Brad Cobb was headed for a career in law in 1992. But a summer job selling Saturns for Chattanooga Dealer Nelson Bowers turned into a lifelong career.

Bowers recognized early on that Cobb could go places in the industry. So he offered to fast track him into management while sending him to NADA’s Dealer Academy.

Today, Cobb is the President of Bowers Automotive Group overseeing eight dealerships and four large body shops. In those twenty plus years, Bowers, eventually becoming Cobb’s father-in-law, sold all of his stores except one to the Sonic Automotive Group, leaving Cobb to run the Toyota store in Cleveland, TN.

Cobb, along with Bowers’ son-in-law began adding dealerships growing the group back to its present size. The team is conservative but likes to take chances. Today, the eight stores selling Audi, Hyundai, Honda, Kia, Toyota, and Volkswagen generate approximately $300 million in annual revenue.

Cobb leads with a humble and collaborative approach and likes to credit his team and his mentors Jeff Rachor and Nelson Bowers.

Cobb talked with Dealer magazine from his office in Chattanooga about the group and its structure; homeruns and mistakes made along the way and where he sees the industry going.

A Dealer magazine exclusive interview with Brad Cobb, President of Bowers Automotive Group.

Brad, you didn’t set out to be a car dealer, correct? At one point you were planning on going into law?

Right. That was a long time ago. I had come home from school for the summer and was going to work as a paralegal or intern type at a firm. I talked to a friend of my father’s who was an attorney. He told me I’d only be a runner type and that I should instead go make some money to pay for law school.

My dad suggested I sell cars. I had done well selling medical supplies. It was in 1993 and I started selling Saturns.

That first month I had made more money than I ever had and was having fun doing it. I kind of fell in love with the car business.

The gentleman I was working for, Nelson Bowers, owned a platform of stores. After a while, he offered to send me to NADA’s Dealer Academy and fast-track me into management if I stuck with it and continued working hard. Nelson later became my father-in-law.

But at the time, I was just a guy working for him. He gave me some unbelievable opportunities including setting me up with Jeff Rachor, who became my mentor and one of my best friends. My daughter is his goddaughter and his son is my godson. We still talk a couple times a month.

(Editor’s Note: Jeff Rachor later worked at Sonic Automotive Group as its President, then served as Pep Boys CEO before working for Michael Dell’s private equity firm. Since 2010, he has been with the Van Tuyl Automotive Group.)

You and Jeff worked together?

Yes. At the time, Jeff was running Nelson’s Toyota store in Cleveland. When I decided to stay in the car business, Nelson sent me to Cleveland to work under Jeff. So, I rode with him for about five years.

Nelson ended up making Jeff a platform manager so I took over the Toyota store. Not long after that, we purchased a BMW and Volvo store which I started running. So, here I was at age 28 running four stores – BMW, Infiniti, Volvo and Jaguar — having the time of my life selling a lot of cars and making a lot of money.

At some point, didn’t Nelson sell several stores to Sonic Automotive?

He did. It was around 1997, Nelson said to me he had good news and bad news. He told me he was selling all his stores to Sonic and retiring. But he was keeping the Toyota of Cleveland store and I was going to go back and run it again.

So, I went from driving a 7-Series to driving a Toyota Corolla — starting all over again.

You guys started buying stores again after that?

We did. I was at the Toyota store from 1997 to 2008. We went from ten brands and eight rooftops in 1997 to just one store. Nelson retired but his son and I (and another partner who came in later) bought some stores and now we’re back up to eight. Nelson also came back and helped with the growth period when his non-compete ran out after he left Sonic. We also have the four large body shops.

We’ve had different ownership structures but Nelson and I have been the consistent thread throughout.

Jeff went with Sonic when the acquisition happened. Nelson did too, working in acquisitions for Sonic for about a year.

We worked real hard, had a fantastic team, and some luck along the way. The key to our success has been our people. Nelson was also was a great mentor to me. We’ve been able to get the group back up to $300 million in revenue and we’re doing pretty well.

That’s the quick story.

It was your father who suggested you sell cars. Was he in the business?

No. He had gone out on his own when he was 30 working as a manufacturer’s representative. He was on the road selling and would often take me with him. He was good with people and was able to take care of his family selling manufactured products.

I guess that kind of filtered down to me. For me, selling is the most fun part of our business. I love it. As I moved up the ranks, I found people who have the same passion as I do.

Describe the management structure at Bowers.

We have a great management team. The corporate office here in Chattanooga is small. The way it’s set up is that we have five people in the corporate office. Myself, David Plummer, our CFO, Jennifer, who handles accounting, and two administrative positions.

David has been great. He’s been in the industry for a long time. In fact, early in his career, he worked for the Dobbs group out of Memphis when they were in their growth mode, and spent almost eight years as Senior Vice President and Corporate Controller at Sonic Automotive. When he came on board, he brought a real focus and discipline on the numbers and that’s been a huge part of our growth. He really is one of the main keys to our evolution and success.

We have eight locations and ten dealerships. All of our general managers are partners and we give them a lot of autonomy. They make the decisions and we hold them accountable. They pull the trigger on anything from advertising to hiring and firing of personnel – pretty much everything.

We handle the banking relationships and insurance contracts – all of the big picture stuff — that’s our job here in the corporate office. We give the general managers their budgets and let them execute them.

I like to call myself an overpaid cheerleader, because our managers are great. They’re loyal, hard-working, and are tougher on themselves than David or I could ever be.

David, Jennifer, and I visit each store at least once a month and meet with all of the managers. We go over seventeen different reports. If nothing catches our attention, we move on. Once we finish that, we go over a seven-page trend report with them just so we have the numbers in context.

We also try to bring ideas from other stores that they might want to consider implementing. We hold an annual retreat each year to talk less about the numbers and more about ideas.

I’m not nitpicking asking them about every decision. We want our partners to have autonomy, but I’m just a phone call or text away. I like them to be able to bounce ideas off of us, and we’ll do the same with them.

That’s a pretty collaborative approach. What caused you to develop that way as a manager – or leader?

I think how I got to this point is due to working with Nelson and learning from him. It’s the way he operates. I also looked at guys like Terry Taylor who owns AMSI and that’s the way he’s managed his businesses.

You mentioned having four body shops?

We partnered with ABRA Auto Body and Glass out of Minneapolis. Before Nelson sold his stores to Sonic, all the dealerships were feeders to our local ABRA. After the sale, the guy running them went from a full work load to having to start from scratch and rebuild his whole customer base. He has done an incredible job by not only filling that shop again, but creating enough throughput to need three more facilities.

The reason we stayed with ABRA is it’s easier to have a body shop business with a well-known chain instead of having it branded as a Toyota or Honda or whichever brand you’re selling.

We’ve learned that efficiency and insurance cycle times are the most critical pieces for a successful body shop – that, and customer satisfaction.

We meet with ABRA’s executive management team monthly to review all the metrics that make a body shop successful. One of the most important things we learned is low cycle time is key to keeping insurance companies and more importantly customers happy. It’s all about cycle time today – in and out; lower rental car usage; customer being without the car the shortest time possible. Having low cycle times means the insurance companies will put in their DRP (direct repair programs).

Tough business to make money in, though.

The dealers that make money with their body shops are the dealers who don’t stick their noses in the business trying to run it. Instead, they hire folks who know what they’re doing.

You started selling Saturns in 1993. That was fairly close to when that brand got its start.

You’re right. Obviously, we were in Chattanooga – only a couple of hours from Spring Hill, where the plant was. That was really cool. I was able to go to several of the management and sales training classes there.

It was early at the beginning of the brand and a lot of fun. It was like, ‘Here’s the price.” There was demand for it at the time because the model was so new. It obviously gave me a false sense of success.

Not long after that, I moved to the Toyota store and that was when Toyota was getting real hot. The margins on the Camry were huge — $3,000 – $4,000 at the time. I had two of the best people in the business teaching me. Jeff taught me the numbers and how to manage the financial statement.

Nelson taught me the importance of customer satisfaction and taking care of your people. That’s what he was known for. It was a great deal for me.

Meanwhile, after Nelson had sold the stores, his son and my brother-in-law bought a Honda store. He was only 24 and I was 28. I tell this story often – the bank financed it 100%, we put no money down. It was millions of dollars we owed. We got lucky and worked real hard to pay down that debt, which we did. We were extremely conservative taking money out only to pay taxes and pay down the debt.

Looking back, no bank would do that today and I don’t think I’d do it the same way either. We laugh about it, but I’d rather be lucky and dumb than good any of the week.

Did you buy other stores?

We did acquire a Chrysler Jeep store. I don’t know if this is true, but I was told we were awarded the last Plymouth franchise about that time. The Chrysler Jeep store turned out not to be a good fit for us so we shed that dealership four years later.

I think that’s another important factor for our team – we’re humble enough to know we can’t do everything. We are conservative but we do take a lot of chances.

Did your experience with Saturn color your perspective on one-price selling?

You know, I’m really not a fan of one-price. I do think the OEM margins on new cars are pushing us in that direction in some cases. Certainly, the days of the huge margins are long gone.

Maybe we’ll get pushed in that direction but the experience we’ve had in our eight stores is that the customer still likes to haggle a little bit. Maybe we’ll be more one-price selling within $1,000 — if that makes sense.

We also do a lot of market-based pricing – using vAuto, AutoTrader, and Internet pricing. However, we still like to leave ourselves a little room.

You have six different brands. Are you happy with what you have? Are you looking to add stores?

I’m probably going to sound like a commercial for our brands. We sell Audi, Honda, Hyundai, Kia, Toyota, and Volkswagen; every one of them are fantastic brands. We couldn’t be happier with what we have. The product is strong and the support is good.

We’re going through a little bit of a transition in the market with our Audi store. Because we’re one of the smaller dealerships, the inventory is a little bit of a struggle, but what a strong brand and product they have.

We’re always looking to add if it makes sense. Sometimes we’ll land a deal and other times, we’ll get down to the end and not get the store for whatever reason. Nelson’s taught me not to get emotionally attached to a deal until it gets done.

There’s always going to be another deal. Often, we’ll end up being glad a deal didn’t work out.

What’s the most challenging part about the business for you?

I would say it’s getting all of our eight stores and four body shops on target every month. This year, in January and February, we lost several days due to weather. I feel bad for our management team when things like that happen because they work so hard. We’re having a great year now – everyone is ahead of last year.

You said earlier when you started selling cars, you were having a lot of fun. Are still able to be involved in selling cars?

Absolutely. My office is in the Volkswagen store. I was born and raised in Chattanooga so I have a lot friends and contacts here.

I think I’m involved at some level with selling fifteen to twenty-five vehicles a month. This week I’ve already helped our team sell seven vehicles. I’ll get a lead, call the right GM to hand it off. I still demo cars on a regular basis, depending on the needs of the customer.

The only thing I don’t do is the delivery. I’ll let our folks take care of that, but I’m often in the process till the end.

How is the pre-owned business in Chattanooga?

For us, we’re almost one to one new to used. We’re actually implementing a strategy now to help us move into selling lower-priced pre-owned vehicles instead of taking them to the auction. It’s real important for us and it’s making us a lot of money.

Tell us about a recent initiative that’s been a homerun for you.

We recently consolidated our BDCs into one BDC. A BDC is only as good as the person running it. In a smaller store, that’s probably going to be the sales manager, who likely doesn’t have much interest in managing people sitting in front of a computer all day.

Now at our Toyota store, the BDC was running great, so that was the toughest one to blow up. Since we’ve moved to that strategy of a consolidated BDC, we’re seeing a huge return on investment. We’re still in the incubation period but we’re happy with it.

We hired a couple of managers to run it and have staffed it. Their focus is to set the appointment. We know that if we can get a person into the dealership, we’ll sell them a vehicle.

Let’s flip the question. Is there something you’ve done recently that you wished you hadn’t done?

I was hoping you were going to ask this one. It’s an easy answer. We had a great year in 2012. We kind of got caught up in the moment and going into 2013 made the conscious decision to dial back all of our traditional advertising and pour most of that money into Internet advertising. We were already spending money with AutoTrader and Cars.com — that’s the price of admission in the automotive business – but we began buying deeper.

Now a couple of our stores did well, but others began to see a significant decline in traffic. It took us four months to figure it out and another two months to unwind some of the damage. We learned some of our customers for certain brands still don’t spend a lot of time online and are more emotional, call-to-action type buyers.

We had to learn again not to push our GMs too hard. We have to let them make the decisions.

How do you see the future playing out in the industry?

Well, I do think we’ll continue to see the compression of margins for some of the brands. I also think the brands that succeed are the ones that will be able to get new products to the market faster.

We’re already seeing technology play a greater role in the business. Just the other day, one of our used car managers participated in two different auctions taking place in two states simultaneously. He was able to buy seven cars between the two auctions. He did it all online.

I don’t think we’ll see the transaction migrate completely online – especially in our market. People will still want to kick the tires and come into the store.