Pacific Coast Highway in Newport Beach is looking more like the Bloomingdale’s of luxury auto brands nowadays, and Karma Automotive LLC naturally had to be part of a stretch that’s like no other.
The Irvine-based automaker sped into a 2,000-square-foot space next-door to Bill Story’s Maserati and Ferrari dealerships and just down the street from Pagani, Porsche, Bentley and BMW showrooms.
“We got lucky,” said Chief Revenue Officer Jim Taylor. “You can’t really be in a better neighborhood than surrounded by Ferraris.”
The showroom is “small, but it’s all we need—we only have one car,” he said, referring to the Revero, a $130,000 hybrid sports car Karma launched last year.
It also catches plenty of eyeballs, be it commuters, tourists or locals.
“Tens of thousands of cars go by there a day,” Taylor pointed out, “so while we’re in the phase of still introducing ourselves and trying to create awareness, just the physical presence and people being able to see the Karma sign and see our cars, it’s instantaneous advertising.”
The automaker moved in last week, and a soft opening was scheduled for today. A renovation to achieve the “Karma look”—inspired by California and developed by the Gensler team in Newport Beach—will soon follow. The same will be expected of 11 dealers now selling the vehicle as their volumes increase. Revero deliveries began in May from its factory in Moreno Valley, which churns out about a car a day.
“Our focus is to get it right and 100% customer satisfaction,” President and Chief Operating Officer Dennis Dougherty said in an earlier interview. “Our production will be increasing over the course of this year.”
The Newport Beach location is a Tesla-type showroom where customers can purchase a car, even though it’s not a franchised dealership.
“When we evaluated our original dealership strategy, we wanted to go in both directions,” Taylor said. “There’s a lot of states in the U.S. who legally objected to the Tesla approach and prevented them from running their play, and they’re going through extended legal options to try to, like, almost force themselves into those states. That’s a lot of work. So we thought, OK, for the states that are friendly to this approach, we could run our own stores, and in the states that aren’t, we’ll use a few franchised dealers.
“Also, from a management standpoint, we are a startup, so having our own dealership right here is easier to manage than if the dealership was in New York City or something.”
Karma also has a franchised dealer in the state, Rusnak Auto Group in Pasadena, and plans to add more in coming years for a total of 30 to 40 in major U.S. cities.
“We’re at 12 right now, and it’s on purpose,” Taylor said, adding that the process is like “dating” because “we have to like them, and they have to like us, so that takes more than one date.
“On a more serious note, it takes mutual business goals, because we’re not a huge-volume manufacturer, so it has to fit into their business portfolio. [Karma franchises] usually are already multiline dealers and already have other high-end, luxury brands. So city by city, we have to find people that fit that profile. … Some of the brands that they have [don’t permit] anybody else in the showroom … With some of them, we’ve been lucky, where, for instance, one of the Bentley businesses got too big, and so they had to move it into another showroom. So now that the Bentley box is empty, we can just move in.”
