Considering the economy, two of the county’s luxury dealers,Fletcher Jones Mercedes-Benz of Newport Beach and Newport Lexus,fared fairly well in the first quarter.
Both were slightly down in new car sales but up in used auto sales and service and parts. Both dealers had a bad January but picked up in February and March.
Garth Blumenthal, general manager for Fletcher Jones, said his dealership’s sales were largely down because of a shortage of new autos. The factory miscalculated the demand on the West Coast, he said.
“They misread the market,” Blumenthal said.
Mercedes officials looked at the California real estate market and thought the downturn would affect potential customers’ cash flow, he said.
Fletcher since has been able to get more cars redirected from the East Coast to the West, he said.
Allen Moznett, general manager at Newport Lexus, a skip away from Fletcher Jones, said the dealer’s parts and service, used auto sales and even its Tommy Bahama boutique are doing well.
“With the exception of new vehicle sales, our dealership is doing well,” he said.
The boutique has become a convenient stop for people picking up anniversary or birthday gifts.
He’s expecting sales to increase this year from 2007, its first full year in business.
For the Lexus buyer, the economy isn’t as bad as portrayed in the news, according to Moznett. Blumenthal agreed that the negative economic news can become a self-fulfilling prophecy.
“There are certainly some issues in the economy,” Blumenthal said.
Many people are buying into the negativity. Some are refraining from luxury purchases.
“They don’t want to appear frivolous,” he said.
But the high-end of the real estate market continues to do well, he said. Luxury buyers’ mortgages may have gone up but the well-heeled have a good cash flow, Blumenthal said.
“We’re still selling these high-end cars,” he said.
The tighter credit market isn’t having a dramatic effect on new auto leasing, which accounts for much of Fletcher Jones’ new auto sales, he said. Same for Newport Lexus, according to Moznett.
The banks are being more diligent about checking employment and assets, according to Blumenthal.
“The approval process is taking longer,” he said.
Still, there’s more than 90% approval on financing, he said.
If Fletcher can’t get them approved through its primary banks, the secondary market is willing to finance people with a lower credit rating, he said.
Blumenthal expects to do well for the next couple of months, which are typically good months for the dealership.
Big Push
Mercedes-Benz USA LLC is pushing its AMG brand,the automaker’s super high-end line of autos,through a few top-selling Mercedes dealers in California, Florida and New York, including Fletcher Jones. Mercedes will expand that number to about 30 this year.
Mercedes is expected to sell about 18,000 worldwide, according to Garth Blumenthal. Fletcher Jones will sell about 100 this year, he said. The cars are priced upward of $188,000.
AMG pilot dealers received sales training and a trip to Germany to witness the assembly of the autos at the AMG factory, Blumenthal said. The engines are hand assembled and the person who works on the engine signs it, he said. The factory is modern, high-tech looking and incredibly clean, he said.
The AMG buyer is a Mercedes enthusiast, he said. But he or she also might be a fan of other high performance autos, such as Ferrari or Lamborghini, Blumenthal said.
And the Award Goes to
American Honda Motor Co. gave DCH Tustin Acura the Precision Team Dealership of Distinction Award for 2007. The award for customer satisfaction is given to just a few dealers.
Retail Happenings
Strike bowling center is opening at The District at Tustin Legacy in June.
The bowling lanes are set to glow in the dark and each lane has a movie screen and a waiter. Strike has a chef, not a cook, who will serve up sushi, specialty burgers and other atypical bowling food.
See’s Candies has opened a store at the Irvine Spectrum Center.
Red Mango yogurt shop, a rival of Pinkberry, opened at the Crystal Cove Promenade in Newport Beach. This is the second Red Mango store. The other is in Irvine.
Combest General Store is moving from Bella Terra to a new location at Loehmann’s 5 Points Plaza in Huntington Beach.
After being there for 20 years, the store now seems misfit at Bella Terra. The mall, coming off an extensive makeover, is looking to bring in upscale local and national brands.
Store owners Jack and Cherie Combest hope that their long-time customers will follow them to Loehmann’s, where the Combests will open a 7,000-square-foot location by May. The new store is next to Trader Joe’s.
