Canadian partners buy first dealership, in the U.S.

After lengthy careers as dealership managers, two Canadian partners have acquired their first store: Coachella Valley Volkswagen in Southern California.

PATH Auto Group — a partnership formed this year by Phil Alalouf and Todd Hewitt — purchased the store in Indio on April 19 from the growing Nouri/Shaver Automotive Group.

The new owners kept the name of the store, which sold 244 new vehicles and 480 used vehicles last year.

The duo follow several other Canadians who have bought dealerships in the U.S. in the past several years.

Hewitt — an experienced used-car manager — is focusing on the store's sales department, while Alalouf oversees fixed operations, accounting and finance.

The partners each have three decades of automotive managerial experience. They met 25 years ago at what was then Cowell Auto Group near Vancouver, British Columbia, then later worked for Canada's Foundation Automotive Corp. in the U.S.

After they decided last year to launch their own business, Alalouf and Hewitt sold their Vancouver homes to raise cash. They said they chose a U.S. location because Canadian dealerships were either too expensive or too remote.

If all goes well with Coachella Valley Volkswagen, Alalouf said they may expand.

"We're not going to buy 35 stores and become a monster group, but we'd like to have three to five stores in the next five years," he said. "We'll keep it local with stores within an hour's drive and just grow from there."

The transaction made sense for both buyer and seller, said Jason Stopnitzky, co-founder of Irvine, Calif., buy-sell firm Performance Brokerage Services, which brokered the deal.

PATH Auto bought an affordable store, while Nouri/Shaver exited a dealership that was a bit small by its standards, Stopnitzky said.

The Nouri/Shaver group has made several acquisitions in the past year, including Cal Worthington's iconic Ford dealership in Long Beach, Calif., in February.

Nouri/Shaver is "in hyper growth mode," Stopnitzky said. Coachella Valley Volkswagen "is a small store compared to ... other acquisitions. This one store didn't fit."