The Wednesday auction of Joseph Prebul’s area car dealerships has inspired a game of musical chairs among local auto dealers who plan to relocate the businesses but keep them in the same regional market.
“I think every bid that was approved today envisioned moving the dealership from (its) current location,” said Jerrold Farinash, the court-appointed trustee in charge of liquidating Mr. Prebul’s assets.
Mr. Farinash held an auction Wednesday in U.S. Bankruptcy Court to decide the winning bids on Prebul Kia, Volvo and Infiniti stores in Chattanooga and Prebul Motors in Dalton, Ga., which sells Cadillac, Buick, GMC, Mazda, Pontiac and Kia.
Local dealers agree with Mr. Farinash on one point, saying Mr. Prebul’s absence likely will change the physical landscape of the Tennessee Valley’s auto industry. But they point out that competition will remain fierce because none of the brands are going very far.
AUTO LANDSCAPE The Wednesday auction of Joseph Prebul’s area car dealerships has inspired a game of musical chairs among local auto dealers who plan to relocate the businesses but keep them in the same regional market. The dealership bids did not include the car lots’ property or merchandise, which includes the vehicles, officials said, so there will likely be some shuffling and reconsolidation when the sales are finalized.
Johnny Pye and his son Sean submitted the winning bid of $100,000 for the Dalton dealership. The father-son team said they plan to consolidate with their existing Dalton-based business, which include Pye Nissan, Pye Honda and Pye Motorsports on Walnut Avenue.
The money Johnny Pye will pay — if he is approved as a dealer by the car manufacturers involved — only includes the right to sell those brands. It does not include the physical dealerships or the lots on which they sit.
Mr. Prebul’s lots all either are personally owned by him or owned by one of his companies, Carolex LLC, according to Mr. Farinash. Because neither Mr. Prebul nor Carolex has declared bankruptcy, those holdings will remain intact unless some additional deal is made, he said.
Mr. Pye said he hopes to be able to harness Mr. Prebul’s huge customer base and add it to his own.
“We want to take these customers from the other dealerships and make them Pye customers,” he explained.
Though the car business is tough these days, he continued, “we have to plan ahead and assume things are going to get better.”
The veteran Chattanooga-area car dealer said he anticipates a resurgence of American brands, and he wants to join that market.
“GM’s going to come back, and we want to be a part of it,” he said.
Area dealer Nelson Long said he feels just as strongly abut the Volvo rights he bid on Wednesday. Volvo is owned by Ford and, according to Mr. Long, has a strong following in the Chattanooga area.
“Volvo and Infiniti are both wonderful franchises,” said Mr. Long, who plans to buy both if his $500,000 offer is approved. He declined to say where the businesses would be located.
Fellow dealer Nelson Bowers, who has offered to buy Mr. Prebul’s Chattanooga Kia franchise for $300,000, could not be reached for comment Wednesday evening.
While bidders are optimistic, industry analysts’ predictions aren’t quite as rosy. The National Automobile Dealers Association forecasts that about 1,100 car dealers will close nationwide this year, compared with 150 to 200 dealers that will open.
There appears to be a fear of Chrysler closing in the Tennessee Valley because there has not been a single offer on Mr. Prebul’s Chrysler Jeep Dodge store on Chapman Road in Chattanooga.
But Chrysler Corp. spokeswoman Carrie McElwee said Wednesday that the company plans to re-establish a dealership in the Chattanooga market.
“We are very interested in being in the Chattanooga market, and we’re working with our Business Center (in Atlanta) to accomplish that,” she said.
Other Chrysler dealers in neighboring Catoosa, Bradley and Sequatchie counties chose not to submit bids for the Prebul dealership.
“I’m confident once the bankruptcy gets farther along, you’ll see somebody step in there,” said Mike Robbins, general manager for Ringgold Chrysler, Dodge and Jeep in North Georgia. “I can assure that eventually somebody will end up with the Chrysler dealership.”
Mr. Farinash agreed, and he said that once the company announces a bailout plan to secure its future, potential buyers probably will emerge. He plans to bring the matter up again at a hearing scheduled for April 9 in bankruptcy court.
As that hearing approaches, winning bidders for Mr. Prebul’s dealerships await final approval from manufacturers before moving forward with their plans. Both Mr. Pye and Mr. Long said they plan to recruit new employees from Mr. Prebul’s former payroll.
“We’ll need their expertise,” Mr. Pye said.