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Dealers’ growth downshifts



OC Auto Dealers Keep Gaining, Though Pace Slows

Orange County’s largest auto dealers saw their rate of growth slip last year but still posted a robust 13% gain in total sales to $2.7 billion.

That’s according to this week’s Business Journal list, which ranks the 20 largest auto dealers here by total sales, which includes cars, service, parts and other revenue sources.

But the sales growth rate was off by three percentage points from that posted for 1999 by the dealers on last year’s list. So far this year, dealers say they are seeing moderate growth on par with last year.

In 2000, sales of new cars took the biggest growth hit, coming in at an 8% gain to 60,835 vehicles, vs. a 16% gain in 1999. Used car sales did the best in comparison with the year-ago period: they were up 7% to 28,710 vehicles, down just a percentage point from 1999’s 8% growth rate.

For the most part, luxury car sales held their own in 2000 with Mercedes and BMW dealers posting total sales gains ranging from 17% to 45%. A couple of Toyota dealers posted flat total sales. The average price of a car sold here in 2000 went from $25,216 in 1999 to $26,374 last year.

“Even with the slowdown in the economy the housing market has still shown signs of growth, and high-line luxury (cars) are still showing signs of growth,” said Pat Bolter, general manager at No. 3 Mercedes-Benz of Laguna Niguel, which posted a 45% gain to $177.6 million in total sales, the biggest percentage increase on the list.

Newport Beach-based Fletcher Jones Motorcars held onto the No. 1 spot on the list for the fourth straight year. The dealership reported $343.1 million in total sales,an 18% increase from 1999. New car sales jumped 11% to 3,876 vehicles, while used-car sales increased 12% to 1,232 vehicles.

Fletcher Jones widened the gap between it and longtime rival No. 2 House of Imports in Buena Park, selling more cars overall.

House of Imports, a Mercedes-Benz dealer owned by Auto Nation Inc., grew 22% to $270.1 million in total sales. The dealership saw a 7% increase in new cars sales to 3,478 vehicles and a 6% jump in used-car sales to 1,179. It also increased the average sales price per car by $5,976.

Garth Blumenthal, Fletcher Jones general manager, said his dealership made some undisclosed internal changes last year involving its appointment system and sales calls, which “made a huge difference to our numbers.”

Blumenthal also said a focus on customer service is “allowing our business to grow.”

For the first half of this year, Fletcher Jones’ business is up 25%, Blumenthal said. The dealer is aiming for $400 million in 2001 sales, he said.

Newcomer Mercedes-Benz of Laguna Niguel bumped Toyota of Orange (No. 3 for at least two straight years) to the No. 4 slot.

In 1999, Mercedes-Benz of Laguna Niguel finished nestling into its new facility on 11 acres in Laguna Niguel. Bolter said sales growth came from good customer service and a 45% increase in new car sales to 2,496 vehicles. This year looks good so far, he said.

“We’re still growing,” Bolter said. “We’re up 28% (in overall sales) this year over 2000.”

Toyota of Orange, which is the top performer in Orange-based David Wilson Auto Group, saw a 1% dip in sales to $171 million.

That number reflected a slight decrease in overall car sales, with new car sales down 2% to 5,593 vehicles and used-car sales seeing a 3% drop to 3,960.

Still, David Wilson, who owns seven dealerships in Orange County, including Toyota of Orange, No. 10 Tustin Lexus and No. 13 Ford of Orange, said his properties are doing well, even so far this year at a time when national car sales are down 15%, he said.

“You kind of get spoiled. The last two or three years have been all time record years (for us),” he said. “If it’s off a little bit you say, ‘Gee how come things are slowing down?’ But if you’re doing 90% of what the all-time-record is every year, it’s still pretty good business.”

No. 10 Tustin Lexus held sales at $119.1 million and No. 13 Ford of Orange saw a 5% increase to $108.1 million. Both dealerships slipped two spots compared to last year’s list.

No. 5 Ken Grody Ford, No.4 on last year’s list, posted a 3% jump in sales to $145.8 million. New car sales dropped 1% to 4,617 vehicles, and used-car sales showed no growth at 2,800.

This year’s Business Journal list featured five new dealers, including No. 3 Mercedes-Benz of Laguna Niguel. The four others: No. 17 Joe MacPherson Toyota in Tustin; No. 18 Hardin Honda in Anaheim; No. 19 Tuttle-Click Tustin Dodge; and No. 20 Allen Oldsmobile Cadillac GMC Truck in Laguna Niguel.

Newcomer Hardin Honda was one of seven dealerships that showed double-digit growth, with sales jumping 37% to $78.2 million. Other movers: No. 9 Crevier BMW, up 27% to $134.9 million, and No. 12 Connell Chevrolet, up 24% to $108.6 million.

There also were 11 dealers that saw single-digit growth, one (Tustin Lexus) that reported less than a 1% sales increase, and one (Toyota of Orange) that saw a 1% drop.

Toyota of Orange was tops in the total number of cars sold in 2000 at 9,553. Still, Toyota of Orange easily beat out Ken Grody Ford, which sold the second highest number, 7,417 cars. n

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