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Valley Driven

What Lou Gonzales has been through the past 18 months he would not wish on anyone. His Saturn dealership in Palmdale was closed when General Motors discontinued the popular brand. His being awarded a Chevrolet dealership got caught up in arbitration and the court system. When he did receive word he could open a new dealership it was a day before the Oct. 30 closure of his Saturn franchise. To get through those challenges, Gonzales relied on what he had learned from 20-plus years in the retail side of the auto industry, and on his employees who stuck with him even in the face of an uncertain future. In early November, Gonzales opened Antelope Valley Chevrolet in the Lancaster Auto Mall, taking over the former space of a Toyota dealership that moved next door into a larger building. He immediately set to move to get the dealers at the mall working together and in February the dealers, in conjunction with the City of Lancaster, started a new program to offer the best price on a new vehicle and to exchange a used car within 10 days of the purchase if the buyer was not satisfied. A native of a small town in Northern California, Gonzales served in the U.S. Army following high school. He worked for two dealerships owned by the Robertson family, first in North Hollywood and then Palmdale. He then went in on a Buick Pontiac dealership before getting the Saturn franchise in 2001. Gonzales admits to being a salesman all of his life, a skill he attributes to growing up as an only child and having to convince other children to be his friend. The integrity and honesty that he learned in the military Gonzales applies to his business, which is why he has so many customers who have stayed with him over the years. “They know they don’t have to read the paperwork twice,” Gonzales said. “That is what develops loyalty is that trust.” Question: It has been a tough couple of years for the auto industry and individual auto dealers, how are things looking now in March 2011? Answer: We just finished basically 100 days in business. We opened on Nov. 10. I would say the first 30 days were a lot more difficult than I anticipated. The preceding 90 days have gotten a lot better. Things are coming together. I think a lot of that has to do with my team. Many of my employees have been with me for an extended period of time so the transition was easy. Q: What happened in that first 30 days that you didn’t anticipate? A: Just moving; the physical move. We had no new car inventory whatsoever. So we were strictly used cars. We didn’t have any new Chevys. I had acquired a couple of used 2010 Chevys so that I could have something in the showroom. Those first three weeks were tough on us. Fortunately some of my colleagues, Jimmy Johnson down toward San Diego was kind enough to sell 25 new Chevrolets and that helped bolster the inventory a little bit. Then in the second week of December we started receiving our shipment from General Motors. Q: Are you sorry to have seen the Saturn brand go away? A: I was very passionate about the Saturn brand. When I was first notified there could be issues with the brand that gave me great concern. I tried to champion that deal when Roger Penske made a run at acquiring the Saturn brand from General Motors. I felt I had a lot of close (intelligence); I was being updated regularly by a team of colleagues working with Roger on the East Coast. I thought the Saturn brand would be saved. It was kind of last minute that the deal fell apart and Roger was unable to come to terms with the people who were going to supply Saturn with cars. It was a sad day. I had a great run with Saturn for 11 years, tremendous success with the brand in the top 5 percent in sales volume in the U.S. We were proud of that. Title: President, Antelope Valley Chevrolet Background: Gonzales was born and raised in Northern California. He served in the U.S. Army after high school. not just cars: While Gonzales has spent his career at car dealerships he has other business interests as well. He is currently planning to build an Ace Hardware franchise in Acton. hobbies: Gonzales is an avid hunter. Q: During the downturn was there anything done differently, a change in sales philosophy or strategy? A: We saw significant change in the market, in the buyers. Many of the buyers, as the economy struggled and we went into the recession, many people rather than buy a new car were starting to service their car more frequently. We were seeing a little more traffic in our service department. Where we really had to make the adjustment was in the used car market. Many people were now looking for an additional car that they could commute in. We also saw there was a huge interest in lower priced cars; $6,995, $7,995. Anything under $10,000 we were selling almost as quickly as were putting them out there. Q: What are you seeing from buyers these days? A: I am seeing momentum pick up for the Chevrolet brand. One of the things that Chevrolet has done a real poor job of providing is great got-to-have small cars. I will tell you that has come to an end. The Chevy Cruze and the Chevy Malibu are just awesome. We are selling Chevy Cruzes on a 10-day inventory turn. I think the Cruze is going to give Civic and Corolla a serious run for their money, as Malibu has done already with Accord and Camry sales. Both of those cars are rated over 30 miles per gallon. I always thought that if they made a sharp, good looking small car there should be no reason we couldn’t sell them. They’ve hit a home run with the Cruze. Q: From your sales jobs at other dealerships, what did you take away from those experiences that have helped in running your own business? A: Robertson was focused on training. They spared no expense to send up for outside training from a third party, they brought third party trainers into the facility. They spared no expense when it came to training and trying to provide all the sales team members and managers with the proper education and tools that were required to be one of the top dealerships in North America. Holiday Buick Oldsmobile was my first opportunity to take the helm of the ship as general manager and vice president. And it was there that I really gained the confidence that I was and could be a successful businessman. A lot of people want to be business people, want to be business owners but they don’t have the courage to step up and do it. It took everything It took every nickel I had saved in my personal saving, everything in my 401(k). I invested everything in that Buick Oldsmobile dealership to have the opportunity to call myself a dealer. It was a gamble that paid off. Q: How did the price protection guarantee and used cars exchange program come about at the auto mall? A: It came about from me bringing together the dealers, convincing them that we needed to be one unit one team; extending an offer to our community of the Antelope Valley to put their shopping concerns at ease. We want them to know that no one can sell less than we can. A lot of the reason I think that people believe you can get a better deal down below is because of the megadealers. What I got the other dealers to do is make a commitment we would not be undersold. Q: Did you meet with the other dealers individually or in a group? A: It was as a group. We all got in a room within two weeks of me being here, and said guys I have a great idea here’s what I’d like to do. I said we ought to make sure we will give them price protection guarantee on a new vehicle and I’d love to do a 10-day trial exchange for the entire mall. They asked me a few things, and said that is what I have been doing for 10 years. I said, why don’t we do this as a complete unit. If we all sing out of the same book it will have an effect on all of our businesses. They all bought in right away. Q: There were no holdouts then? A: No. Nobody hemmed and hawed. We hired an advertising agency and had him do the marketing and do commercials. We did testimonials. That’s what our cable campaign is all about – real customers talking about the dealers at the Lancaster Auto Mall. Q: What was the city’s role in this? A: The city was very excited about the dealers uniting like this. So much so that they came in and agreed to participate in the cost of the program. There are five dealers. Instead of splitting an approximately $40,000 a month budget among the five of us, it is between six of us. The city has been a great ally and supporter of all the dealers in the auto mall. Q: Between the auto malls in Lancaster and Palmdale, all the major U.S. and foreign brands are being sold? A: One of the things we don’t have in our community that we used to have is we don’t have any high-line vehicles. The Antelope Valley used to have a Mercedes-Benz dealership and a BMW dealership. Neither one of those brands has been represented out here in many, many years. I believe it is only a matter of time that someone like an Acura or perhaps Infiniti or maybe even a Lexus may want to have representation in this market. We have 12 acres that is city owned that could be used for one mega-store or it could be partialed off into two 6 acre pieces. There is land across on the west side of the 14 Freeway that is privately owned that the developer has discussed possible auto mall expansion.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.
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