I originally was going to call this “The Shootout at the O.C. Corral.”
That’s because in California’s Orange County, a new $75 million Lexus dealership was built almost squarely across the street from Fletcher Jones Motorcars, the world’s top-selling Mercedes-Benz dealership and ranking No.2 on the Ward’s Dealer 500
To me, it initially looked like the battle of the luxury brands in ultra-rich Newport Beach, where the median household income is $83,455.
Turns out, the general feeling is there are more than enough premium car buyers to go around in that part of the world.
It makes for some awesome dealerships.
The new rich kid on the block is Newport Lexus, the most expensive dealership ever built.
It is part of the highly successful 15-store Wilson Automotive Group, named for founder David Wilson, a nice guy of humble beginnings; his father was a rodeo rider, his mother a Tupperware saleswoman, and his first home was an apartment above a dealership in Iowa.
Wilson found fortune in Southern California, and his new dealership is a 24-karat, 300,000-sq.-ft. (27,870-sq.-m) reflection of his success.
It is an amazing place to see, resembling a 5-star hotel. Inside are an Italian cafe, a fireplace, leather sofas and chairs, a boutique, a grand piano that plays by itself and plasma-screen TVs located throughout, including in the restrooms.
Outside is a fountain and a transplanted cluster of 150-year-old palm trees that cost $185,000.
The opulence is in keeping with the dealership’s surroundings, says Craig Whetter, vice president of the Wilson group.
“Newport Beach is off the chart as far as a high-end luxury market,” he says. “Customers are like guests in our homes, and they live in homes that look like this. This is their environment.”
The showroom attracts the most attention, but Whetter talks most enthusiastically about the service department.
There is a 7-lane service drive for speedy intake. Cars go up a ramp and to a third-floor facility with 77 bays and 103 lifts. The bays are pre-stocked with parts for the 18 most common service orders, such as 15,000-mile (24,140-km) and 30,000-mile (48,280-km) maintenance inspections.
“If we can turn the serviced car around in 90 minutes and keep the customer comfortable here, that’s one less loaner to send out,” says Whetter. “It’s an environment you almost look forward to rather than feeling like, ‘Gosh, I’ve got to take my car in for service.’”
Not coincidentally, Wilson started his dealership career as a mechanic.
His new dealership is projected to sell about 4,000 new vehicles a year vs. the 6,000 that Fletcher Jones Motorcars delivers annually. Whetter says there is no thought of stealing customers from Fletcher Jones.
“They’re not even in our sights,” he says. “Ted Jones (dealer principal Fletcher Jones II) is a great guy and a great friend of ours.”
Garth Blumenthal, general manager at Fletcher Jones, says the new neighbor hasn’t hurt sales.
“Since they opened, we’ve actually done better,” he says. “Maybe they are bringing in more traffic to the area, which is good for us and them. Our numbers continue to grow. If we stick to our business plan, we’ll do well, as will they.”
Blumenthal says neither store can focus just on Newport Beach as a sole customer base. “One-third of our clients come from outside Orange County, places like Riverside and Los Angeles Counties. We have 1,300 vehicles on the ground and try to make our dealership a destination and an experience.”
Also nearby is the nation’s largest-volumedealership, Crevier BMW, where a 5-story parking deck was just installed to accommodate inventory and customers’ vehicles.
“There’s room for everybody,” says auto analyst George Peterson, president of AutoPacific. “Nowhere in the U.S. will you find such a concentration of Lexus, Mercedes andowners.”
He notes that along the Pacific Coast Highway in Newport Beach, several former yacht dealerships have been converted into exotic car dealerships selling Lamborghinis, Ferraris and Porsches.
The first customer to buy a vehicle at Newport Lexus was Benjamin Franklin, a well-to-do local, not a founding father.
“We were holding the corporate grand opening, and he stopped in to see what all the commotion was about,” says Lexus Group Vice President Bob Carter. “He pulled out his checkbook and, on an impulse buy, took delivery of an RX 300 for his wife.”
Selling cars on easy street can be real easy.