Webbs Agree to Purchase 3 Irvine Car Dealerships
A major Southern California auto dealer has agreed tentatively to acquire three new car dealerships in the Irvine Auto Center from Cerrito Management Group of San Jose in a deal that sources said could be worth $20 million.
Lewis Webb and Lewis Webb Jr., owners of six dealerships in Los Angeles and Orange counties, are purchasing the three dealerships, Irvine Toyota, Irvine Nissan and Irvine Mitsubishi, sources said.
Lewis Webb Jr. declined comment on the deal Thursday, saying he could not discuss it until today. Officials at Cerrito, a holding company that operates several dealerships in Northern California, could not be reached for comment.
Industry sources said that Cerrito has been trying to sell the dealerships for nearly three years and that the asking price was as much as $20 million.
While business at the three dealerships reportedly has dropped off in recent years, the price tag has remained high because of the increase in local land values, several sources said.
The Irvine Auto Center, just north of Interstate 5 near the confluence of the Santa Ana and San Diego freeways, is considered valuable because of its high visibility location.
Completion of the sale appears to be contingent on a complete inventory currently under way at the three car lots. The inventory is expected to be completed by the weekend.
One of the dealerships, Irvine Mitsubishi, apparently will be reopened with a new line of cars. The lot has been closed and its telephones have been disconnected.
A spokesman for Mitsubishi Motor Sales of America said that Webb declined to negotiate a new franchise contract after he agreed to acquire the facility from Cerrito. The Mitsubishi official said franchise negotiations with another dealer in the Irvine Auto Center are almost completed.
At Irvine Toyota and Irvine Nissan, service department employees have been turning customers away all week, telling them that the lots were closed because of an inventory but would reopen on Monday.
Auto Age, an industry trade publication, ranked Cerrito as the 41st largest car dealer in the nation with 1988 sales of $213 million at its 12 dealerships. The three Irvine lots accounted for $71 million in sales, including used cars and parts and service. Jeremy Anwyl, president of USP Automotive Advertising in Irvine and a specialist on the local auto dealership industry, said Cerrito overexpanded in Northern California, building a number of new dealerships just before the computer and aerospace industry crunches cut deeply into the San Jose-area economy.
“They have been pulling cash out of the Orange County operations to keep things going up north,” Anwyl said. He said the three Irvine dealerships are being sold to raise much-needed cash for the Northern California operation.
The Webb operation is a fast-growing one that began in the Los Angeles County community of Cerritos. The Webbs own Toyota of Cerritos, Lexus of Cerritos--Toyota’s luxury car line--and Buick Mart, also in Cerritos.
In Orange County, they own the Buena Park and Mission Viejo Toyota dealerships and a recreational vehicle dealership in Los Alamitos called Aero Motors.
Acquisition of the three Irvine dealerships will give them nine separate new car lots and make the Webb organization one of the largest of the new breed of super dealers who are coming to dominate the new car retailing scene.
Other major auto groups in Orange County include the Campbell Automotive Group in Irvine, which has 10 new car franchises on eight lots in Orange County; the Tustin-based MacPherson Enterprises group of five new car dealers and an auto leasing operation, and the Fairway Group in Placentia, operator of six new car dealerships.
