Ron Tonkin Chevrolet Company

views updated

Ron Tonkin Chevrolet Company

122 North East 122nd Avenue
Portland, Oregon 97230-2103
Telephone: (503) 255-4100
Toll Free: (800) 460-5328
Fax: (503) 251-5544
Web site:

Private Company
Employees: 76 (est.)
Sales: $66 million (2001 est.)
NAIC: 441110 New Car Dealers; 441310 Automotive Parts and Accessories Stores; 811121 Automotive Body, Paint, and Interior Repair and Maintenance; 811111 General Automotive Repair

Ron Tonkin Chevrolet Company has 16 locations in the Portland, Oregon, metropolitan area. Its 11 franchises sell Acura, Chevrolet, Dodge, Ferrari, Honda, Hyundai, Kia, Lincoln-Mercury, Mazda, Nissan, and Toyota vehicles. The company also has two dealerships selling Ducati, Aprilia, Cagiva, and MV Augusta motorcycles and the largest parts warehouse distribution center in the nation.

The 1960s and Early 1970s: The Youngest Chevrolet Dealer in the United States

In 1960, Ronald Barry Tonkin, a native of Portland, became the youngest Chevrolet dealer in the nation. Tonkin had had an early start in the auto industry when, as a boy, he began doing odd jobs at his fathers used car lot in Portland, Oregon. After World War II, Edward Tonkin opened one of the first KaiserFrazer dealerships in the United States, and Ron Tonkin, who did not yet have his drivers license, learned how to sell cars. When you cut your teeth on selling Kaisers and Frazers when others are selling Fords and Chevys, you ha[ve] to be a really good salesman, Tonkin expressed in a 1997 Oregonian article.

In 1954, Ron Tonkin, then a second lieutenant in the U.S. Army and a graduate of the University of Washington with a B.A. in business administration, officially joined the family business, following in the footsteps of his brother, Marv. Tonkin became secretary-treasurer and general sales manager of Tonkin Motors Inc. When the brothers learned that Kaiser was going out of business, they shifted to selling AMC Ramblers in 1954. In 1955, they bought out the Lyman Slack Mercury dealership.

Finally, in 1960, Tonkin struck out on his own with a $100,000 loan from First National Bank. Selling his share of Tonkin Motors to Marv, he bought the Gregg-Owens Chevrolet dealership in Portland. He used the loan to buy everything he needed, including the shop, fixtures, equipment, used cars, parts, and accessories. I decided we were going to be profitable, and we never looked back, he said in a 1997 Oregonian article. Sacrificing family time to work until 10:00 at night 364 days a year, Tonkin made sure he met his obligations to employees, creditors, and customers. I had to put those hours in, he said. I was driven with ambition to succeed, and I love cars. Tonkins sales volume quickly soared, and within five years he had outgrown his facilities.

Ron Tonkin Chevrolet moved and took over a five- to six-acre plot on the edge of Portland in 1965. There, Tonkin built the largest automotive center in the Northwest at a cost of somewhere between $500,000 and $600,000. The new location operated on two shifts, remaining open from 6:00 in the morning until 10:00 at night. It stocked 400 cars and trucks, with 250 vehicles prepared for display outside under lights; it had three rotating concrete pads to spotlight vehicles. Nine salesmen roamed the 40,000-square-foot showroom and service building while the newly completed service department serviced up to 50 cars at a time.

The business kept growing, and in 1968, Tonkin expanded his Chevrolet franchise by purchasing another local Chevrolet dealership. When General Motors denied him a Pontiac-GMC franchise in 1969, he turned to Honda Motor, lobbying to become their sole U.S. distributor, and began selling Hondas that year. Everyone kind of laughed at that first car, Tonkin later recalled, but when the gas shortage hit, the thrifty, no-frills, dependable cars took off. In 1973, Tonkin enlarged his business by adding auto-painting facilities that met pollution authority standards; he was the first dealer to do so in the West.

Tonkin also had begun branching out in a slightly different direction in 1966, selling Ferraris at the Gran Turismo store he opened in Portland. That dealership was less successful than Tonkins others, until in 1973 the formerly unprofitable luxury car business moved to a different location and began selling Saabs, Alfa Romeos, and a few Maseratis as well. In 1974, Gran Turismo sold more Ferraris than any other dealership in the United States.

The Late 1970s and 1980s: Riding the Industrys Waves

The late 1970s saw the downsizing of many American cars in response to the gas shortage of 1973 and 1974 and the selling out of some dealerships nationwide. Ron Tonkins business, however, never had a bad year, according to Tonkin in a 1979 Oregonian article. In 1976 we doubled the best year wed had and in 1977 we tripled 1976. In 1978, we almost doubled 1977. In 1979, Tonkin bought two new properties, one for his Gran Turismo dealership and another on which he expanded his car leasing company and established a showroom for luxury cars such as the DeLorean. In addition to selling new and used cars, Tonkins company did a healthy business in its parts and service departments and body shop.

By the early 1980s, consumers had begun embracing the new Japanese cars while Chrysler, Ford, and General Motors experienced heavy losses. Fortunately, for the big three, however, informal restraints on imports allowed them to direct their attention to product redesign. In addition, efforts by the United Automobile Workers to hold down manufacturing costs, as well as the plunging dollar, wiped out former differences between American and Japanese production costs. But the 1981 to 1982 recession put 5,000 dealers out of business nationwide. Of the remaining 25,000, many, like Tonkin, began the shift to become megadealerships, businesses that offered many different lines of cars and survived through economies of scale and a better distribution system.

Tonkin continued to prosper. In 1980, the company purchased a Toyota dealership. In the fall of that year, it finished building its $700,000 world headquarters in Portland, which included Tonkins in-house Roto Advertising agency and a home for his Gran Turismo dealership. The Gran Turismo showroom, described by Tonkin in the Oregon Journal in 1981 as a place for big boys toys, a place for people to have fun, showcased Cavallino, a sculpture of a horse made by Chicago artist John Kearney out of old automobile bumpers. A heated building with overhead skylights behind the showroom housed the rest of Tonkins exotic car stock, including vehicles from his personal collection. In 1982, Tonkin Co. ranked 63rd in the list of Oregons top 100 private businesses with sales in the $40 to $49 million range.

Beginning in 1983 and continuing for the next five years, auto sales were again strong. Throughout this period, Tonkins business continued to expand. By the mid-1980s, Ron Tonkin enjoyed the reputation of being a shrewd businessman who seldom chose a loser. Tonkin himself attributed his business success to his decision to diversify, which allowed him to compete with higher interest rates and the souring regional economy, and put him in a position to better cope with adversity than someone with one franchise, as he described it in a 1984 Business Journal article. In 1984, Tonkins company had annual sales volume of more than $50 millionabout one-tenth of the total volume in new passenger cars sold in the four-county metro areaputting it at the top of the industry statewide. The business sold nine different makes of cars at six Portland area outlets. Between 1984 and 1986, Ron Tonkin Cos. added several new dealerships, including one of the first Acura franchises nationwide.

Tonkins sons, Bradley, Edward, and Barry, also joined the business in the mid-1980s when he handed over his Mitsubishi franchise to them. Brad Tonkin became general manager of Tonkins Honda dealership in 1984, and by 1986, Ed Tonkin had become vice-president and general manager of Tonkins Chevrolet operations.

Auto sales boomed through the mid- to late 1980s, and dealerships sold for a premium above the value of their assets. But by the late 1980s, car sales had once again begun falling, and by 1988, the car manufacturing industry was dealing with an overcapacity of cars. This situation and the establishment of the megadealer in the 1980shaving somewhat altered the balance of power between manufacturers and dealersled General Motors to make an unprecedented concession to dealers in 1988, allowing them to sell more than two General Motors lines. Up until that time, the manufacturer had limited franchises to dealers in an effort to ensure that they pushed GMs options.

Yet despite layoffs and plant shutdowns and a 6 percent decline from 1988 total sales for American automakers, 1989 was still the sixth best sales year for motor vehicles in the United States. Dealerships, however, averaged a profit of only about 1 percent of their pretax revenue in the last years of the decade. To capitalize on the auto market downturn, they continued to enlarge. Friction developed between dealers and the auto manufacturers that wanted dealers to bear more of the costs of marketing and devote more attention to their brands.

Company Perspectives:

Ron Tonkin Dealerships is in the automobile industry to satisfy the transportation needs of our customers better than anyone else and to be successful and profitable in everything that we do. We have operated in the Portland metropolitan area because we believe in our community and have been in business for 42 years. We have been successful for so many years because we are fair and honest which in turn retains loyal customers. Our reputation in the Portland metropolitan area speaks for itself. We have a high retention of customers because we offer everything from the entry-level automobile to the luxury automobile and we stand behind every vehicle that we sell.

Tonkin, as the president of the National Automobile Dealers Association (NADA) in 1989, pledged to take the auto manufacturers head-on on critical issues such as dealer profitability, secondary distribution, fleet subsidies offered rental companies, and basic decision making. In Automotive News in 1989, he vowed to create a new awareness of dealers, enhancing their self-esteem and self-worth in the triangle that makes up this industrythe manufacturer, the laborer, and the dealer. [T]oo often our industry has been influenced by what the automakers say and do and by what labor says and does, and the dealers have been at the mercy of whatever decisions are made between those two entities. Tonkin wanted dealers to be able to make a 3 percent profit. He created a dealer group called the Rough Riders to fight automaker practices such as rebate plans, discounts to fleet buyers, and mandatory ad associations. Automotive News voted him industry leader of the year in 1989, dealer of the year, and foremost in dealer relations.

By 1990, 2,000 dealers had joined Tonkins Rough Riders. At the kickoff of the NADA convention that year, Tonkinwho had then completed his term as presidentannounced that he had filed suit to prevent automakers from selling cars to fleet buyers at prices below those they charged dealers. Tonkins successor at the NADA lacked his predilection to be a firebrand, however, and the Rough Riders soon disbanded.

The 1990s and Early 21st Century: Continued Success

Stepping out of the spotlight, Tonkin turned his attention once again to his business, and in 1991, the company started Tele-Drive, a copyrighted system whereby prospective buyers called a toll free number for detailed information on the approximately 2,000 cars for sale at any time in the Tonkin dealerships. Customers who determined that the car they wanted was in stock could make an appointment to drive it within half an hour. By 1993, the company was carrying 11 makes of cars, including the Kia, for which it was the only American dealer.

Low interest rates, a strengthening Oregon economy, and pent-up buyer demand fueled sales increases throughout most of 1993 in the auto industry. By 1995, Tonkins sales had topped $250 million to make its fifth record-breaking year in a row. The Tonkin dealerships sold cars and trucks in nine locations and employed more than 500 people. It became the first West Coast dealer to sell the Vector M12 sports car and also began to sell an electric-powered bicycle, the EV Warrior, made by Electric Bicycle Company of California.

During the second half of the 1990s, Ron Tonkin began winding down his daily involvement in the family business. But unable to avoid the gasoline in his veins, he served as chairman of the NADAs Political Action Committee, the eighth largest PAC in the United States. Automobile News awarded him the industrys triple crown as industry leader of the year, automobile dealer of the year, and the individual who had had the greatest impact on dealer relations. In 1997, the company, under Ed Tonkins direction, purchased Valencia Acura in Valencia, California.

In 2001, Oregon Business Magazine ranked Ron Tonkin Chevrolet Co. third of the 100 best large companies to work for in Oregon. Wards Dealer Business magazine named the business one of its dealer of the year finalists for innovation in the industry. Although in 2002 Tonkin dealerships had to pay $12,500 to Oregons consumer protection and education fund to settle charges of misleading advertising, Edward Tonkin was one of 66 dealers to receive Time magazines quality dealer award in recognition of his exceptional performance in the dealership and community service. In 2002, Tonkin Chevrolet Co. took yet another step forward to become the largest dealer-owned wholesale parts distribution center in the country when it consolidated its wholesale parts dealerships in a newly constructed 18-acre, 180,000-square-foot centralized parts facility and sheet metal center.

Principal Subsidiaries

Ron Tonkin Toyota Inc.; B & E Import Co. (dba Gresham Honda).

Principal Competitors

Braley and Raham Auto Mall; Rey Reece Dealerships.

Key Dates:

Ron Tonkin joins Tonkin Motors selling KaiserFrazer automobiles.
Tonkin sells his share of Tonkin Motors to his brother and buys the Gregg-Owens Chevrolet dealership in Southwest Portland.
Ron Tonkin Chevrolet moves and builds the largest automotive center in the Northwest.
Tonkin begins selling Ferraris at his Gran Turismo store in Portland.
Tonkin becomes the sole U.S. distributor of Hondas.
Tonkin enlarges his business by adding auto-painting facilities that meet pollution authority standards; the Gran Turismo store moves to a new location.
The company adds a Toyota dealership and completes its new world headquarters.
Tonkin Co. ranks 63rd in the list of Oregons top 100 private businesses (sales $40 to $49 million).
Ron Tonkin becomes president of NADA.
The company purchases Valencia Acura in Valencia, California.
The company constructs an 18-acre, 180,000-square-foot centralized parts facility and sheet metal center.

Further Reading

Brown, Craig, For Ron Tonkin, Theres No Slowing Down, Oregonian, June 28, 1997, p. DT01.

Cour, Brian, Million Dollar Showroom Greets Customers for Exotic Dream Cars, Oregon Journal, October 2, 1981, p. 13.

Crick, Rolla J., Tonkin Readies New Plant, Oregon Journal, July 13, 1965, Sec. 3, p. 7.

Friedman, Jack, Car Megadealer Tonkin Steers for Stock Offering, Business Journal, July 22, 1985, p. 1.

McGill, Andrew R., Ron Tonkin: The Outspoken NADA President Elect Is Preparing to Make Waves in 1989, Automotive News, January 23, 1989, p. E8.

Noles, B.J., Tonkin Auto Businesses into Third Generation, Oregonian, December 5, 1978, A 15.

Olmos, Bob, Ron Tonkin Says His Auto Sales Brisk, Oregonian, August 15, 1979, p. D1.

Ron Tonkin: NADAs President Sees Another Tough Year Ahead for New Car Dealers, Automotive News, November 20, 1989, p. E20.

Treece, James B., Will the Auto Glut Choke Detroit?, Business Week, March 7, 1988, p. 54.

Carrie Rothburd