THE Japanese owner of one of Perth’s biggest automotive retail groups has outlined plans for expansion across Australia and hinted at introducing new concepts – such as subscription ownership – that are already in place in his home market.

DVG Automotive, founded in 1994, has 19 new-car franchises in 12 locations in Western Australia and is now majority-owned by Japanese automotive group Gulliver International – now known as IDOM Inc.

In 2015 IDIOM took a 67 per cent share of DVG and in mid-2017, pressure from a contracting WA economy led DVG founder and elder of the seven Divirgilio brothers, Lou Divirgilio, to restructure the company.

This move, said IDOM president Yusuke Hatori, put the company on a strong footing that will now be used for expansion.

Mr Hatori, told GoAutoNews Premium in an exclusive interview in Perth that the restructuring – which involved improved efficiencies and reduced staff levels – showed him that DVG was the perfect springboard for national expansion.

“To expand, we first had to ensure we had a strong platform,” he said.

“DVG has done this over the past year under Lou (Divirgilio) and part of our expansion includes the appointment of (former AHG executive) Tony Salerno as chief operations officer.

“We are now almost there in terms of getting that platform finalised and once that happens our strategy is to grow and become number one in our automobile space in Australia.

“There is a need for acquisitions to be part of the national strategy and we are now looking at all the options now to meet that goal.”

Mr Hatori was aware that many Australian mid-sized, family-owned car dealerships had been taken over by larger groups – many part of private equity firms – but he believed there were still assets that would benefit DVG’s expansion.

He also said the focus for DVG would be on new-car franchises. IDOM is a substantial used-car retailer and wholesaler in Japan, with considerable auction and online expertise. It has 600 outlets in Japan and is currently building new stores at the rate of one a week.

It also has investments in New Zealand and the United States.

Mr Hatori said his company was “very interested” in the Australian market because of the country’s business stability and three decades of consistent growth, adding that he was particularly interested in Western Australia where he sees growth potential coming off some lean years.

“It’s a very interesting market and we’re excited to be a part of it. We are here for the long term,” he said.

“We are open to used and new-car businesses but the key to our future in Australia will be in new cars.

“The global strategy is more towards new cars. New Zealand was initially a test in terms of a used-car market and is an extension of that from Japan.

“Now we are definitely looking at new cars and the focus for our future will be in Australia – and to a lesser extent New Zealand and the US. That strategy is mainly because of the geographical location closer to Japan.”

Mr Hatori said growth will come from developing DVG. However he said “that doesn’t stop us looking at opportunities and developing other business plans and investments”.

New concepts that could be adopted in Australia include the growing trend to a shopping centre presence, with IDOM already involved in occupying floor space in Hunt stores in Japan.

But more attention will be put to new-car retailing and new concepts for selling used cars, as indicated by the appointment of former AHG executive and the manager of the yellow-box easyauto123 warehouse concept, chief operations officer Tony Salerno.

“One of the things that attracted me to DVG was the potential for growth,” Mr Salerno told GoAutoNews Premium.

“IDOM is very big on pricing transparency and looking after its customers so I see that as being a very big platform for us to tap into and use in Australia.

“Definitely it’s about using technology to give the best customer experience. IDOM is really working on future ways of buying vehicles, of sharing cars … they are already well down that track.”

One concept discussed with Mr Hatori was the car subscription model that leverages IDOM’s 40,000 cars in stock.

“We wanted to find a new way of customers to experience cars and this model is used where customers can either pick up a car at one of its stores or get it delivered at home,” he said.

The catchphrase is ‘change the car like you change your clothes’ and allows customers access to cars and to switch on and switch off at any time.

“If you pay (the equivalent of $A500 a month) you can change the car four times a year. It could be an SUV for winter and a convertible for summer.

“There are limitations for IDOM to build a new-car business in Japan and that is why we can use other concepts and so bring these to Australia.”

By Neil Dowling