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Friday, Mar 29, 2024

Local Auto Dealers Surging Ahead Despite Trends

Even with overall cars sales slipping in California, two car dealerships in the San Fernando Valley bucked that trend enough to be named among the Valley’s fastest growing private companies. The family-owned Bob Smith BMW dealership in Calabasas ranked No. 32 on the San Fernando Valley Business Journal’s list with a 23 percent growth in revenues from 2004 to 2005. As of June 30, the dealership reported revenues of $93 million. Dealership President Tim Smith credited the upsurge in sales with moving to a new building along the 101 (Ventura) Freeway corridor from its long-time location in Canoga Park. “This area is really strong in the luxury car market,” Smith said. “Lexus and BMW are the two franchises doing the best.” Vista Lexus in Woodland Hills ranked No. 37 on the list with an 18 percent growth in revenues from 2004 to 2005. As of June 30, the dealership reported revenues of $33.5 million. Vista Lexus President Tori Shuken credits the dealership’s growth to its being family owned and employing long-time salespeople. Loyalty in its customers leads to repeat business and referrals to the dealership, Shuken said, while retaining salespeople leads to comfort for a potential buyer. “How nice for a three, four, five, or six time customer to walk in after 16 years and see that same familiar salesperson every time,” Shuken said. “It happens all the time here.” Overall new light vehicle registrations in the state dropped in the first half of 2006 when compared with the first six months in 2005, according to statistics from the California Motor Car Dealers Association. The 5.5 percent drop in California was sharper than the national decrease of 2.3 percent. During the second quarter of 2006 Toyota and Honda were the top two sellers with a combined 36 percent of the state’s market share, the association reported. Big Three decline The Big Three domestic automakers, by comparison ranked in single digits for sales and had decreases in sales compared with the first quarter. BMW had a 3.7 percent market share and Lexus a 3.6 percent market share for the second quarter, according to the CMCDA’s numbers. One reason for success for BMW dealers is the aggressive development of its models, with its 3, 6 and 7 series of cars all doing well, Smith said. “As long as they continue to provide fresh and exciting models for us, we will continue to grow,” Smith said. Lexus, the luxury auto division of Toyota, puts itself on the cutting edge with design and technology, Shuken said. “You don’t like to say it sells itself,” Shuken said of the dealership’s inventory. “We like to think we work harder than that but it does sell itself.” The Asian and European lines are extremely dominant in the California market and there is no reason to believe those lines won’t continue to increase market share, said Mark Rikess, president of The Rikess Group, a Burbank-based consulting firm for the auto industry. The strong brand identity the foreign car companies created does not bode well for the domestic auto market. “Even if domestic vehicles were on par from a quality standpoint with Japanese-made vehicles it’s really hard to convince the public of that in California as opposed to other parts of the country,” Rikess said. With the disposable income of Southern California residents, it is no surprise that a BMW and Lexus dealers would do well. But with the type of car one drives being a reflection of who you are, the dealerships are selling prestige as much as high quality and enjoyable cars, Rikess said. “There is an association that if I drive a BMW or drive a Lexus that sends a message that I am successful,” Rikess said.

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