Oxnard rolls out Mercedes
While the rest of the region’s car industry is hitting the skids, Oxnard is moving upscale.
Along the city’s Auto Center Drive, stores selling new luxury models are taking root — perhaps anticipating a bigger recovery for the ailing industry in the coming months. The largest tri-county city’s gains stand in sharp contrast to the rest of the region, where a painful sales environment is forcing closures and consolidations as dealers are looking for ways to get more sales from a shrinking market.
In Oxnard, AutoNation’s Mercedes-Benz of Oxnard and Smart Center, currently under construction, will add more prestige to the city. The new stores are following close on the heels of DCH Auto Group’s Audi store, which opened April 25.
George Yazbek of DCH Oxnard said the new dealer is attracting new Audi customers from across the region.
“We’re getting customers from the Ventura area as well as the Santa Barbara area,” he said, “for not only service but sales too.” The facility has about 20 employees and is the latest member of the Oxnard DCH group joining Lexus, Toyota and Honda.
Smart USA communications director Ken Kettenbeil said he couldn’t provide details on the Oxnard dealer until the franchise agreements were finalized in the coming week. AutoNation and Mercedes-Benz representatives did not return calls from the Business Times but construction on the Auto Center Drive building is nearing completion.
Other dealers in the Oxnard Auto Center believe that the brand new showrooms — combined with neighboring retail centers anchored by Costco and other stores — will draw more casual shoppers who may be convinced to stop and take advantage of big incentives.
Leo Bunnin remains confident that his General Motors stores in Oxnard, Ventura and Simi Valley will stay afloat after the automaker’s June 1 Chapter 11 filing.
“Part of our success is that we’ve been a volume GM dealer on the new car side, and offer a large inventory of all cars on the used side,” he said.
But while his stores were spared the GM dealer ax, Bunnin wasn’t completely unscathed.
Bunnin is the largest volume Pontiac dealer in Southern California. He says he hates to lose Pontiac, which will be eliminated after 2010, but anticipates GM adding Buick GMC and Cadillac models, all of which he sells.
And he welcomed the addition of luxury brands to the Oxnard center.
“When you add brands like Mercedes and Audi that are upscale, it helps the mall,” Bunnin said.
Bunnin also operates Saturn of Ventura. That dealership is now the last of its kind in the Tri-Counties after Saturn of Santa Maria closed in April. Bunnin says he’s picked up some sales and service business since then.
“From what I hear, there are numerous qualified potential buyers and brands,” he said.
Bunnin says he has no plans to merge the Ventura dealer into his Oxnard operations. Saturn, currently for sale by the bankrupt auto giant, will be out of the GM fold by year’s end. “Saturn will stay in Ventura because of its freeway visibility,” he said.
Filling the holes
The new dealerships will help Oxnard’s auto center reach a milestone — it will have no vacancies after the completion of the Mercedes dealer at 1511 Auto Center Drive.
But across the region, county auto complexes are looking at acres of emptiness.
The Ventura Auto Center has two vacant properties from former Volvo and Kia dealers. In Thousand Oaks, Courtesy Chevrolet’s closure in February left a Thousand Oaks Boulevard site deserted. In Santa Barbara and San Luis Obispo counties, dealers are looking to put more brands on less real estate in order to improve their bottom line.
Mike Sell operated three GM dealers at the start of 2009, offering six of the eight brands then offered by the company in North America. But at the end of March, Sell merged his two SLO locations. Cuesta Cadillac Saab moved out of its longtime Monterey Street building and in with Rancho Grande Motors in the city’s auto center off of Los Osos Valley Road.
“With the economy headed downwards and GM’s troubles, we planned for this a few years ago,” Sell said. Rancho Grande Motors now holds domestic brands in one showroom and imports in another, connected by one service department.
“Now we have several franchises under one roof,” he said. “The customer really appreciates having a lot of choices.”
Sell’s customers will have a little less choice at the end of next year when Pontiac exits, and while it’s a bit sad for him to see the cars go, sales have dropped sharply. “In good times we were selling a dozen Pontiacs a month,” he said. “Now we’re selling two or three.”
Sell said customers are increasingly looking towards his import brands instead of GM products. “Most of the traffic we get is on the Subarus and Hyundais,” he said.
Large automakers filing for bankruptcy protection is uncharted territory for auto dealers. And that unpredictability has put plans for expansion at Shaver Automotive in Thousand Oaks on pause.
Shaver Vice President Chris Shaver didn’t want to speculate on what was going to happen with plans to add Chrysler and Dodge sales to his Jeep franchise, but remains committed to Jeep and the new Chrysler ownership.
But in the interim, he’s been able to pick up some service business from Chrysler owners after Rusnak Auto Group turned Westoaks Chrysler Dodge into a used car outlet.
Change has been what dealer Jim Crook has been able to count on. He’s the head of Santa Barbara Auto Gallery, which is responsible for Chrysler Dodge and Jeep in Santa Barbara. He added a Hyundai franchise earlier this year and hopes to start selling new Subaru cars by summer’s end.
This also coincides with plans to move from his Hollister Avenue location across from the Santa Barbara Airport to a new lot on Hitchcock Way next to Santa Barbara’s other dealerships in a bid to improve the visibility of his business.
New car smell
Shaver and Crook are also eagerly awaiting Fiat-based Chrysler products. Automotive News reported June 1 that the Italian firm, with a 20 percent stake in Chrysler, would sell the Fiat 500, a Mini Cooper-sized hatchback, at Chrysler dealers by the end of 2010.
New American-made models using Fiat’s engineering are set to appear shortly thereafter.
But unless Chrysler’s successful emergence from Chapter 11 brings with it a renewed interest in its current products, the wait for Fiat intervention will be a long one, and dealers know they can’t survive on used car sales and service alone.
“We focus on everything: parts and service, pre-owned and new car sales,” Crook said. “You can’t have one without the other.”
Three tri-county dealers are losing their Jeep franchise after Chrysler announced it would terminate 789 U.S. dealers. Kirby Jeep Suzuki in Ventura, Perry Ford Lincoln-Mercury Jeep in SLO, and Ted Miles Jeep in Atascadero were informed they would not be able to sell Jeep products after June 9.