Dalton Motors continued its U.S. expansion with the acquisition of a Hyundai franchise in National City in Southern California on January 31.

Dalton aims to bring the same approach to absorbing this new location that has proven so successful with the National City Subaru and Toyota franchises it acquired in late 2022.

“The Hyundai store makes sense for us in the platform,” Juan Carlos Rodriguez Villava, CEO of Dalton Motors, tells Getting to Go! “We kept the same people in the operation. Now we just transform to the Dalton mindset and go into the expansion mode.”

The Hyundai franchise – now called Dalton Hyundai National City -- was part of Frank Motors, which also owned the Subaru and Toyota franchises Dalton acquired in November of 2023.

The gap between the two acquisition tranches was strategic, Rodriguez says. Acquiring the Toyota and Subaru franchises first allowed Dalton to become more familiar with the market and the local teams, he says.

“It was part of a plan to set up our operations here with the first two franchises,” Rodriguez says. “It became relevant for us to prove ourselves as a good operator in the U.S.”

It did that by taking Dalton Toyota National City from 45th in sales in the Los Angeles region to 20th in just one year, Rodriguez says. “That gave us a platform move forward with Hyundai.”

Dalton Motors is part of Dalton Corporation, a conglomerate headquartered in Guadalajara, Mexico. The corporation has five business divisions, including real estate, financial, innovation, automotive, and the Dalton Foundation.

In Mexico, Dalton’s automotive division includes Toyota and Hyundai franchises among its many brands.

While some of its other divisions have international operations, the acquisition of Frank Motors’ National City Toyota and Subaru franchises were Dalton’s first automotive dealerships transactions outside of Mexico.

National City is only seven miles from the border with Baja, Mexico and the population is more than 65 percent Hispanic. That makes it a good fit with Dalton, Rodriguez says.

Dalton is already very involved in Spanish radio as well as “activities targeting Hispanic communities,” he says.

But Dalton isn’t looking to bring staff from its Mexico operations to run the stores. It kept all the staff that wanted to stay with the new owners, Rodriguez says.

“Sometimes there is an idea that just because you have been successful in your market you can replicate that,” he says. “For us it is that each area has a uniqueness.”

Members of the Frank family even stayed on as part of management.

“We have a fantastic relationship with the family members who remained,” he says. “Part of our decision process was finding a platform with a lot of talent.”

The family members may eventually become part owners of Dalton Motors, Rodriguez says. “That is how our family became part of Dalton management.”

FasTrack service

The three dealerships share a service director and Dalton has already implemented its “FasTrack” service maintenance program, which guarantees 30-minute service with an appointment. The physical layout of the service departments helps keep that pledge.

“We have a model we brought to the U.S. from our headquarters,” Rodriguez says. “It was inspired by Henry Ford. We created a set up on the ramps that allows us to make sure we can get our customers in and out.”

Dalton is finding new ways and technologies to service its customers, he says.

“We need to create a different experience on the fixed ops side,” Rodriguez says. “Taking your car to service is like going to the dentist, you don’t want to, but you know you have to.”

Technology is integral to all operations at Dalton dealerships, he says. That extends to the dealerships’ appearance. All three facilities are being “revamped.”

The new look is “going to follow Dalton’s total ethos of being very high tech and offering a better experience to our customers,” Rodriguez says.

On the Hyundai transaction, Dalton again worked with the Scali Rasmussen law firm.

As a Mexican company acquiring franchises in the U.S., Dalton needed a law firm with a very specific skill set that included, for example, translating legal document into Spanish or English for the auto manufacturers’ review. Even the auto manufacturers were not familiar with some of the transaction aspects, says Rodriguez.

Dalton chose Scali Rasmussen based on the firm’s experience and knowledge of the local and international auto retail markets, he says

Dalton Motors already has an idea about where it would like to expand next, Rodriguez says, but for now it will concentrate on consolidating its U.S. operations and working with the teams here. It doesn’t want to bring people in from Mexico, he says.

But “we definitely want to expand to five or more stores down the road.”

This article was written for Getting to Go, a buy/sell newsletter from Scali Rasmussen.