The Langley Auto Collection — a Vancouver-area luxury auto mall — held a “Tour de Gourmet” progressive dinner in June that not only spotlighted local cuisine, but helped raised money for two non-profits that provide financial assistance for children to participate in organized sports (KidSport Langley and Surrey-White Rock).
Additionally, the event also gave the five-store auto mall some nice exposure, as well.
Roughly 600 guests were split into four groups and then they rotated between four stores, each of which included the offerings of a celebrity chef, mixologist and some form of entertainment. The four groups came together at the end of the evening for a party at the mall’s Porsche dealership.
Dimitri Kotsalis is the area manager for OpenRoad Auto Group, which owns four of the five stores.
Speaking to Auto Remarketing Canada by phone in July, he said the event gave The Langley Auto Collection some attention from a marketing perspective, with local media picking up the story.
“And also just from a branding perspective, and in that theme of bringing the best from the city to the (Fraser) Valley — because the Valley in Greater Vancouver is expanding rapidly,” Kotsalis said. “It was once upon a time kind of a young bedroom community” but has since climbed in population, he said.
“And there’s a lot of demand, an appetite for premium events, along with premium vehicles, and we thought, again, what a great way to marry the two and provide a really premium event and marry that with some premium automotive products,” he said.
Similarly, the mall’s Porsche Centre Langley store holds a “Coffee & Cars” event the first Sunday of each month from April to October.
“It’s a fantastic opportunity (where) we got a lot of the real Porsche enthusiasts together, but it has spillover to other brands,” including Italian sports cars, muscle brands and supercars, Kotsalis said.
Benefits from being together
Speaking of opportunity, being a luxury-only auto mall certainly affords The Langley Collection plenty of advantages.
“It allows us, first off, to be more targeted in our marketing. So, we can be a lot more focused on message, specifically to premium,” Kotsalis said.
“So there’s a big advantage for us in that sense, but as far as our clients are concerned and the people that we draw, a big advantage for them is just the convenience of having seven premium brands all in one location,” he said.
“Of course, we all know that most research today is primarily done online, but there’s still the tactile experience — especially in premium — where people really want to experience the look and feel of the finishes of the vehicle up close, and things that may matter a little bit more to a premium buyer or to the premium market than to mainstream,” Kotsalis said.
“And of course, it gives people the opportunity to drive these cars, because that’s still again a very big component,” he said. “And when we speak to premium and especially when we start speaking about the performance side of premium — whether it’s an M4 or a 911 — people want to drive them.”
Pre-owned sales ‘absolutely vital’
Used cars can be an important part of the business at the mall, whose five dealerships include Audi, BMW/MINI, Infiniti, Jaguar/Land Rover and Porsche stores.
“It’s an entry into the market, certainly for a lot of people, and we take advantage of that however we can,” Kotsalis said. “But the used-car business, in general, is absolutely vital to the mall and is an integral part of our business plan. So we work actually quite hard to maintain the trades and minimize any wholesale, and resell as much product as we can.”
He said the auto mall is fortunate to be where it’s located, where it has a “town and country feel,” and allows them more space to hold more volume.
OpenRoad owns four of the five stores (the Audi store is not owned by the dealer group but is a partner in The Langley Auto Collection) and can hold pre-owned managers meetings regularly and move used inventory back and forth when needed and appropriate.
With pre-owned being such an important part of their business, it goes beyond the trade-ins they get; so a few months ago, they created a position of buyers specifically devoted to generating more used inventory for the mall, Kotsalis said.
He called this “absolutely vital for us,” due to the fact that for many stores, new cars are limited to what is allocated by the OEM to the store, Kotsalis explained. Whereas there are no such limits on used.
“And it seems to be the more we acquire, the more we’re able to sell,” he said. “It’s just the intensive efforts to have a smart purchase acquisition strategy and acquire as many as we can.”
Compressed margins. High wholesale prices. Reconditioning expenses. Ring a bell?
For many dealers, keeping their pre-owned lots well stocked while also making a profit has been difficult over the past 10 years or so.
And even though many are predicting wholesale prices to drop over the coming years as lease returns start flowing in, prices in the lanes remain high.
Chris Leavens, owner and dealer principal of Leavens Automotive Group — comprised of five stores covering the VW, Porsche and Audi brands — hasn’t been immune to these trying used-market trends.
But his dealership tackled the issue head on and found a way to alleviate compressed margin pain felt in the dealership, while also retaining the confidence of their used-car customers.
The answer: Leavens Certified. On top of participating in the factory CPO programs for their respective brands, the Leavens Automotive Group also offers certified used vehicles through its own branded program.
With both the factory and dealer certified vehicles selling well, Leavens noted close to 100 percent of the group’s used vehicles are certified.
While the factory CPO programs are helpful and largely popular among customers, Leavens pointed out there were some perfectly good used vehicles that just didn’t quite meet the requirements. And it was simply too expensive to recondition these vehicles to factory CPO standards.
“The factory certification programs are very stringent, and with the compression of the margins, we found with some cars it was just too expensive to bring them to the factory level,” said Leavens. “So the Leavens Certification still gives that customer peace of mind. And we feel it is a step above the non-franchised used cars.”
The dealer group launched the program about a year ago. Leavens said it has done very well because customers continue to see more and more value in factory CPO programs, as well as dealer-group certifications.
The Leavens Certified program includes:
- 112-point inspection on all makes/models
- Remaining comprehensive warranty or 6-month/6,000-kilometer Global Ultimate Superior Value Warranty
- 6 months roadside assistance
- 24 months paintless dent removal with regular scheduled maintenance
- 72-hour exchange policy
- CARPROOF Vehicle History Report
- Maximum value pricing
Leavens described the program as a “happy medium” between non-certified used vehicles and the factory CPO cars.
“So we can meet the customer’s high expectations with things like the exchange policy and roadside assistance, but we don’t have to have say, 50 percent of the brakes left, or 50 percent of the tires, which are the things that sometimes drive the recon price for CPO vehicles beyond the market,” Leavens explained.
The program also helps the dealer group stand out from the pack amid their competition.
“We try to give people the same buying experience purchasing a pre-owned car that they would get buying a new car from us, and this certification program helps us do that,” Leavens added.
Diversifying the used lot
As for what vehicles and models are selling particularly well under their branded certification program, the Volkswagen Jetta continues to be a great seller. But what Leavens said he is really noticing is more consumer interest in trucks and SUVs. For the VW brand, that means more pre-owned Tiguan sales.
“They are really selling well right now. I think that is a market trend right now. We aren’t alone in that. We are really seeing trends go more toward trucks and SUVs,” Leavens said. “In fact, we stock off-make trucks in all the stores now because they sell really well.”
He shared diversifying their used inventory to mirror new-car market trends has been key to success in their used department.
“With the new-car market being over 50 percent trucks and SUVs, we really want to see our used-car inventory mirror new-car sales at roughly 50 percent trucks and SUVs,” said Leavens. “And we are finding VW not having any trucks and only one large-selling SUV, it has made us really look at off-brands to ramp up the supply of vehicles to meet consumer demands.”
Leavens and his used-car managers are finding these quality used cars — on-brand and off — by working their customer databases, as well as other dealerships and auctions. They also employ manufacturer online services to find inventory, as well.
As far as how off-lease trends are impacting the dealerships and their used inventory, Leavens said incentives are strong, which is helping pull people out of leases. But with VW in particular, values are very strong in those lease-end vehicles.
“We haven’t seen a particular benefit from the growing number of lease returns yet for the used-car department. The gross on those vehicles in a real challenge,” Leavens said.
Volkswagen dealers have also been impacted by the so-called “Dieselgate” lawsuits, and the volume of trade-ins has dropped off.
“That has caused all VW dealers to look to outside sources, such as auctions and wholesalers. And that has naturally driven the value up a little bit on the cars,” Leavens said. “So we haven’t seen any drop in VW wholesale prices. In fact, we might have even seen a slight increase due to the demand by the dealer body in Canada.”
But, a significant number of VW customers remain loyal to the brand, Leavens said, and this is always good for the used department.
“In general, all these brands have very good customer loyalty. Porsche is probably the best of all of them,” Leavens said. “And this certainly helps us stock our used lots, and sell off of our new.”
Canadian auto superstore HGrégoire recently announced it will add two new franchises to its network to service the needs of customers in Southwestern Québec.
The company’s new dealerships, HGrégoire Infiniti and HGrégoire Mitsubishi, set to open in August, are both located in Chomedey, Québec.
"HGrégoire continues to be the leader in the new and pre-owned vehicle industry," HGrégoire president John Hairabadian said in a news release. "We have redefined the experience of purchasing a vehicle and are always seeking innovative ways to answer our customer's needs. The addition of Infiniti and Mitsubishi dealerships in Laval enhances our offer to new car buyers in the North Shore region, making HGrégoire a must-go-to destination for anyone looking for a new or pre-owned car."
The company said it will invest an estimated $35 million to fund the two new projects.
HGrégoire also expects to bring on a total of 60 new employees to staff the two locations.
"We are delighted to partner with HGrégoire's dynamic and experienced group," said Stephen Lester, managing director of Infiniti Canada. "Our relationship continues to flourish thanks to HGrégoire's exceptional understanding of the Québec automotive marketplace and their commitment to Québec consumers."
HGrégoire’s Infiniti dealership is located at 1950 Boulevard Chomedey and the new Mitsubishi dealership is located at 2465 Boulevard Curé-Labelle.
"HGregoire Group has the knowledge and expertise to provide Mitsubishi Motors customers with an exceptional and enjoyable experience," added Mitsubishi Motor Sales of Canada president and chief executive officer Tony Laframboise. "We're delighted they have joined our family as our 37th dealer in Québec and the first to adopt our new Dealer Image Program in the Greater Montreal Area," he added.
PERQ has expanded its footprint to now offer its web engagement platform services in Canada, the company announced on Wednesday.
"Why shouldn't auto dealerships in the U.S., and now Canada, have the opportunity to offer consumers a personalized, Amazon-like experience on their dealership websites?" PERQ president and co-founder Andy Medley said in a news release.
"We believe this is the standard to strive for. Our data consistently shows a large percentage of dealership website visitors are still in the early phase of their shopping process and that this kind of approach increases conversions up to 200 percent. We're excited to bring this level of success to dealerships across Canada."
Currently, PERQ's platform is in the early stages of adoption in Canada. The company said it has already generated a 31-percent conversion rate for a British Columbia dealership it studied.
"The quality of the leads is much better. The people are more qualified buyers and we're having a higher success rate on converting leads to sales," Harris Mazda general manager Doug Culham said in the release.
Harris Mazda of Nanaimo in British Columbia is one of PERQ’s first clients in Canada. Other online tools the dealership previously adopted lacked compared to results delivered by PERQ, according to owner Tony Harris.
Additionally, Harris said he is pleased to not have experienced "cross-border" problems when adopting PERQ's web engagement technology.
"Usually, when we integrate with a vendor from another country, it doesn't go well and there are issues with the conversion and integration," Harris said. "I'm happy to say with PERQ, we haven't had any issues."
Scott Davidson, president of Stop 23 Auto Sales in Listowel, Ontario, says he is passing the torch to the next generation of owners.
In May, Davidson’s sons Jason Davidson and Justin Davidson, along with Bill Watson, have transitioned into owner partners of the dealership.
When asked to name the top challenges independent dealers face in Canada, Scott Davidson pointed to the weak Canadian dollar.
Due to operations expenses, he said, the factors impacting the dollar’s standing are concerning.
“Because of the weak Canadian dollar, our cost of goods sold is too high,” Scott Davidson said. “Ongoing cost internet marketing is expensive in Canada and also there’s the lack of deep capital markets in Canada to finance independent operations.”
He added there’s also a lack of skilled labor for some service department positions, a problem he said many other dealerships face.
In spite of challenges, Davidson said Stop 23’s team prides itself in getting car buyers in and out quickly.
“We complete deals in 30 minutes flat,” Davidson said. “We use one point of contact throughout the entire process. The salesperson does a complete deal — front to finish.”
Stop 23 carries a wide range of different brands and models and says it competes directly with new-car dealers.
The family owned dealership averages approximately 900 retail used-car sales a year and 1,600 wholesale, according to Davidson.
“We constantly put up our sales targets year-over-year. Our numbers year-over-year are very consistent,” Davidson added. “What also makes us unique is we have a robust wholesale and export division with buyers across Canada.”
Founded 35 years ago, Stop 23 mostly sells one- and two-year-old vehicles, and specializes in trucks and SUVs. The dealership received the North Perth Chamber of Commerce Business Excellence Award for Large Business in both 2016 and 2015.
Porsche Cars Canada recently opened Pfaff Porsche, its second Certified Porsche Classic Partner.
Pfaff Porsche sells Porsche Classic models as well as genuine parts and service for those models. It is also the seventh in North America, according to Porsche Cars Canada.
"The new Pfaff Porsche is a facility that fosters the fascination surrounding the brand's sports cars from the moment you step on the premises," Porsche Cars Canada president and chief executive officer Alexander Pollich said in a news release.
"Becoming a Certified Porsche Classic Partner will allow the team at Pfaff to continue to build on this allure and showcase the range of services that are available for Porsche Classic owners."
With Porsche's growth in the market, there were more than 65,000 Porsche vehicles in Canada at the end of last year, the company said. Classic Cars represented a third of those.
Canada’s auto industry appears to have taken a big step towards online retail.
FCA Canada and Dealertrack Canada announced an online retailing solution on Tuesday designed to let customer begin the car purchase online through dealer websites.
The digital retail tool, which the companies worked on together to develop, can provide dealers with website upgrades designed to foster online processes for car purchases.
This is Dealertrack Canada’s first digital retail partnership with an automaker since announcing the technology for Canada in January.
The companies estimate that about 90 percent of Canada’s FCA dealerships are participating.
At first, consumers will be able to pre-qualify and apply for financing online and access payment estimates on vehicles actually in dealer inventory.
FCA said it aims to include a trade-in estimator in the future, along with the capability for the consumer to put down a deposit to reserve and buy service packages.
One important note is that the purchase will still need to be finalized at the dealership.
“Today’s consumers have high expectations from their online experience,” FCA Canada vice president of sales marketing Bill Levasseur said in a news release.
“They are extremely well-informed and want control to purchase quickly, with security, accuracy and transparency,” he said. “Our goal with the dealer website enhancements is to make the car buying experience easier by providing useful, integrated tools which simplify the process and provide consumers peace of mind.”
Dealertrack Canada vice president and general manager Richard Evans added: “Dealertrack Canada is very excited by this partnership and together, with the goal to facilitate a more efficient and satisfactory buying experience for both consumers and FCA dealers in Canada.
“There is a rapid shift in consumer demand for a digital assisted buying process and additionally our digital retailing technology will support buyers while helping drive added volume sales for FCA retailers nationally,” Evans said.
'Really fired up'
In a May phone interview, Evans was asked how far away Canada was from being able to buy a car 100 percent online.
“First of all, isn’t that exciting?” he said. “Just the prospect of it has us really fired up.”
Evans said the company was “not ready to set a specific timeline” as to when Canada, in particular, would have full online auto retail, “but we see it coming.”
He added: “We think it’s coming quickly. It’s going to sneak up. And I think the most exciting part of that is that the consumer demand is there.”
Through its own data and outside market research, Dealertrack has found that it’s not only a want of consumers, but dealers as well.
“So, we feel confident we’re marching in the right direction here,” Evans said.
Most other retail industries, everything from electronics to home improvement, have taken perhaps more significant steps around digital retailing. But the car business is moving in that direction.
“We (in the automotive industry) use the term ‘digital retail’ around automotive as if we’ve sort of taken the claim to this, but digital retailing has transformed pretty much every sector already,” Evans said. “I think it’s automotive that’s now getting there. And we talk about digital retailing around that; but digital retail is out there, consumers are already using it, it’s really just automotive catching up to that reference.”
StreetXtreme Auto Gallery president Patrick Hoang originally got his industry start as a mechanic about 15 years ago. Now he’s developed a business as tuned and supportive as the machines he used to repair regularly.
The roots of StreetXtreme Auto Gallery germinated from the service and body shops that are still running strong. Hoang often handled reconditioning work for other dealerships. But then, about three years ago, Hoang started his own retail operation.
“We figured, you know what? It’s going to benefit our service department and it’s going to benefit our body shop … because we have that strong background in the repair and auto body side,” Hoang said.
The independent dealer carries about 60 units in inventory, luxury models from Audi, Mercedes-Benz and Porsche, along with family haulers from Honda and Toyota.
“We try to find clean, accident-free cars. That’s our niche,” Hoang said. “We don’t want to be the ones buying the car that’s been flooded or has fire damage; or any type of damage, to be honest.
“We’re not here to be the cheapest car out there because that’s how you become the cheapest cars is you find damaged ones. We try to stay within the top five if possible in pricing but also offer the cleanest cars,” he continued.
“If you want to succeed, you’ve got to start with a clean platform, especially in the used market,” Hoang went on to say.
And StreetXtreme Auto Gallery makes efforts to bring these vehicles back to nearly the point where they just rolled off of the factory assembly line. Again, it points back to Hoang’s background as a mechanic and body shop technician.
“Nothing gets past our eyes. There are a lot of dealerships out there that will just put the cheapest pads on there and use the cheapest labor that will do the work,” Hoang said.
“When I was a full-time mechanic, I was approached by a lot of dealers saying, ‘Hey can you install my brake pads for $30?’ That’s not the case here,” he continued. “We order OEM parts from our suppliers. Our techs are doing the work. Everything is streamlined in-house. We put proper work into our cars. We don’t like to sell cars with dings, dents and scratches because we have the ability to fix them. We usually try to get all of that sorted out beforehand.
“That’s what makes us different from the rest of the dealers. There are no shortcuts taken here and we back it up. If there is a problem within the first 30 days, even if it’s just a minor adjustment, it’s not a problem. It’s in the contract for peace of mind,” Hoang added.
Hoang is continuing to diversify his business. To continue to help the service and body shops, the operation is looking to add a rental car fleet as well as trucks to transport inoperable vehicles in for repairs.
“This is just the start,” he said. “We’re looking for different avenues to complement our business. I think it’s going to be a very big year for us.”
This story appears in the Leading Independent Dealers section of the May/June issue of Auto Remarketing Canada.
CarGurus recently released a survey that found trust to be a leading factor for consumers when shopping for expensive purchases, such as cars.
“Survey respondents indicated that the car shopping process is very much in need of increased transparency if dealers are to win the trust of Canadian car shoppers,” the car research and shopping site said in a news release announcing the survey.
When asked which major purchases, such as a car, home, mortgage or event tickets yielded the most transparent information on price, CarGurus said: “only obtaining a mortgage (7 percent) fared worse than car buying (9 percent).”
More than a third of Canadians' trust in a seller fades away if the store price is greater than what they read advertised online, according to the survey.
23 percent of respondents said a detailed cost breakdown would increase their trust in a seller and 31 percent said they determine trustworthiness by word of mouth.
Consumers use both price information and customer reviews to make their opinions and decisions, the survey found.
Nearly half of Canadians rely on customer reviews to determine if a website is trustworthy, according to CarGurus.
Additionally, 40 percent of survey respondents said when researching expensive items online the appearance of both positive and negative customer reviews make the process more transparent and trustworthy.
"Establishing trust goes a long way with consumers, particularly those making big purchases," CarGurus senior vice president of consumer marketing Sarah Welch said. "In our experience at CarGurus, we've seen just how much transparency – providing reliable, easily accessible customer reviews, engaging with negative reviews and keeping updated price information across online inventory platforms – enhances the consumer shopping experience, and in turns benefits dealers."
Pfaff Automotive Partners has added both Town + Country BMW and MINI Markham to its growing group of dealerships, the group announced on Wednesday.
“We're excited today to welcome Town & Country BMW and MINI Markham into our family,” Pfaff Automotive Partners president and chief executive officer Christopher Pfaff said in a news rlease. “We share many of the same values, including a vision for continuous growth and improvement, and a connection to the communities where we live and work.”
The addition of the two stores not only expands Pfaff’s portfolio to include the BMW i and MINI lineups but also gives the group a solid BMW presence throughout the Greater Toronto Area, according to the group.
“Town + Country will provide BMW fans access to two new and pre-owned vehicle inventories, as well as exceptional Pfaff customer service in both the west and east GTA — giving them a new level of convenience and choice. The addition of MINI to our brand offering provides Pfaff customers with another passionate, exciting brand to choose from,” Pfaff said.
Town + Country BMW has a 28-year history with the BMW brand. Founded in 1989, the store moved to its current location in Markham in 2002 and it recently expanded to double the size of its service department.
Additionally, over 200 new associates from Town + Country BMW and MINI Markham have joined the growing Pfaff group.
