Auto dealerships are routinely bought and sold. But swapped?
In an unprecedented move, two prominent Denver-area dealers are exchanging their stores — lots, cars, employees and wrenches.
is taking over the Don Massey Cadillac dealership in Lone Tree. In exchange, Sonic Automotive-owned Don Massey is assuming control of Elway Chevrolet on South Colorado Boulevard.
Auto industry analysts said a dealership swap is unusual, perhaps unique.
“I’m not aware of any direct transfer of ownership between dealers, from one to the other,” said Tim Jackson, president of the Colorado Automobile Dealers Association. “I think it’s rare, safe to say. Maybe unheard of before, at least in Colorado.”
The swap is scheduled to become final by the end of the year. Under the deal, everyone employed at the Cadillac dealership still sells Cadillacs. Everyone working at the Chevy store still sells Chevys.
What’s changing is the names on the dealerships, and the corresponding owners.
Todd Maul, managing partner of Elway Automotive Group, described the transaction as “a win for both parties.”
It adds a luxury brand to the .
For Charlotte, N.C.-based Sonic, the deal provides a strategic piece of real estate on Colorado Boulevard next to at Colorado and East Kentucky Avenue.
Terms of the transaction were not disclosed. Some analysts said it may include a cash payment from Sonic to Elway because the Chevrolet dealership is larger than the Cadillac outlet.
Sonic declined to comment on the deal with Elway.
Maul said the Elway group plans to keep all of the approximately 50 employees working at Don Massey Cadillac in sales, service and parts. Elway Chevrolet employs 82.
The dealerships have different compensation structures for sales workers. Elway pays a flat salary; Massey uses commissions, according to Maul. He said that under Elway ownership, the Cadillac dealership will implement a “hybrid” compensation system.
For car pricing, the dealers have similar styles that allow for small-scale negotiations. Sonic is rolling out a no-haggle or one-price system at some dealerships across the nation.
The Elway group had purchased the Chevrolet dealership on South Colorado Boulevard from Mike Shaw in 2012. It leases the real estate from Shaw. Under the swap, Elway will purchase the site from Shaw then transfer title to Sonic.
Elway will continue to operate its Chevrolet dealership at 5200 S. Broadway in Englewood.
Steve Raabe: 303-954-1948, sraabe@denverpost.com or twitter.com/steveraabedp
