Unusual Dealership Pairing

GRAND RAPIDS, MI – Dealer John M. Leese heads an unusual dualing – a Cadillac store (one of the nation’s oldest) and a Lexus dealership.

That’s a rare combination of luxury-brand rivals. But he’s made it work here in this western Michigan city.

Harvey Cadillac dates to 1901. Leese is the fourth owner of the 106-year-old store. Ward’s interviewed him at Harvey Lexus next door.

Ward’s: How did you come to own Harvey Cadillac?

Leese: I started working here at the age of 18 as a janitor, sweeper, porter; you name it. I was enrolled at Northwood Institute in Midland, MI, and was doing my on-the-job training here for owner Harvey Duthler. I married Harvey’s daughter, Mary, went into sales and worked my way up to the principal’s office when he retired. Harvey’s 81 now but still drops by every day to see how things are going.

Ward’s: Your store is on one of the busiest auto-row streets. How did this strip develop?

Leese: The first dealers clustered in downtown Grand Rapids, as in most cities. It is Michigan’s second-largest city. When 28th Street was opened for business development, most of us moved there over the years. It’s the second busiest street in Michigan, out-trafficked only by Telegraph Road in the Detroit metro market. It’s better for dealers to be near each other.

Ward’s: When did Harvey Duthler decide to diversify his brands, and with what?

John Leese: “Never dreamed Lexus would become Cadillac’s big rival.”

Leese: We had three Saturn stores, all in southwestern Michigan. After we took on Hummer and built a dedicated building next door to Harvey Lexus, we decided to sell the Saturn stores lest we become too stretched out. The buyer was Dave Fischer’s group based in Detroit.

Ward’s: How did Lexus come to a Cadillac store?

Leese: Our Lexus store opened next to Harvey Cadillac in 1990. Toyota realized in creating the Lexus franchise that it needed premium-brand dealers with high customer-service ratings. We had the highest reputation in western Michigan, were doing very well with Cadillac and never dreamed, frankly, that Lexus would become Cadillac’s big rival. (Note: Neither did General Motors.)

Ward’s: Were there any problems as Lexus grew and grew?

Leese: Not many Cadillac stores got Lexus as a dual brand. (Three others are Sewell in Dallas; Potamkin in New York City; and Betts in Des Moines, IA.) GM wrote Lexus off as a weak competitor with only two models at first, a gussied-up Camry (the ES 300) and the LS 400 V-8. How could that pair threaten the “standard of the world”?

Ward’s: Is there any cross-shopping between the two luxury brands?

Leese: Sure, what with Cadillac getting smart with the CTS sports sedan, SLR roadster and Escalade SUV. I’m not sure Cadillac would be going out of the DeVille, DTS, STS track, were it not for Lexus, Infiniti, Acura and Audi going fuller line.

Ward’s: Who got Cadillac out of the DeVille rut?

Leese: No question, it was John Smith who, when he became Cadillac general manager, made it known that Cadillac needed younger buyers or it would be going down the drain, too.

Ward’s: Was there a particular Lexus model that forced Cadillac to go after the youth market?

Leese: Absolutely. The RX 300 (cross/utility vehicle), which came out in 1998.

Ward’s: How are your new-vehicle sales?

Leese: Lexus sales have grown to about 500 units a year, from 300 a few years ago, nearly as many as Cadillac. In a city of about 198,000 people, that’s pretty good.

Ward’s: Are there too many dealers?

Leese: With Lexus, the whole nation has only 221 dealerships. Cadillac has a dealership, dualed with other GM brands in almost every market with a population of about 25,000 or more. That dates back for years and years.

As president of the Grand Rapids Auto Dealers Assn., and head of the oldest continuous Cadillac store in this state, I know all the other Cadillac dealers. None of them wants to quit, and they’re protected by the state franchise law. In Grand Rapids alone, there are four Chevrolet and four Ford dealers. More competition is good for the public but can be tough for so many dealers.

Ward’s: What new models would you like from Lexus and Cadillac?

Leese: Supercars. We already have one from Lexus, the $120,000 LS 600 h hybrid sedan, of which we’ve sold two since August. Cadillac is working on a supersedan, based on the “Sixteen” concept, but with a V-8 engine.