In the business of people
Business View Magazine interviews George Grubbs III, President/CEO of Grubbs Automotive, for our focus on the Texas Auto Sector
If anyone can say, “It’s in the blood” when it comes to professions, that person is George Grubbs III, President and CEO of Grubbs Automotive – a company that traces its roots back to George’s great-grandfather.
“Hubert Grubbs was in the grocery business back in the 1940s and he had a small grocery store in Dallas,” recounts Grubbs. “During World War II, the government asked all the auto manufacturers to stop making cars and start making war equipment, so no new cars were being built. Cars became very valuable, and my great-grandfather put a couple of used cars out in front of the grocery store. The next thing you know he’s making more money on cars than he is on groceries, so he said, ‘I think I need to be in the car business’.”
After the war, Dodge offered Hubert a new car dealership and the rest, as they say, is history. “My grandfather grew up watching his father sell cars,” Grubbs continues. “He got to learn the business and decided that’s what he wanted to do. So, when he got out of college he opened a used car dealership first, then purchased two Volkswagen stores. So, then my dad literally grew up on a used car lot, as they lived on the property. He learned the business from the ground up, and when he got out of college, he opened a dealership and continued to grow it. I’ve known the business from a very young age. My grandparents lived next door to us when I was growing up, so a lot of our dinnertime conversations were about the business. I tell people that I feel like I got my master’s degree in business from those conversations around the table. Like my dad and grandfather, I also learned the business from the ground up.”
Since 1948, the core belief system that was passed down from generation to generation is that they are in a business that relies on relationships. They take care of their people, who then take care of their customers, and everyone is valued and respected. Grubbs Automotive is still run as a “customer-first” business, and this “customer-centric” philosophy is part of everything they do in each dealership.
Grubbs Automotive consists of six franchises between three campuses located in Houston, San Antonio, and Dallas Fort Worth. These are Volvo, Acura, INFINITI, and Polestar dealerships. Consider that just seven years ago, George Grubbs Jr and George Grubbs III moved their only dealership, the INFINITI dealership to Grapevine, Texas. It was then the largest INFINITI dealership in the United States. Today, even during the pandemic, Grubbs Automotive was recognized as the number one dealer in the country – and its flagship dealership, number one in sales for both new and used INFINITI vehicles.
The pandemic has certainly posed challenges for all retail businesses, especially with supply chains as complex as those in the automotive industry. Auto dealerships, however, see more than their share of ups and downs. The path to success in the midst of this, according to Grubbs, is to diversify.
He explains, “When you look at it, the great thing about the car business is that it is really like five different businesses in one. You have new car sales, used car sales, service, parts, and now there’s an online wholesale function. We have lots of different areas that we can lean on whenever there’s any kind of economic challenge. Take for example when gas prices got really high and no one was buying large SUVs or trucks, the mindset on buying new cars got soft and our used car sales went up. The same thing happens when people stop buying new cars and hang on to their cars longer, then our service business goes up. With these separate little businesses inside our big business, we can swing one way or another depending on what’s going on in the economy.”
He adds, “Right now, with the pandemic, the new car supply is very tight. We have come full circle to what got my great-grandfather into the used car trade in the first place, a lack of new cars. So, we like to think of ourselves as used car dealers with a new car franchise. Because the used car side of the business is very constant. The new car side is up and down, whether it’s based on the economy or supply or even the quality of the vehicles. For example, each manufacturer goes on a cycle where they have a hot product for a couple of years and then they don’t have a hot product. But since we’ve always been heavy in the used car business, we have done well with that.”
Generations of business relationships do not hurt. There are purchases made by adults who remember coming to the dealership when they were kids with their parents. This adds up to a strong database of customers which has benefits to every aspect of the business. More people trust them with service, or buy cars from them, or trade in their used cars simply because they have always dealt with Grubbs.
To enable this, an organization must have a committed workforce, which, in a pandemic, has been a problem for many. However, Grubbs Automotive can boast really good employee retention. “I think this is because we are so family-oriented,” says Grubbs, “and we treat our employees as part of the family. That may have been one of the most important things my dad taught me. He used to say, ‘This employee that we have represents a family behind him, and so we’re not just employing one person, we’re employing a family’. It’s important that we take care of that. We provide an opportunity so they can take care of their family. Our current challenge is because we are growing and so we have to be actively recruiting more employees. We work with trade schools and have intern and apprenticeship programs. Especially when it comes to technicians to work on the car, qualified applicants are hard to find and so we are right there working with the schools.”
Grubbs Automotive also has a unique way of approaching community engagement. One example is where they have a program that earns a lot of donations for sponsors, such as schools. It started about 15 years ago, when they would set up at a school or a sporting event and do test drives on popular cars. Grubbs notes, “We donate $20 for every person who rides or drives in one of our vehicles. It is not about trying to sell a car at that moment – it is about raising money for a good cause. It also introduces people to us and introduces our product in a ten-minute time frame, but the truth is we have raised up to $5000 in donations per event for schools doing this. It is a real win-win situation.”
When it comes to technology, Grubbs Automotive has always been on the cutting edge. They went to portable tablets in terms of the sales and service experience over a decade ago, and they have been doing online sales for over seven years. For example, one of their franchises, Polestar, an electric vehicle manufacturer, has all the ordering and details of the purchase online at a kiosk. So you go to the store, see a display model, and then sit down at a computer and build your new car.
George Grubbs concludes, “Our industry is going through a lot of consolidation and change. I think there will be more of that in the foreseeable future, and I would like to be on the growth side of that and continue to add stores. We added two stores in the last few years and have opened three stores just in the last year, and as we have been doing that, we began to put a team together that will be able to move us into the future without sacrificing our own culture and tradition. I believe that growth is important, but you cannot lose who you are during that. We want to continue to stay the same company.”
He adds, “My grandmother is still alive at 91 and she is very proud of what we have become. I mean, she never imagined the volume we now have, or the buildings, and she is astounded by the growth. It is a great family legacy that I am proud to carry forward.”
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AT A GLANCE
What: A leading family-owned auto dealership group
Where: Headquarters in Grapevine, Texas
1500B E State Hwy 114, Grapevine TX 76051
Polestar was established as a new, standalone Swedish premium electric vehicle manufacturer in 2017. Founded by Volvo Cars and Geely Holding,Polestar enjoys specific technological and engineering synergies with Volvo Cars and benefits from significant economies of scale as a result.
Polestar is headquartered in Gothenburg, Sweden, and its vehicles are currently available and on the road in markets across Europe, North America,China and Asia Pacific. By 2023, the company plans to be present in 30 global markets. Polestar cars are currently manufactured in two facilities in China, with additional future manufacturing planned in the USA.
In September 2021, Polestar announced its intention to list as a public company on the Nasdaq in a business combination agreement with Gores Guggenheim, Inc. Full information on this definitive agreement can be found here
Polestar has produced two electric performance cars. The Polestar 1 was built between 2019 and 2021 asa low-volume electric performance hybrid GT with a carbon fibre body, 609 hp, 1,000 Nm and an electric-only range of 124 km (WLTP) – the longest of any hybrid car in the world.
The Polestar 2 electric performance fastback is the company’s first fully electric, high volume car. The Polestar 2 model range includes three variants with a combination of long- and standard range batteries as large as 78 kWh, and dual- and single-motor powertrains with as much as 300 kW / 408 hp and 660 Nm.
In the coming three years, Polestar plans to launch one new electric vehicle per year, starting with Polestar 3 in 2022 – the company’s first electric performance SUV. Polestar 4 is expected to follow in 2023, a smaller electric performance SUV coupe.
In 2024, the Polestar 5 electric performance 4-door GT is planned to be launched as the production evolution of Polestar Precept – the manifesto concept car that Polestar released in 2020 that showcases the brand’s future vision in terms of design, technology, and sustainability. As the company seeks to reduce its climate impact with every new model, Polestar aims to produce a truly climate-neutral car by 2030.
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