Quiet auto industry giant leads Sioux Falls Ford to new store

By Jodi Schwan

It’s one of those things nobody buying a vehicle at Sioux Falls Ford Lincoln probably stops to consider:

There is no other name on the business.

Auto dealerships industrywide typically brand themselves with the owner’s name.

But not at Sioux Falls Ford. And that’s on purpose.

“We’re trying to build a brand at every location without a name on it,” said Randy Nehring, whose name would be the obvious one to attach to the dealership that recently opened its new location.

“What builds the brand is every individual customer experience you create,” he continued. “You don’t need to advertise a brand. We just need to make sure people know where we’re at and what we sell. Sioux Falls Ford Lincoln is a pretty good indicator. We’re pretty simple people.”

The irony is that Nehring is actually a very big name in his industry.

Bigger than many in Sioux Falls likely realize.

And the company he leads might take a simple approach in its business philosophy, but that has led to an impressive national presence.

Randy Nehring

“I think it’s fair to say I stay under the radar,” said Nehring, who calls Sioux Falls home but only gets to spend a handful of days here each month.

He travels extensively as president of the North Dakota-based Rydell Co., which counts 78 dealerships in 17 states from Los Angeles to Illinois as part of what Nehring calls a family.

“This is our family,” he said. “Whether we have ownership or not, we count them.”

The unique arrangement – Nehring doesn’t know of another like it in his industry – is the result of an intentional focus on building new business owners. Once a dealership is acquired, Rydell typically sells it to a hand-selected local owner in less than seven years.

“Our idea is to create the opportunities for people,” Nehring said. “We have a strong belief that the retail auto business still works better as a Main Street business and not a Wall Street business.”

Building the business

Leonard Rydell dreamed of selling cars.

He gathered and sold enough scrap metal in North Dakota during World War II to rent a Chevrolet dealership in Montgomery, Minn., in 1946. Eight years later, impressed by his performance, Chevy asked him to become the dealer in Grand Forks, N.D.

Leonard Rydell owned Rydell Chevrolet in Grand Forks, N.D., beginning in 1954.

That’s where he would go on to meet Nehring, who grew up in northwest North Dakota and spent 18 years as a CPA in Grand Forks. While his father had sold cars and farm equipment at a small dealership, Nehring hadn’t planned to go into the business until his friend and accounting client, Rydell, recruited him.

“He said, ‘Let’s start a company.’ He wanted to help other people start car stores,” Nehring said. “And I left the accounting practice and jumped on board.”

Together with Rydell’s son, Wes, and dealer-owners, Ivan Gandrud and Duane Gilleland, they formed Rydell. Nehring became president, a title he still has today.

Rydell’s approach to selling cars was built on volume. The company sold for lower prices that many dealers but sold a lot of vehicles. Enough so that many dealerships became top performers in their region or for their line.

With Leonard Rydell’s guidance, they began building a culture around so-called Leonardisms. Things he would say, such as:

“Never take advantage of a customer, even if you can.”

“Why would you spend all that money advertising if you’re just going to disappoint guests when they come to your store?”

“If times were always good, you would all die under the weight of your own fat.”

Most times for Rydell dealerships were good, however.

By 1995, it was Nehring’s turn to become a dealer-owner, when Rydell acquired Ben-Hur Ford in Sioux Falls.

“They were financially successful,” he said. “But in any store we go into, we have an operating plan built around our vision, our values and our philosophy. And it’s simple: To be so effective we are able to be helpful to others.”

The Rydell way

When Rydell Co. was formed, the founders had seen “a lot of empty promises given in this business to people with high potential,” Nehring said.

A dealership owner might promise a top-performing employee the chance to eventually become an owner, “but ‘eventually’ never came, and all of a sudden they’re out the door and the next guy was in with the same empty promise.”

There aren’t many new dealerships opening nationwide, Nehring added. Most dealers grow through acquisition. And when Rydell acquires a store, there’s always a plan for who is going to run it and eventually own it.

The transition typically takes five to seven years.

“That’s what makes it unique,” Nehring said. “We are the tracks we leave. And fortunately we’ve been able to leave some pretty considerable tracks. People can look at us, and they don’t have to ask what we intend to do.”

Rick Mohr has experienced it. He started at Ben-Hur Ford in 1988 and was a manager when Nehring and Rydell took over.

“Everything was upfront,” Mohr remembered. “Low margin, high volume, which flies in the face of low volume, high margin. It was a lot of fun.”

Then one day, Nehring asked him to lunch and told him Rydell had bought a Ford store in Eau Claire, Wis. He wanted Mohr to run it.

“I about spit my burger out,” he remembers. “It was crazy. My wife started crying with joy.”

Nehring had him drive his family to Wisconsin that day. There was wine waiting at the hotel and cookies for his kids. They closed the deal in 2004, and by 2012 Mohr had bought out the company to become the owner.

“It was a far-fetched dream. I didn’t think it was going to happen,” he said, adding that Nehring is “probably the smartest guy I’ve ever met and probably ever will meet. He’s probably borderline brilliant. You’ll know where you sit when you sit down with him. My wife and I owe him everything. We wouldn’t be in Eau Claire owning a dealership if it weren’t for him.”

Rydell itself typically owns around 20 dealerships at any given time. The rest of the 78 have been transitioned to dealer-owners, but the group still works together through a dealer improvement program. They share operational data, financials and best practices. A dealer meeting can draw several hundred owners and managers.

“You can go through our dealer improvement process book and see who has the best service absorption or who’s doing good in parts or sales and call them and they’ll tell you anything you want to know,” Mohr said. “It’s invaluable. It’s crazy. It makes our job not easy, but easier.”

Sioux Falls has an additional connection to Rydell through co-owner Loren Holub, who moved to the city 12 years ago to work with the company and continues to co-own a dealership in Nebraska.

Rydell group dealerships share a common philosophy, value and vision, Nehring said.

“What’s really fun is to see those people that have had the opportunity to get their own dealership continue to support the family and build people within their own organization,” he said. “That’s our farm system. We’ll never outstrip our talent. We’ve been blessed we have enough capital to buy stores and there are plenty for sale. But we will only grow to the extent we have talent to support the growth. It’s always about the people.”

Transition planning

Nehring’s focus has turned in recent years to his own succession plan. In addition to Sioux Falls Ford, he owns Luxury Auto Mall in Sioux Falls.

Ed Bloom

His son-in-law Ed Bloom runs the Ford location His other son-in-law, Mike Chaplin, runs Luxury Auto Mall. The brothers-in-law are planning to become equal partners in both locations.

“He’s treating Mike and me like any other buyout,” said Bloom, who went to West Point and served almost seven years in the Army and moved to Sioux Falls in 2008.

Bloom runs daily operations at the new location near 26th Street and Marion Road, which he said has exceeded expectations. It’s the largest dealership in the Rydell group.

“We definitely had outgrown our location,” Bloom said. “And we were landlocked, and it’s not easy to take test drives.”

The new Sioux Falls Ford Lincoln dealership near 26th and Marion.

The new location can accommodate the dealership’s full inventory – about 1,000 vehicles – and offers expanded room for servicing, including for commercial customers. The lounge is a high-tech area of screens and tablets offering entertainment while customers wait, as well as the ability to check in on their vehicles through an iPad and cameras posted around the servicing area.

“It’s all about transparency,” Bloom said.

The dealership also is built flexibly with the uncertain future of the auto industry in mind.

“There’s a lot of noise about the future, autonomous driving and the types of vehicles that will be around. We stay very well-networked around the country and are closely tied to Ford on front-end design and strategic thinking,” Nehring said. “There will be a lot of challenges in the business. But at least in Sioux Falls, S.D., people still feel having their own vehicle is a freedom.”

Customers such as John Prince III, who bought his first Windstar van at Sioux Falls Ford in 1999, don’t foresee going anywhere else. Prince estimates he has bought more than two dozen vehicles at the dealership.

“It’s their sales and service and the overall communication between the sales department and us,” he said. “The experience was just so simple. And pricewise, the first few years we did comparative shopping, and they’ve always been either under or right where they need to be to remain competitive. The location is going to be fantastic for them. They are a ‘10’ and consistently trying to exceed that.”

As a business leader, Nehring also keeps a relatively low profile locally, but those who know him well said he quietly gives generously.

“He’s very humble, caring, giving and generous,” said Tom Walsh, CEO of GreatLIFE Golf & Fitness and one of Nehring’s close friends. “When his people have a need or are hurting, he’s the first one there, and he makes sure they are taken care of. You can make a lot of money in the car business, but you don’t have the kind of leadership and commitment to people that Randy’s organization has.”

Nehring is passionate about helping children’s and veterans’ causes, Walsh added.

“He is a class act. He’s all about family, faith and relationships. He’s a quiet gentleman,” Walsh said. “He will bend over backwards to help people, but he never wants his name out there. And he’s made a lot of people millionaires and business owners. He knows numbers, and he puts together win-win deals for his people, and that’s why he has such loyalty among all the people that work with him.”

And while he might be transitioning the Sioux Falls dealerships to family, Nehring said he can’t envision retiring from Rydell. He recently committed to 10 more years in the business.

He and Bloom both smile when asked about future opportunities in Sioux Falls, only saying that while they are focused on the new Ford store, they’re not done in the city yet.

“I love Sioux Falls,” Nehring said. “It’s a Mecca as far as I’m concerned. And I see a lot of communities. I tell a lot of my friends I hope they appreciate what they have here. This is unique in the attitude toward taking care of people and being philanthropic. This is by far the most generous community I see anywhere. I think that’s such a good thing.”

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Quiet auto industry giant leads Sioux Falls Ford to new store

There’s a bigger story behind the new Sioux Falls Ford Lincoln dealership — one that sets it apart from its industry.

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