Amid concerns over a credit crunch and slowing demand in the car industry, New Jersey-based DCH Auto Group plans to increase its tri-county presence with a long-awaited Lexus showroom in Santa Barbara.
According to a representative for DCH’s real estate holdings, construction is slated to start as soon as the permits from the city of Santa Barbara are received and contractors are lined up for the project. DCH Lexus of Santa Barbara could open as soon as the summer of 2009.
Bob Superneau of Stantec Consulting in Irvine — the company being commissioned to remodel the former Ford dealership — said construction on the property at 350 Hitchcock Way is scheduled for sometime in the first quarter of 2009, pushed back from a tentatively scheduled 2008 opening date.
Los Angeles developer Ralph Horowitz is the owner of the Hitchcock Way property being updated for the new dealership. His office did not return calls from the Business Times.
The space was purchased in July 2007 after Mel Clayton Ford vacated the site earlier in the year. Perry Automotive bought the Ford franchise and merged it with its operations down the street at 440 Hitchcock Way.
DCH operates several Ventura County auto franchises, including both Lexus and Honda showrooms in Oxnard and Toyota dealers in Oxnard and Simi Valley. A new Audi showroom with a dedicated sales and service staff is under construction in Oxnard and is scheduled to open in the spring.
Lexus’ U.S. sales have suffered along with the majority of other automakers’ in recent months. November’s sales were off nearly 35 percent, and year-to-date sales are running 14 percent behind 2007’s numbers. It is currently the best-selling luxury brand in the U.S., however, and is especially popular among consumers in regions such as southern California.
George Yazbek, general manager of DCH Lexus of Oxnard, said the decision to put a Lexus facility in Santa Barbara was based largely upon the need for a service facility in the area. There currently are no Lexus dealers that perform warranty repairs on Lexus vehicles between the Oxnard location and one in Monterey.
Yazbeck said he isn’t worried about a Santa Barbara store taking away business from its long-standing Oxnard showroom.
“Our growth in the Oxnard area over the past few years has better positioned us,” he said, saying the store would be able to weather with a drop in business on its sales and service sides.
He said the Oxnard dealer’s sales have dipped in the latter part of this year, but have seen an upswing in December, as Lexus Financial is still offering financing and leasing to customers. According to Yazbek, overall business for the dealership is still strong.
The Lexus dealership project was first presented to Santa Barbara’s Architectural Board of Review on Jan. 14, but was sent back for changes after noise concerns were raised and to make sure the proposed exterior lighting complied with city standards for dealerships.
The ABR approved the project on Aug. 25, after the plan was changed to address concerns about the exterior lighting.
Major plans for the building include bringing the exterior design more in line with that of existing Lexus dealerships. A new canopy in the front will also be added, as well as a general update of the facility. According to city plans, just over 1,000 square feet will be added to the building.
To address concerns over noise, Superneau says doors will be added to the service bays in the remodel.
Whether or not Santa Barbara can support a standalone Lexus dealer is a question the brand would like to know before looking to expand into other markets. The company has guidelines that do not allow Lexus to share floor space in the showroom with other brands.
According to a Lexus representative, there are no plans to expand into other cities in California, other than the planned Santa Barbara location and another dealer in Escondido.
Last year, the company was pursuing a dealership in San Luis Obispo, but according to Lexus, those plans are currently on hold.
The Toyota Motor Co. division plans to launch two models early next year, including a redesigned version of its own best-selling model, the RX350 car-based SUV, along with an updated hybrid version of it called the RX450h, which was unveiled at November’s Los Angeles Auto Show.
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