Dealing in Las Vegas

LAS VEGAS - How fast has this fast-paced town grown?

Ping-Lee DeRogatis, general manager of Desert Dodge on West Sahara, gives her own perspective of a city on a roll.

She says, "When I moved here in 1989, there were about 700,000 people living in Las Vegas. Now there are about 1.3 million.

"When I came to work at this dealership there was desert on all four sides of the building. Now this intersection is one of the most dangerous in the U.S. because of all the traffic and development."

That's a downside of progress. But in Las Vegas, there are plenty of up-sides. Among them: as one of America's fastest-growing cities with a strong economic heartbeat, it's a great place to sell cars; six days a week, 14 hours a day.

"The reason we have to open extended hours is that we have 24-hour shifts in this town," says Gary Ackerman, president of the Gaudin Automotive Group, which operates two Ford stores and will open a Jaguar-Porsche point in January. "Thirty percent of the working population in the hotel industry works from midnight until 8 in the morning."

Employment has increased from 217,408 to 609,685 workers from 1980-98. Personal income during that same period jumped from $5.2 billion to an estimated $30.3 billion.

Unemployment is a low 4.5%. "Indeed, pockets of labor shortages remain, further signaling the robustness of the current expansion," says R. Keith Schwer of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

Ms. DeRogatis says, "It's a year-round town. We don't go through the peaks and valleys other markets go through. It's exciting, a 24-hour town with lots of money and new casinos constantly going up."

The casinos and their hotels collectively are the city's largest employer. The gaming industry, in turn, has spawned thousands of other service and trade jobs.

"We get a lot of customers who work at the casinos," says Ms. DeRogatis. "But we also get a lot of service industry customers such as landscapers, pool installers and construction workers."

Las Vegas also has a high percentage of female car buyers. "Think about all the cocktail waitresses, bartenders and showgirls," says Mr. Ackerman. "These girls make $70,000 to $100,000 a year."

All that economic activity translates into car sales, says dealer Tim Cashman, a third-generation Las Vegan and owner of Cashman Cadillac.

He adds, "It's a vibrant economy as the fastest- growing community in the country. It's number one in new business start-ups."

It's also somewhat of an isolated market, he notes. There are dealerships in three mid-size towns 90-120 miles away. Otherwise, Las Vegas is it. That makes for a captive audience.

Mr. Cashman credits automakers for not over-dealering the city, although some new stores are in the cards.

For example, there are three Ford dealerships, soon to be four; and three Chevrolet dealerships, soon to be four.

"It would have been easy to over-dealer because of our rapid growth," says Mr. Cashman.

As of 1998, there were 90 dealerships in Nevada - and counting - with most in Las Vegas.

Those dealerships get a big slice of the action. For instance, Nevada's average sales of $40,924,000 per dealership topped the nation in 1997, says the NADA.

By comparison New York's average sales per dealership were $18,144,000 for the same period.

Nevada dealership employees share the wealth, too. Their average weekly earnings of $840 topped the nation in 1997, says the NADA. The average annual payroll per Nevada dealership was $3.45 million during the same period - again first of all the states..

Where's the Las Vegas market going?

"The sky is the limit," says Ms. DeRogatis. "You hear about peaks and valleys, but I haven't seen valleys here yet."

The Las Vegas population is expected to hit 2 million by 2006.

"There are a lot of roads here, and a lot of people driving on them," says Mr. Cashman.

But automotive retailing in Las Vegas is not a desert breeze.

Ms. DeRogatis says it's often hard finding talented sales people and prospective service technicians. That's a national problem too.

Mr. Cashman says more than a few Las Vegans are credit risks. "It kind of fits the nature of the community," he says.

Then there's a Las Vegas mentality that first threw Fred Hugelmann for a loop. He's a New Jersey native who moved to Las Vegas seven years ago. He's now Cashman Cadillac's general manager.

Mr. Hugelmann says, "It's a very demanding market. Hotels and casinos 'comp' rooms and meals as part of their marketing, and that creates a mind-set that's unique to Las Vegas.

"Don't get me wrong; we're not 'comping' cars. But we must deal with that mentality. This is the type of city where people believe if they ask for something, they have a 50% chance of getting it."

Consequently, many customers give it a shot and ask for rather outrageous things.

Mr. Hugelmann says it's not unusual for someone to ask to buy a car for $10,000 under the sticker price. Or ask for free service pickup and delivery of the car...forever.

"Or anything else you can imagine," says Mr. Hugelmann. "It's a pretty imaginative town."

- With Tim Keenan