The landscape of car dealerships on Maui is changing fast with the sale of the Subaru and Honda franchises by a longtime Maui family corporation to off-island businesses.
Servco Automotive announced the purchase of Island Subaru, and an official with Island Honda confirmed the sale of the Maui dealership to Lithia Motors, headquartered in Medford, Ore.
Both Maui dealerships were owned and operated by Kitagawa Motors, which was incorporated in 1959. The Servco sale was completed Saturday; final papers for the Lithia deal were signed over the weekend, Kitagawa and Servco officials said Monday.
Attempts to reach Lithia officials were unsuccessful Monday afternoon.
Last week, Jim Falk Automotive announced the return of the Chrysler and Jeep dealership that ironically had been operated by Kitagawa Motors for many years. The Maui company lost the dealership in 2009, when bankrupt Chrysler Corp. LLC closed nearly 800 of its 3,200 dealerships - including Island Dodge on Maui.
Island Subaru and Island Honda currently are located at 110 Hana Highway in Kahului on the same lot, with showrooms separated by a "firewall," according to a Kitagawa Motors official. Eventually, Subaru will have to leave the site, the official said.
Servco Automotive said in a statement that it was working in partnership with the Island Auto Center team to "mitigate any inconvenience to our customers."
Lithia will retain all of the current Island Honda employees and respect seniority; Servco has retained all but one current Subaru worker, a Kitagawa Motors official said.
"Many of our employees have been with us for 20 to over 40 years, and we did not come to the decision to sell our business easily or lightly," a statement from the Kitagawa family said Monday. "After 54 years in the business and watching the landscape of the automotive industry change dramatically over the last few years - we felt that selling the business to the right buyer now was the best way to preserve what we have worked so hard for and to insure our employees' long-term security and well-being."
That's what made Lithia an attractive buyer.
"When Lithia first met with us, we could only trust that they would do what they said they would in terms of taking care of our employees and making good on their agreements," the family statement said. "Up to now, they have done everything they said they would for our employees, and they have made good on what we set out to do together."
The Kitagawa family also realized that the small family-owned car dealership faced too many challenges on a modern Maui that includes a Wal-Mart, Costco and a Target under construction.
"Mom and pop dealerships, whether we like it or not, will soon be a thing of the past," the family said. "We realize that.
There are too many regulations, manufacturer and governmental requirements and compliance issues for little stores like ours to manage, while trying to compete with larger stores that have more inventory, more capital, more buying power, bigger advertising budgets, more resources to fund state-of-the-art equipment and technologies."
Walt DeBoer founded Lithia Motors in 1946 as a Chrysler-Plymouth-Dodge dealership in Ashland, Ore., the Lithia website said. In December 1996, Lithia Motors became a publicly traded company on the New York Stock Exchange. Shares of Lithia were trading at about $54 on Monday.
The company has more than 90 dealerships in the Pacific Northwest, the Southwest, the Rocky Mountain states and Alaska, the website said.
Kitagawa Motors opened Island Honda in 1975.
Servco Automotive, which owns dealerships throughout the state, is a subsidiary of 95-year-old Servco Pacific Inc., which includes distribution and retail dealerships for the Toyota, Lexus, Scion and Subaru brands. It also has a Chevrolet dealership.
The Maui Subaru will become the third Servco Subaru dealership in the state; the other two are on Oahu. Servco also owns Servco Lexus of Maui.
"When the opportunity presented itself to purchase the Subaru dealership on Maui, we didn't have to think twice," said Rick Ching, president of Servco Automotive. "We've had such great experiences with our two Subaru dealerships on Oahu and were immediately excited about the potential to bring the same high level of Servco customer service to Maui's current and future Subaru owners."
In 2013, the Maui Subaru dealership sold 207 vehicles. Kitagawa's opened the Subaru dealership in the late 1980s.
"2013 was an amazing year of growth for Subaru both nationally and across the state, and we're excited to bring Servco's commitment to great customer service to the Maui Subaru ohana," said Ching.
* Lee Imada can be reached at firstname.lastname@example.org.