Dealership Acquisitions Fuel McLarty Automotive Group

Mark McLarty, chairman and founder of McLarty Automotive Group, has focused his energies building U.S. operations during the past three years.
Mark McLarty, chairman and founder of McLarty Automotive Group, has focused his energies building U.S. operations during the past three years. (Karen E. Segrave)
Mark McLarty, chairman and founder of McLarty Automotive Group, has focused his energies building U.S. operations during the past three years.
Mark McLarty, chairman and founder of McLarty Automotive Group, has focused his energies building U.S. operations during the past three years. (Karen E. Segrave)

Three years after returning home to Arkansas, Mark McLarty has assembled one of the largest auto dealership groups in the nation.

In America, Little Rock’s McLarty Automotive Group rolls with 18 dealerships and four collision centers in central Arkansas and central Missouri. Automotive News ranked his venture No. 24 among American automotive groups.

McLarty Automotive Group also debuts on the Arkansas Business list of the state’s 75 largest private companies at No. 4, with 2016 revenue of $1.76 billion — the largest first-time entry in the 30-year history of the list. The group, which includes operations overseas, would have ranked No. 5 last year based on its 2015 revenue of $1.42 billion.

U.S. operations were launched after McLarty spent 15 years abroad building automotive ventures in Brazil, China and Mexico. Total staff: 2,311.

“The decision to move back to Little Rock was an important one for me personally,” the 45-year-old executive said. “There is a strong emotional bond with the state.”

His family roots in the business go back four generations to Hope Auto Co., a Ford dealership in Hempstead County that opened in 1921. Mark McLarty grew up around the business, further developed over the years by his grandfather, Frank, and famed father, Thomas “Mack” McLarty, onetime White House chief of staff for President Bill Clinton.

Past domestic and international auto deals included his father and brother, Franklin, as participants with dealerships sometimes bearing the McLarty name. But this time, it’s Mark McLarty’s baby. He is the McLarty in McLarty Automotive Group.

“Taking the first steps are the most challenging, getting the first transactions done and forming a team from scratch,” said Mark McLarty, chairman and founder of MAG.

The group began with the 2014 purchase of Bale Honda in Little Rock, renamed McLarty Honda. In 2015, the acquisition trail led to Columbia, Missouri, with McLarty striking deals for Frank Fletcher Honda (now Columbia Honda) and the Joe Machens family of dealerships, the largest in the Show Me State.

In December 2015, McLarty Automotive Group announced the purchase of North Point Nissan, North Little Rock Nissan, North Point Mazda and North Point Volkswagen from the publicly traded Asbury Automotive Group of Atlanta. The dealerships were renamed McLarty Nissan of Little Rock, McLarty Nissan of North Little Rock, McLarty Mazda and McLarty Volkswagen.

MAG purchased the balance of Asbury’s central Arkansas dealerships last year. BMW of Little Rock retained its name, while Volvo of Little Rock became McLarty Volvo Car of Little Rock. North Point Ford/Lincoln and North Point Toyota/Scion gave way to Mark McLarty Ford Lincoln and Mark McLarty Toyota.

Some of those Asbury dealerships were once owned by his family.

“That was a big milestone, and brought things around full circle,” McLarty said. “That has been special to reconnect with the businesses and have them locally owned once again.”

The family’s sale of its dealerships to Asbury led him on a globe-trotting adventure.

“Back in 1997, that left me with a real fork in the road,” McLarty said. “No family business to continue working with. Go into a different business or different industry?

“That’s where the impetus was for me to take my experience and move to Brazil and develop a new business with new partners.”

In 1999, he established Caltabiano McLarty Participacoes and developed it into the leading Brazilian dealer for Mercedes, BMW, MINI, Ducati, Jaguar, Land Rover, Toyota, Chrysler, Dodge, Jeep and Ram. McLarty is chairman and controlling shareholder of CMP.

In 2005, he was off to Asia where he formed China Grand Auto with local Chinese partner Guanghui and TPG Capital of San Francisco.

As co-founder and CEO, McLarty built the business by acquiring and restructuring former state-owned dealership groups in central and western China. Today, CGA is the largest auto retailer in the world with more than $20 billion in sales and 650 dealerships.

In 2009, he led the acquisition of the largest BMW dealership group in China from Citigroup. As chairman and CEO of NCGA Holdings, McLarty grew the business from five BMW dealerships into more than 15 spread across northern China and also built new dealerships representing Porsche, Volvo, Jaguar, Land Rover and MINI.

NCGA Holdings merged in 2012 with Shanghai-based dealer group Baoxin Auto, which was subsequently acquired by China Grand Auto. McLarty remains a shareholder in the combined company.

In 2010, he and his partners acquired GDV Imports, the exclusive Mexican distributor for Jaguar Land Rover. McLarty continues as chairman and controlling shareholder of GDV, where Mexico has become the second-largest market in Latin America for Jaguar and Land Rover.

“It’s a capital-intensive industry,” McLarty said. “Personally, I’ve always had financial partners to provide a long-term capital base for growth.

“You have to seek outside capital. That provides a financial buffer against downturns in the economy that can put a debt squeeze on a business if it’s too leveraged. Even big dealership groups can be hit.”

His financial partners in McLarty Automotive Group include an august trio of family fortunes represented by George Soros, a Wall Street legend and founder of Soros Fund Management; the family of Stephen LaFrance Sr., founder of the USA Drug chain of pharmacies; and Johnelle Hunt, chairman of Hunt Ventures and co-founder of J.B. Hunt Transport Services Inc.

Johnelle Hunt remembers first doing business with Mark’s grandfather 50 years ago. She and her late husband, Johnny, needed more trucks to haul rice hulls in support of the poultry litter business they were building in Stuttgart during the 1960s.

Mark’s father, Mack, helped put together lease agreements that supported the Hunts’ growing transportation ventures.

“Our friendship with their family goes a long way back,” Johnelle Hunt said. “They are just the most honest people in the world. I was so honored they would ask us to be part of any venture they were involved with. I knew they would look out for my interests and the interests of my family.”

Buying & Building

Mark McLarty doesn’t remember the exact day he bought a one-way ticket from China bound for Little Rock, but that event marked the unofficial launch of McLarty Automotive Group.

“No one was at the airport with a red ribbon or anything, but that was in my mind when it started,” he said.

Already fluent in Spanish, McLarty returned to America fairly proficient in two additional foreign languages, although he didn’t know much Portuguese when he moved to Brazil and zero Mandarin Chinese.

His work building automotive groups in Brazil and China helped piece together a template for McLarty Automotive Group.

“Both those experiences really shaped how we structured the company, as well as my family’s experience in the business,” McLarty said. “We want to take the best elements of a family-type dealership — local ownership, entrepreneurial spirit and personal service — and merge that with what big groups can do with a strong internet presence.

“That was the initial thinking in forming a business model. That’s not to say it’s unique. Others have done it. We have determined it’s sustainable. We want to embrace technology and be a meritocracy.”

He intends to expand MAG’s two-state footprint regionally through more acquisitions and new openings in the Midsouth and Midwest. The company is working to complete a new Nissan dealership in Benton.