Toresco Enterprises, Inc.

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Toresco Enterprises, Inc.

170 Route 22 East
Springfield, New Jersey 07081
U.S.A.
Telephone: (973) 467-2900
Toll Free: (800) 288-6526
Fax: (973) 467-1824
Web site: http://www.1800autoland.com

Private Company
Incorporated: 1984
Employees: 548
Sales: $507.1 million (2004)
NAIC: 441110 New Car Dealers

Based in Springfield, New Jersey, Toresco Enterprises, Inc., is a privately owned management company that oversees and manages the business interests of Donald M. Toresco. He is best known as the founder and owner of Autoland of New Jersey, one of the largest dealerships in the United States, selling new and used Chrysler, Dodge, Jeep, and Toyota vehicles. Located in Springfield on Route 22, some 20 miles west of the Lincoln Tunnel that connects New Jersey to Manhattan, Autoland also included a Ford dealership for more than 20 years, but under pressure from Toyota, Toresco relinquished the franchise in 2005. The company also owns several other New Jersey dealerships, including Crystal Automall in Greenbrook, New Jersey, which offers Toyota, Mazda, and Dodge vehicles; Lexus of Englewood; Toms River Lincoln Mercury Mazda; Ocean Chevrolet Jeep; and Dom's Kia Isuzu. All told, Toresco owns 13 separate dealer franchises. In addition to sales, his dealerships offer financing, fleet sales, and service (Autoland alone has more than 75 service bays). The company also holds Toresco's real estate and insurance interests.

BIRTH OF FOUNDER IN NEW JERSEY IN 1936

Donald Toresco was born in 1936 in Plainfield, New Jersey, where he was raised and graduated from high school. He grew up around the used car business. His father, Dominick Toresco, started Dom's Auto Sales in the mid-1940s, located in North Plainfield, New Jersey. Just out of high school in 1958, Toresco went to work for his father full-time, learning the business from all angles, including sales. After three years he enlisted in the U.S. Army, serving a two-year stint. Upon his discharge in 1964 he returned to selling cars for his father, but a year later struck out on his own, establishing his own used car dealership under the name Somerset Motors.

Just in his mid-20s, Toresco quickly grew Somerset Motors into a lucrative and highly respected lot. Just three years after launching the business, he was ready to try his hand at selling new cars. He gained a Dodge franchise and in 1968 established North Plainfield Dodge to sell both new and used vehicles. Again, the young man worked hard to build up the business at his dealership. By 1975 he succeeded in turning North Plainfield Dodge into one of the largest Dodge dealerships in the country.

Never at a loss for ambition, Toresco was setting his sights on a higher goal. He dreamed of building an "Auto Mall," a single location where customers could shop for various makes and models of vehicle in a friendly yet professional atmosphere. It was not unusual for car dealers to own a number of different franchises for U.S. and foreign automakers. General Motors (GM) had long ago mandated that its dealers could not compete with themselves by owning multiple GM franchises, in effect nudging them to take on franchises of other brands, a practice that became common in the industry. What was different about Toresco's approach was combining the franchises under a single, albeit large, roof. "I had a vision of an automobile dealership where customers could have a convenient one-stop experience similar to that of a department store," Toresco told Ward's Dealer Business. He added that he wanted "to have multiple manufacturers represented where a customer could shop based on driving needs, such as by segment—sport-utility, truck or family vehicle—and compare features and benefits of several manufacturers."

Toresco's first step in realizing his dream was the purchase of about 25 acres along Route 22 in Springfield, New Jersey. He moved his North Plainfield Dodge operation here in 1975 and rechristened it Dodgeland. While developing his auto mall concept, Toresco built Dodgeland into the largest Chrysler Dealership in the United States. It was also an innovative enterprise, the first dealership in the Northeast to install a computerized finance system. As a result, all paperwork, including bank contracts, could be stored electronically and printed as needed.

OPENING OF AUTOLAND IN 1985

In 1984 Donald Toresco formed Toresco Enterprises, Inc., to house his dealerships and other business interests, and he served as chief executive officer and chairman. A year later, in the spring of 1985, he opened Autoland of New Jersey, the culmination of more than a decade of planning. His auto mall allowed customers to compare and buy car and truck models from five dealers: Ford, Dodge, Chrysler-Plymouth, and Toyota. In 1994 Jeep-Eagle was added to the mix. Each of the franchises had its own showroom, and the bulk of the salespeople were trained to sell a specific brand, although some were cross-trained in order to sell several brands. Although there was just one central service facility, the service technicians, along with advisors and managers, were franchise-specific. Administrative functions—finance, accounting, and payroll—were consolidated, providing cost savings that helped Autoland to offer attractive prices on the vehicles it sold.

Although Autoland housed several showrooms, it had but one main entrance. Customers were greeted at the door to the mall and they were then asked what make or type of vehicle they were interested in. An appropriate salesperson was then assigned to them, but had the freedom to show customers other makes or types, or used vehicles, should they change their minds.

Just as Toresco believed it would, the auto mall proved to be a viable concept, and other car dealers would exploit the idea, although in general it succeeded more on the West Coast than the East. Autoland of New Jersey became one of the top retailers of new cars in the country, helped no doubt by its location, close to Manhattan and situated along the heavily traveled Route 22 corridor. According to the Newark Star-Ledger, Autoland became known for "moving the iron out the front end," meaning that it emphasized new car sales. Indeed, Toresco had by this time been named to the Dodge Chargers Club, an award for top-selling Chrysler dealers, several times. Autoland was also the first auto mall to be visited by the J.D. Power Super-Dealer Group in the spring of 1985. Toresco then added to his dealership empire on Route 22, opening Crystal Auto Mall in Greenbrook, New Jersey, to sell Mazdas and Toyotas, and later, Scions.

COMPANY PERSPECTIVES

Autoland is steeped in history, a pioneering force in the automobile industry. Yet as always we look towards the future and how we can further improve the automobile purchasing experience. Our number one priority is the satisfaction of our customers.

To keep the iron moving, however, Toresco and some of his dealerships engaged in sales tactics that the state of New Jersey determined to be violations of its Consumer Fraud Act. In February 1994, Toresco's Autoland, Crystal Auto Mall, and Ocean Chevrolet were charged by New Jersey's Division of Consumer Affairs with 36 violations. They included deceptive and misleading advertising, bait-and-switch sales tactics, and falsifying sales contracts to mislead investigators. A settlement was reach in May 1994, under the terms of which Toresco, Autoland, and Ocean Chevrolet agreed to pay $75,000 in penalties, $35,000 in costs, and $115,000 to a special fund for use in future Consumer Affairs auto investigations and to police the car sales industry in the state. In addition, Crystal Auto Mall and Autoland's in-house advertising unit, De Falco Advertising, each paid $27,000 in costs and penalties, and four Toresco managers paid a combined $16,500 for the falsification of a contract to cover up bait-and-switch conduct.

The 1990s was a period of fierce competition and consolidation among dealerships. In the 1960s when Toresco received his first Dodge dealership, New Jersey was home to 1,150 dealerships. By 1997 that number would be cut to 730 dealers. Publicly traded multibillion-dollar dealership chains, the likes of Republic Industries, AutoNation USA, and United Auto Group, were rolling up small dealerships around the country, many of which were family-owned, with the founders nearing retirement age and the second generation not interested in running the business. Accepting stock in these consolidators became a convenient exit strategy, a way to cash out and facilitate estate planning. Donald Toresco, nearing 60 years of age, was tempted to sell Autoland to United Auto in 1994. Even as Toresco was under contract to buy Springfield Nissan located across the highway from Autoland, he was negotiating with United Auto, although it was not certain if all the franchises would be involved. Nor was there any guarantee that the automakers affected would agree to the transfer of the franchises. Ford Motor Company, for one, had always preferred to award franchises to local entrepreneurs and avoided large holding companies. United Auto was a major player in New Jersey, the result of an earlier acquisition of Autoland's chief rival, Jersey City, DeFeo Auto Show. Although Toresco would have likely taken a significant role at United Auto, in the end he opted to remain independent. Unable to agree on a price, he ended talks with United Auto.

Toresco Enterprises continued to thrive in the second half of the 1990s, led by the ongoing success of Autoland. In 1998, according to Ward's Dealer Business, Autoland sold 10,572 new vehicles and 3,339 used vehicles, generating sales of $262.9 million. In addition, Toresco had five other New Jersey dealerships, so that Toresco Enterprises ranked 39th on the Ward's Dealer Business Top 100 Megadealer list published in April 1999, credited with selling a total of 28,048 new and used vehicles for revenues of more than $536 million.

Toresco's success was not free of controversy, however. In the late 1990s five of the dealerships were once again accused of defrauding customers through unfair and deceptive sales practices. They included Autoland, Crystal Auto Mall, Toms River Lincoln Mercury Mazda, Ocean Motors, and Dom's Second Chance Motors in Plainfield. The charges were filed after the New Jersey attorney general's office received 73 complaints against the Toresco operations involving bait-and-switch sales tactics, failure to refund deposits, and failure to honor negotiated deals. In October 2000 the Toresco dealerships settled the charges by agreeing to a payment of more than $200,000 as part of an Assurance of Voluntary Compliance agreement in which no wrongdoing was admitted. Of that amount, $125,000 went to the state and more than $76,000 was paid in restitution to consumers affected by the practices.

Despite its occasional brushes with the authorities, Toresco Enterprises also was known for its participation, and those of its employees, in community activities, including Toys for Tots, American Red Cross, American Cancer Society, Junior Achievement, Muscular Dystrophy Association, and Multiple Sclerosis Associations. Donald Toresco was personally involved in a number of charitable organizations, often serving on their boards of directors, including DARE (Drug Abuse Resistance Education), Deborah Hospital, Good News Home for Women (for victims of domestic abuse), Toys for Tots, and the Dodge Open Charity Classic Golf tournament. He also served as chairman of the ADA—Dealers for Diabetes Program.

KEY DATES

1965:: Donald Toresco establishes Somerset Motors.
1968:: Toresco acquires a Dodge franchise, forming North Plainfield Dodge.
1975:: Dodgeland opens in Springfield, New Jersey.
1984:: Toresco Enterprises is formed.
1985:: Autoland of New Jersey opens in Springfield.
1994:: The Jeep-Eagle franchise is acquired.
2005:: The Ford franchise is relinquished.

RELINQUISHING FORD DEALERSHIPS IN 2005

Involved with selling cars for nearly half a century, Donald Toresco had adapted to many changes during his career. He saw the fortunes of U.S. automakers decline and foreign automakers soar. In particular, in the early 2000s his Ford dealership at Autoland was struggling while his Toyota business was booming. In 2005 Toyota urged Toresco to provide it with more space at the auto mall, located as it was on a valuable piece of property close to Manhattan. Unable to expand beyond its plot of land, Autoland could no longer allocate space to a declining brand. In 1995 Autoland sold 2,755 new Ford vehicles, but by 2005 that number had dwindled to 989. Moreover, Toyota dealerships were significantly more profitable than Ford dealerships. Thus Toyota models encroached on Autoland territory that had belonged to Ford for 23 years. Ford was not happy with the change and presented Autoland with an ultimatum: Either restore the space, find a buyer for the franchise, or simply resign the franchise. Donald Toresco opted to give up the franchise. He had been around a long time, had sold used cars for his father in the 1950s, built up the most successful Dodge dealership in the country in the 1970s, pioneered the auto mall concept in the 1980s, and continued to prosper in the 1990s and the new century because he followed the lead of his customers. He sold them what they wanted to buy, whether that was a Toyota or a Ford. It appeared to be likely that he would sell thousands of more cars before his time was done.

Ed Dinger