Takayoshi Udagawa

THE founder of Western Australia’s second-biggest vehicle retailer, DVG Automotive Group, has stepped back from his chief executive role to be replaced by a director of its major shareholder, Japan-based IDOM Inc.

DVG’s managing director and CEO, Lou Divirgilio, said he would now focus on his role as chairman of the group, handing over the CEO role to Takayoshi Udagawa.

The change in the management structure was arranged when IDOM president Yusuke Hatori visited DVG’s Perth network in January (https://premium.goauto.com.au/dvg-plans-expansion/).

Mr Hatori then outlined plans for expansion across Australia and hinted at introducing new concepts – such as subscription ownership – from IDOM’s businesses in Japan.

Mr Udagawa has been involved with DVG since IDOM took control three years ago.

Mr Divirgilio said he felt the time was right to “hand over the keys” to a new CEO who will have the support of former AHG executive, Tony Salerno, who was recently appointed DVG’s chief operations officer. Other key executives are chief strategy officer Dan Kawai and chief financial officer Guido Berini.

Mr Divirgilio said when he met with IDOM president Hatori in January, they had agreed on the new leadership structure of DVG.

“I look forward to being a part of DVG’s exciting growth strategy over the coming years, to continue to work with and provide strong mentorship to the new leadership team and to continue to engage with many of DVG’s key stakeholders,” he said.

Lou Divirgilio

“It’s been a fantastic journey for me and my six brothers over the past 20 plus years, but the time is now right to hand over the keys and let Uda and his team take the business to the next level.

“Certainly, the last two years have been among the toughest that I’ve experienced in the car industry and we’ve had to make some difficult decisions to resize the business to fit the market.

“We’ve cut almost $6.5 million in costs from our annual operating expenses and have increased our revenues to the point that we’re now back trading profitably.”

Mr Hatori paid tribute to Mr Divirgilio, saying he could be extremely proud of the business that he and his brothers had created and grown.

“DVG is an excellent business with a fantastic reputation,” Mr Hatori said.

“We recognised that when we bought the majority shareholding in 2015. The business is what it is today because of the hard work and commitment shown by Lou, his brothers and the wonderful team at DVG.

“I thank Lou for his management and leadership of DVG and I know he will be with us every step of the way as we expand DVG’s operations across the east coast of Australia.”

DVG Automotive has 24 new- and used-car dealerships – including 19 new-car franchises – in 12 locations in WA and is majority-owned by Japanese automotive group IDOM Inc, previously known as Gulliver International.

IDOM bought a 67 per cent share in DVG in 2015 for $121 million and, in mid-2017, the Perth retailer was restructured to cope with a falling WA economy and tightening business margins.

DVG started in 1994 in a small used-car yard in Maddington, a south-east suburb of Perth, with the seven Divirgilio brothers led by elder brother Lou. The brothers amassed a string of used- and new-car franchises and, at one point, each brother was a dealer principal of a new-car dealership. Since the purchase by IDOM, only two brothers remain on the DVG board.

By Neil Dowling