Shareholders in Sweden's Bilia AB dealer group owe their good fortune to a couple of key Bilia strategies: selling off unprofitable dealerships in Germany and focusing more on the service side of its automotive business in Scandinavian countries.
Bilia was the No. 1 creator of shareholder value in the year that ended March 31, with a return of 80 percent. That compared to 8.3 percent gain for retailers as a whole.
Based in Gothenburg, Sweden, Bilia sells Volvo and Renault cars and trucks as well as Volvo construction equipment in more 11 European countries.
But most of its annual revenue, about A1.21 billion last year, came from passenger car sales from 140 outlets, primarily in the Nordic countries.
With the truck business representing another A606 million in 1999 revenues, vehicle sales amount to about 70 percent of Bilia's annual turnover, compared with 30 percent from the service side.
But the service business accounts for 80 percent of Bilia's profits, said Kjell Akesson, who took over as Bilia chief executive one year ago.
Akesson said in the past year he has tried to put even more focus on service. 'I stressed we are a service company. If you look at other countries in Europe, very few dealers have the same ratio of profits from service.'
Bilia has introduced new service packages to lure and keep both new and used vehicle buyers.
Car dealerships in Germany, where Bilia's market share and profits from service were small, were sold last year. Earlier this year Bilia sold its lone French car dealership, in Paris, and will sell another one in Milan in 2000. Bilia didn't exit the truck business in those three countries but is instead building it up through acquisitions.
Bilia also owns 46 percent of Autobytel AB, the Internet car selling giant that has been launched in Sweden and will go online in other Nordic countries later this year.