all the car brands that it wants without any brand competing against another in the portfolio.
“Now that we’ve built this thing, we can take it for a drive and really expand exponentially with the brands we have right now,” Moreno says. ●
How to reach: Collection Auto Group, (440) 716-2700 or www.collectionautogroup.com
Takeaways
Do what you love and believe that you can make it successful.
Create a culture that separates you from competition.
Treat customers with respect and honesty and success will come.
The Moreno File
Bernie Moreno
President
Collection Auto Group
Born: Colómbia, South America, but he grew up in Fort Lauderdale, Fla.
Education: Went to University of Michigan and received his undergraduate degree in business.
Goal: To be the chairman of the board of GM
What was your first job and what did you learn from it?
At 12-years-old, I delivered newspapers at 2 a.m. in Fort Lauderdale. My mom also owned three real estate offices so after delivering newspapers I went to work for her and ran the bookkeeping at 14 or 15 years old. That taught me that family businesses are a challenge, and it wasn’t something I was interested in.
What got you into cars?
When I went to Michigan I worked for Automobile magazine.
What was your first car?
A Honda CRX. I saw it on the cover of Car & Driver.
What was your favorite car you have owned?
I had an ’89 Ford Mustang GT. That was the coolest car.
If you had to choose a car to own off one of your lots, what would you choose?
Cars are like your children — you’re not supposed to have a favorite. But for me, Mercedes are the cars that I’m most passionate about. If I had to buy one car, it would be a S63 Mercedes.
