It has been a busy year on the expansion front for OpenRoad Auto Group, an 18-store group covering 15 franchises in British Columbia.
After opening Jaguar Land Rover Langley in December, OpenRoad and Jaguar Land Rover Canada held a grand opening for the all-new dealership in March.
In June, OpenRoad and Audi Canada held a grand opening for OpenRoad Audi Boundary’s new location, after the store moved into the new facility in May. The store is located in Burnaby, B.C.
Additionally, the group announced in May it had officially opened OpenRoad Volkswagen in Burnaby, a brand-new dealership with a private grand opening scheduled for Aug. 13.
Auto Remarketing Canada reached out to the general managers at each of those stores to talk used cars, early success stories, new facilities and more.
Jaguar Land Rover Langley
In the first half year or so of operations, GM Daniel Russman has been pleased with the early momentum that Jaguar Land Rover Langley has picked up.
“We didn’t really foresee this sort of success right off the bat, and month after month we’re exceeding every single target put out for us,” Russman said in a phone interview. “And in terms of staff, starting with a brand new dealership and hiring all brand new staff, it’s really remarkable to see how well everybody is finding their role, finding their niche and really exceeding at what they’re doing.”
When asked about the biggest challenge in the used-car market, Russman said that it’s often tough to find quality pre-owned cars.
The most optimal plan of attack, he said, is to source cars through the store’s own dealer network and through customers that come in the front door (and selling those customers new rides, too).
As far as how used-car sales have fared for the new dealership, Russman said there were hurdles in sourcing vehicles at first, but after a few months the store was able to utilize its resources, ultimately generating strong used-car sales, he said.
OpenRoad Audi Boundary
With a brand new facility comes a lot more breathing room for this Burnaby dealership.
In May, OpenRoad Audi Boundary moved into this four-story, 113,000-square-foot facility, which is adjacent to the old facility where it operated for more than a decade.
It includes an indoor showroom, and as general manager Brad Beckett pointed out, the 12-car drive-through.
“In Vancouver, we deal with rain,” he said in a phone interview, comparting the climate to Seattle’s. “Whenever we get a chance to get our customers in and out of the rain, (that is) great.”
The store has the capacity to park 270 cars in the building, which includes the new-car and used-car displays plus the storage space.
“A customer comes in and they can see every color of a Q5 — once again, inside, out of the rain (and) in a beautiful environment,” Beckett said. “So that’s allowed us to pick up some nice increases in our sales.”
Has also noticed more enthusiasm and greater morale among employees.
“Being in a store that was way too small, there was a stress that came with that. None of our staff could park on the lot, including myself,” he said.
With the new store, they’re able to park on the lot, have their own desk and work in a “beautiful environment,” he said.
“And they’re just so much happier, so much more relaxed, which I think allows them to give the customers a better experience,” Beckett said.
What’s more, the old location could only hold about 15 used vehicles on the lot, which hamstrung some of their marketing on those cars. In response, the store has been ramping up its online presence the past year-and-a-half.
The new facility has a much higher used-car capacity, and the dealership is developing a photo booth at the store, as well.
“We see our used-car department as one of our biggest growth opportunities. We’re really excited about what we’re going to be able to do,” Beckett said. “We’re going to be able to have a standalone used-car staff.
“We’re going to be able to have a set of professionally built in-store photo booths, so we can take the highest quality pictures. We’re going to be able to have, probably, close to 50 cars inside for people to come and see.”
The challenge with all that is finding the right inventory for this new-found used-car capacity.
In the Vancouver area, most folks can get into Washington state in an hour or less, so the U.S.-Canadian rate plays a big role, Beckett said, particularly when the Canadian dollar is as soft as it has been in the past year amid oil price drops.
“It’s a two-sided story. We’re getting a lot more money for our wholesale pieces, but also, we’re finding it much harder to keep inventory here,” Beckett said. “Because, obviously, people that are selling either privately or selling (through) other means are getting good value for their used cars and then they’re going across the line, in a great demand.”
Also, given the brand strength of Audi, a lot of owners are holding on to those cars longer, Beckett said.
He said the store sells roughly 35 used cars each month, but the aim is to move it to 50 or 60 — which of course will require brining in additional higher-quality used units each month.
So, how do they adapt to find more used cars? There is a three-part strategy, Beckett said.
First, OpenRoad Audi Boundary needs to “have a much more critical eye to our wholesale,” he said.
“Really, really ask those tough questions when we decide to wholesale a piece,” Beckett said. “Secondly, I think we need to be much more aggressive on our lease-end customers: trying to get them out of the car early, using some of the great programs that Audi has to be much more aggressive on our portfolio and push those cars. And really, look at your portfolio as, ‘what cars do you want on your used-car lot,’ not ‘what used cars you want to sell.’ And then really target those customers.”
Additionally, he also said the dealership needs to step up its efforts in terms of scouring sites where consumers sell cars privately.
And when an appraisal is being done, Beckett wants to have two managers working on it to provide another set of eyes.
OpenRoad Volkswagen
We asked Ben Lovie, the general manager of this 45,000-square-foot facility, what some of the early success stories were for OpenRoad VW.
“Guests have embraced our modern Westcoast VW experience. The bright, airy facility with all the modern dealership amenities was all carefully planned out and now operating in the space for the past two months, it does seem to have been designed very well,” Lovie said in an emailed Q&A.
“Our flexible dealer approach is also resonating with car buyers. Extended test drives, special programs from newcomers to Canada, iPads for guests to use in the showroom, free use of our car rooftop boxes and bike racks are some things we are doing different,” he said.
“I am very proud of the team here. There is a positive vibe in the store — and what may seem like a crazy thought — but I get a sense our team really enjoys coming to work. This positive vibe obviously rubs off on our guests.”
Lovie also shared a bit about the used-car sales for the brand new store.
“As you can expect, it’s going take a while to get our inventory levels up and be in a position to buy in cars at competitive prices,” he said. “In the early stages, we are focusing on processes around appraisals, reconditioning and online and on-the-lot merchandising — there is always room for improvement in our processes before we get too focused on volume and turn.”
Many of us may approach turning 50 with mixed feelings, but for Pfaff Automotive Partners, crossing the half-century mark a couple of years back was a truly exciting milestone.
As Pfaff Automotive settles into its second 50 years, president and chief operating officer Christopher Pfaff offered his thoughts on a changing industry, challenges in the used-car market, as well as what’s on the horizon for the 52-years-young business.
The London, Ontario-based dealer group got its start when H.J. Pfaff emigrated from Germany and launched H.J. Pfaff Motors. Christopher Pfaff took ownership of Pfaff Automotive Partners in 1986.
Pfaff today has nine dealerships plus two leasing and two service locations throughout Ontario and British Columbia. The company deals in super/luxury brands (McLaren, Pagani, Audi, BMW, Porsche) as well as Volkswagen and Toyota Scion.
So there is a bit of balancing the needs of high-end and mainstream buyers.
According to Pfaff, buyers in both categories want a fast, convenient, reliable purchase experience from a trusted source. After that, he said, the two groups diverge.
“Our high-end buyers typically purchase more vehicles with us over time, and find an increased level of engagement with Pfaff through our track events, international driving experiences, and their involvement with car clubs,” he said. “Conversely, those looking to purchase a reliable vehicle want an experience that is seamless and gives them confidence in the car they’re purchasing and the dealer they are working with.”
And whether buyers are in the market for a used Porsche or a used VW, Pfaff is paying attention to how it draws customers to its used departments. According to Pfaff, a strong online presence is top of the list.
“We’ve invested heavily in vehicle merchandisers to ensure the quality and consistency of our photography and descriptions are there, and we are dedicating more of our online advertising budget to pre-owned cars and seeing success,” he said.
“In addition to that, it’s important to acquire and maintain healthy inventories at all of our stores — so we have what people are looking for — and highlight the manufacturers’ certified pre-owned programs to build consumer confidence, and emphasize the benefits of buying from a franchised dealer.”
The used business is not without its challenges.
“Inventory is a constant challenge,” Pfaff said, “and we are constantly evolving and adapting our practices to make sure we have what our customers are looking for. An interesting consequence of the growth of our pre-owned business has been extra strain on our service capacity — the pressure to get cars to market quickly, and not have them stuck in reconditioning, has created some challenges.
“New government regulations about disclosure ensure that our processes are transparent, and safety and reconditioning standards are met. While we are a big supporter of the manufacturers’ CPO programs, keeping a balance between their involvement in the business and our own needs is something we are always thinking about. The management of stop-sale actions on pre-owned inventory (Takata airbags; diesel) are an example. We are always considering our position, and trying to minimize these issues’ financial strain on our business.”
As far as trends in the used-car market, Pfaff cited changes in consumer confidence and consumer behavior.
“Due to government regulations as well as the manufacturers’ promotion of their certified pre-owned programs, (consumer confidence) is higher than it’s ever been, and has helped build the value in quality used cars. More than ever, new-car dealers are seeing their used business as an integral part of their business.
“Customer behavior is changing as well. Consumers research and find what they want online, so it’s more important than ever that we’re providing the information they need — in the form of detailed descriptions and good photos. They simply don’t do physical lot-to-lot searches anymore.”
That means digital technology is critical. “How we represent ourselves online is crucial to attracting consumers to our used inventories, and to beginning a discussion with a potential buyer. Great photos, accurate and well-written descriptions, full and transparent vehicle histories, and technical highlights of the relevant model year vehicles are a must.
“Pfaff has had particular success marketing some of its more unique, high-priced vehicles online. Special editions, custom-ordered colors, individual options, and other outliers are great fodder for social media, which continues to drive an increasing amount of our online traffic. We have even created entire campaigns around special pre-owned vehicles at our Audi, Porsche and BMW dealerships.”
After having opened the country’s first McLaren store in 2012 (in Toronto; McLaren Vancouver opened in 2014), Pfaff is poised to open its third McLaren dealership in early 2017 — this time in the Montreal suburb of Laval. Pfaff hired brothers Nino and Renato De Cubellis — owners of Jaguar Land Rover in Laval — to open the dealership.
“We are very excited to help bring McLaren to the Quebec market,” Pfaff said. “It is an incredibly vibrant, high-performance car market, and we already have a great customer base there. We’ve found the right partners in Nino and Renato De Cubellis in Laval, who are great advocates for the brand and are making the appropriate investments to deliver a McLaren-level experience for our customers.”
As far as continued growth and expansion, Pfaff could only offer a hint: “More is on the way.”
Porsche Cars Canada announced the opening of the country’s first Certified Porsche Classic Partner: Porsche Centre Victoria.
It will be the fourth of its kind in North America and 39th worldwide, providing owners of Porsche models older than 10 years genuine parts, service and classic car sales.
“Porsche Centre Victoria was a natural fit to become a Porsche Classic Partner to showcase the range of service that will be provided to Porsche Classic owners,” Alexander Pollich, PCL president and chief executive officer, said in a news release. “Over 70 percent of all Porsches sold globally are still on the road today, and with a responsibility to help maintain these classic models and owner enthusiasm, Porsche established Porsche Classic in 2005. We are certainly thrilled to mark this momentous occasion and have the first Porsche Classic Corner in Canada open.”
Supplying Canadian Porsche owners with 52,000 Classic parts, growing to the list of parts already available, will ensure the best care possible for their vehicles. In the showroom, the dedicated Porsche Classic Corner is clearly identifiable as a visual highlight and a Classic brand experience.
Meanwhile, PCL, along with the Wyant Group, officially broke ground on Porsche Centre Kelowna. Located at Finns Road and Stremel Road off of Highway 97, Porsche Centre Kelowna is expected to open in early 2017 with a nine-car showroom, new vehicle delivery experience location, and 10-bay workshop.
“Kelowna marks an area of strong potential for the Porsche brand and we are glad that Vaughn Wyant and the Wyant Group are going to be taking care of our loyal, growing customer base in the area,” said Pollich. “Kelowna is an exciting opportunity for Porsche Canada and we are positive that it will show strength within our developing network.”
Porsche Centre Kelowna will be the eighth Porsche Centre in Western Canada, making the split from Western to Eastern Canada nearly identical.
“Breaking the ground on Porsche Centre Kelowna symbolically represents more than just where the next opportunity for the Wyant Group will be built, but it also marks where we will be committed to fostering new relationships and delivering service beyond expectations to the surrounding community,” said Vaughn Wyant, president and CEO of the Wyant Group.
Porsche Centre Kelowna will be the Wyant Group’s second location, along with Porsche Centre Saskatchewan.
Porsche Cars Canada is an independent subsidiary of Porsche AG.
Mercedes-Benz Canada expands operations in New Brunswick
Ground has been broken for a Mercedes-Benz retail facility in Dieppe, New Brunswick, that is scheduled to open next spring. The store will serve as a satellite for TriStar Mercedes-Benz in Saint John, New Brunswick, in order to better serve the growing after-sales, parts and accessories needs of customers in the Atlantic provinces.
The 11,425-square-foot facility is being built on a 3.3-acre site at 1200 Aviation Ave., an important regional commercial center close to the Greater Moncton International Airport. The new home of the Mercedes-Benz, AMG and smart brands will feature a 6,000-square-foot service area featuring eight state-of-the-art bays.
The design and layout of the new facility will follow Mercedes-Benz’s proprietary “Autohaus” concept, which includes liberal use of glass to maintain transparency and create a bright and airy feeling. It also features black design elements that, coupled with accents of silver, are reminiscent of the three-pointed star.
“I’m delighted that Mercedes-Benz has chosen Dieppe for this key development in their retail network,” said Ernest Thibodeau, deputy mayor of Dieppe. “Ours is a region that has seen incredible growth in recent years, rapidly becoming a bustling hub for retail, industry and culture. Mercedes-Benz is a fantastic addition to Dieppe’s offerings, and will join other influential brands in this strategically important location. This new development will benefit not only the region, but the Maritimes as a whole.”
Ian Brett, dealer principal of TriStar Mercedes-Benz, added: “We are thrilled to be expanding our business in New Brunswick with this affiliated store, and will work tirelessly to ensure that the significant investment announced today will result in an experience that truly embodies the Mercedes-Benz promise to deliver the best or nothing.” Brett was joined at the ground-breaking by general manager Andrew Peters.
“TriStar Mercedes-Benz has been a trusted partner of Mercedes-Benz Canada for a long time, and it is our pleasure to support Ian Brett and his team as they grow their business outside of Saint John,” said Brian Fulton, president and CEO of Mercedes-Benz Canada. “This new satellite store will provide a convenient point of sales and service, effectively solidifying and developing relationships with new, existing and potential customers in an important — and increasing — market.”
4 million.
According to statistics shared on the Canadian Automobile Association’s website, that’s how many car crashes in North America involve distracted driving annually.
Citing 2011 data from Alberta Transportation, CAA says the likelihood of an accident is three times higher for a driver who is distracted.
And The Dilawri Foundation — which is the charitable organization of the Dilawri Group of Companies, a 58-store dealership group in Canada — is aiming to curtail this problem through “positive reinforcement.” And a bit of fun.
Enter “texi,” a mobile app the foundation launched in January that incentivizes safe through contests and prizes.
Here’s how it works, according to a news release when the product was launched:
The driver turns the app on before he or she begins driving. The user earns a point for each minute he or she drives without using the phone. The app auto-responds with memes — which can be pre-selected by the user — to texts that come in while the app is activated to let the person sending the text that the user is on the road.
Users are entered into prize drawings each month.
The size of the potential prizes increases based on how many points the driver has. The points system resets on the first of each month.
As of mid-July, there had been more than 5,000 downloads of the app, said Rosita Chakardan, who is the director of The Dilawri Foundation and the national marketing and public relations manager for the Dilawri Group of Companies.
“Distracted driving has become a serious issue on Canadian roads with the number of associated accidents on the rise. With a new generation of Canadian drivers on our roads, The Dilawri Foundation wanted to provide free access to a reliable, fun and easy-to-use tool that rewards safe driving,” Chakardan said in an emailed Q&A about the texi program.
“Considering our connection to the automotive retail space, we have a sense of duty to actively participate in helping our communities develop healthy driving practices,” she said.
When foundation founders Tony, Kap and Ajay Dilawri began putting together ideas for a campaign to help reduce distracted drivers, a big part of their focus was offering “positive reinforcement” for driving safely, rather than taking a “policing or punitive approach,” Chakardan said.
The foundation spent more than a year developing and testing the app, then launched texi in January.
It largely is aimed toward millennials to get drivers practicing safe driving from the get-go, she said.
“For this reason, the tone and function of texi are social, fun and incentive driven. Staying true to this demographic, our campaign launch was primarily focused on social media through vibrant and fun images and videos,” she said.
Its prizing partners including TELUS and Kernels Popcorn. The foundation also received financial support from development partners like TELUS, TireLink, autoTRADER.ca and Snap-on.
Dilawri’s dealerships are also getting involved.
“Dilawri dealerships have been an integral part of driving awareness of the texi campaign. texi is being supported by our dealerships through in-store collateral, vehicle branding and web presence,” Chakardan said. “As the largest automotive group in Canada, the in-store and online approach to raising awareness has been very effective given our group’s volume of showroom and online traffic.”
Looking forward, Dilawri’s goal with texi throughout 2016 is largely to continue boosting awareness, she said.
“The Dilawri Foundation’s ultimate goal is to positively affect as many Canadians as possible through incentivizing good driving habits,” she said. “The core focus over the next year is around growing the awareness of texi as a free solution to distracted driving.”
The next issue of Auto Remarketing Canada will spotlight the Leading Dealer Groups of Canada.
In this special edition, we will showcase some of the country’s oldest, biggest and most influential dealer groups, as well as the up-and-comers making waves in the Canadian used-car market.
Similar to last year, we hope to highlight the stories behind these businesses and share a bit about their pre-owned operations, plus recap stories stemming from the country’s biggest dealer networks over the past 12 months.
All to give our readers a well-rounded view of the operations and stories behind some of Canada’s top dealer groups.
If you are part of a top dealer group in Canada — or can recommend a dealer group with a great story to tell — don’t hesitate to give senior editor Joe Overby a shout at (800) 608-7500, ext. 129, or email him at [email protected].
And be sure to check out last year’s issue as a guide.
Earlier this week, autoTRADER.ca and Mobials announced the launched of a program that rewards dealers who consistently receive positive reviews from consumers.
Dealers participating in this Consumer Trust Certified Program receive badges to display on their lots and online.
The partnership between the two companies is designed to integrate Mobials’ Reviewsii product and TRADER’s marketplace and website solutions.
A rating for a dealer is calculated through an algorithm that considers the store’s average consumer rating and the total number of reviews on the store.
Through Reviewsii, dealers can display consumer reviews as part of their vehicle listings on autoTRADER.ca and own their own websites.
“We are constantly striving to empower consumers to make informed purchasing decisions as well as offer practical solutions for automotive retailers to help improve their business,” said Ian MacDonald, director of consumer marketing and experience at autoTRADER.ca. “Partnering with Mobials has enabled us to offer credible dealership reviews to create a more transparent shopping experience for all involved in the purchase process.”
The companies encourage customers to share their reviews via social media, which are then automatically posted to the dealer pages. This gives the dealer a way to respond to and engage with the reviewer.
“The traditional review ecosystem works against dealers,” says James Hayes, co-founder and chief executive officer at Mobials. “We provide a solution for dealers that enables them to leverage verified consumer reviews where potential car buyers are searching today.”
According to the companies, 705 Canadian dealers have signed up for a free Reviewsii account and 105 have become Consumer Trust Certified.
“Receiving positive reviews and publishing them in a prominent place is essential for dealers seeking to be successful at selling cars in 2016,” said MacDonald. “It’s crucial for dealerships to be aware of their customer satisfaction and strive to improve it.”
Steven Landry will be the new chief executive officer of AutoCanada starting April 1, the company announced last week. Tom Orysiuk is remaining AutoCanada’s president, while Pat Priestner will become non-executive chair of the board of directors on May 6.
Priestner has a target retirement of May 2017 at the company’s annual general meeting.
“I very much look forward to joining AutoCanada, a company that I have much admired, and I look forward to putting my experience to work building upon the great success of Pat and his team with a continued focus on long term shareholder value,” Landry said. “I am very excited to lead AutoCanada into its second decade.”
Landry’s most recent post was as chief development officer at ATCO Ltd & Canadian Utilities Limited in Calgary.
That followed his time at managing director and chief operating officer for ATCO Australia. Before that post, Landry was with Chrysler Group for 27 years. He held several positions there, including CEO of and president of DaimlerChrysler Canada.
AutoCanada also announced that COO Steve Rose is retiring on Oct. 1.
“AutoCanada is a tremendous company with a strong future. A key to the continued success of any organization is the succession of its senior leadership. Steven Landry, a proven and successful leader, with broad Canadian dealership knowledge, automotive manufacturer relationship and U.S. automotive retail experience, perfectly complements the existing executive team,” Priestner said.
“Steven brings considerable executive skill to the existing management team and provides for the transition of my role while ensuring that Company continues with its focus on driving long term shareholder value. Tom Orysiuk shall continue in his role of providing exceptional operational leadership combined with a deep understanding of the automotive retail industry and AutoCanada culture. This is a team and a plan that I wholeheartedly support,” he said.
AutoCanada announced this week its plans to sell the operating assets of its Newmarket Infiniti Nissan store in Newmarket, Ontario – a deal which is expected to close this week.
The proceeds of the sale are expected to reduce the company’s debt by roughly $11,500,000, while the company is also planning to sell excess lands it had previously acquired to build a separate facility for Newmarket Infiniti.
"As part of our regular evaluation of dealership performance, an unsolicited opportunity was presented to management,” said Thomas Orysiuk, AutoCanada’s president and chief executive officer. “Following a thorough review, management concluded that the dealership sale proceeds, when combined with the additional benefit of reducing the company's obligation to build a separate facility for Newmarket Infiniti, made the transaction the right thing to do from a long term shareholder return perspective."
On the topic of shareholder return, AutoCanada also recently declared a quarterly dividend of $0.25 per common share on the company’s Class A shares, payable on March 15 to its shareholders on record at the close of business on February 29.
"We continue to closely monitor the economic environment in our key markets and the automotive environment in the Canadian economy generally, and Alberta in particular, suggests that fiscal 2016 will be more challenging than the previous year from a retail perspective,” Orysiuk said. “The increase in unemployment levels and erosion of consumer confidence will likely continue throughout the year. One positive outcome of this challenging environment is the likelihood that good acquisition opportunities will come available which bring long-term shareholder value.”
In other Canadian acquisition news, it was recently announced that the Steele Auto Group has purchased Parkway Hyundai, located in Corner Brook, Newfoundland and Labrador. The purchase deal is expected to close at the beginning of March.
TRADER Corporation recently announced that it will be hosting the second annual Industry Day as part of the Canadian International AutoShow in Toronto.
Taking place on February 12 and featuring activities tailored for OEMs, agencies and automotive dealers, TRADER will also present an automotive sales and marketing event titled, “Carology: The Science of Selling Cars.”
The event will be free for industry professionals only and will include complementary early access to the AutoShow floor.
The Carology event will focus on how Canadian consumers shop for cars today, including their influences, where and how they research, how many dealerships they visit and recommendations for the industry to better meet their shopping desires.
Carology will feature an expert panel, including the following industry veterans:
- Scott Monty – CEO & founder, Scott Monty Strategies
- Nick King – Director of business intelligence & market research, AutoTrader UK
- Ian MacDonald – Director of consumer marketing & experience, autoTRADER.ca
- Kevin Coombs – Director of marketing intelligence, TRADER Corporation
For more information or to register for the event, click here.
The top three most-appraised vehicles Canadian dealers saw last month were, you guessed it, trucks.
To be more specific, they were light-duty trucks, and you probably won’t be surprised which ones they are, because they’re the usual suspects: Ford F-150, GMC Sierra 1500 and Ram 1500.
That’s according to Dealertrack’s monthly Tradetracker report for the month of January. The top five weren’t all trucks, though; those three goliaths were followed up by the Toyota Corolla and the Dodge Grand Caravan, respectively, to round out the top five most-appraised vehicles, overall, by Canadian dealers last month.
Broken down by domestic and import dealer, the results of January’s Tradetracker report are more of the same. The domestic vehicle most appraised by domestic and import dealers? The F-150. The import vehicle most appraised by import dealers? The Corolla. And the import vehicle most appraised by domestic dealers is Mazda’s Mazda3.
From the other side, the vehicles most looked at by trade-in owners boils down to just two vehicles, regardless of dealer type: the F-150 (domestic) and the Toyota RAV4 (import).
The Tradetracker brand of the month for January, Honda, experienced a bit different vehicle interest last month. Canadian Honda dealers’ most-appraised vehicles last month were the Corolla, Hyundai Elantra and Grand Caravan, respectively. From the other end, the vehicles most looked at by trade-in shoppers at Honda store last month were the Honda CR-V and the Civic.
