JM&A May Buy F&I Companies to Grow in West
Financial services giant JM&A Group, a powerhouse in the Southeast, is aiming to grow in the rest of the United States. The main target for expansion is the West, and JM&A executives say they will consider purchasing smaller providers to pick up share in the finance and insurance market, reported Automotive News. But executives also have expanded the sales team and increased marketing and incentive budgets to help pitch JM&A's services to large dealership groups west of the Mississippi.
That market is largely untapped by JM&A, a unit of JM Family Enterprises, the Deerfield Beach, Fla., company founded by Jim Moran. The F&I unit got its start 32 years ago acting as a captive finance company for Toyota dealerships in Florida, Georgia, Alabama and the Carolinas that were serviced by JM's Southeast Toyota, exclusive distributor of Toyota and Lexus vehicles in that corner of the country.
"We have a 30 percent market share in the Southeast, and there is no reason we couldn't achieve the same market share over time across the country," said Colin Brown, CEO of JM Family Enterprises. "There is a lot of growth out there" even if industry volumes don't come back, he said.
That share -- or penetration rate -- means JM&A sells at least one product on three of every 10 new and used vehicles sold in the Southeast. On the East Coast, penetration is 8 percent. It's 6.6 percent in the West and even lower in major Western states such as California and Nevada.
"As we get beyond where we started, the opportunity tends to really stick out," said Forrest Heathcott, president of JM&A. "Those are some pretty key markets where there's a lot of population."
In the next five years, JM&A intends to boost penetration in the West to 10 percent, Heathcott said. He said it could take 15 years to match the 30 percent share of the Southeast.
"These are big decisions for dealers to make, and they don't come quickly," Heathcott said.
To accelerate the expansion, JM&A has "budgeted for some very thoughtful, formidable acquisitions," Heathcott said. He wouldn't share numbers but said JM&A already is in discussions with independent agencies and smaller insurance companies.
Heathcott said JM&A increased its marketing and incentive budgets about 25 percent each this year. Incentives typically include dealer rewards or trips.
Growth by acquisition would be a first for JM&A, Heathcott said. The acquisition target area includes California, Washington, Oregon, Arizona, Texas, Oklahoma and Colorado.
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