Longo Toyota long on success

Longo Toyota on the San Bernadino Freeway in the Los Angeles suburb of El Monte has been among the nation's leading deal-erships since it moved to that location 13 years ago. What better way to celebrate being atop the Ward's Dealer Business 500 than spending $10 million over the next two years to revamp the entire facility.

"Hopefully in a year or so we'll re-launch a new Longo," says Greg Penske, president of Longo Toyota, the flagship of the five-store Penske Automotive Group. "We're redoing our whole facility. We just redid our service department. We're redoing the showroom. We've got about 14 different phases of what we're doing."

In 2000, Longo's revenues totaled $487.1 million, which put it at the summit of the Ward's 500 list. Expect that number to grow as the renovations continue.

"The key was we wanted to update it to where it should be today," says Mr. Penske, son of the renowned businessman, dealership entrepreneur and auto racer Roger Penske. "We opened Longo here on January 4, 1988, and it lasted until 2001. Now I think we have to continue to build up. It's a credit to the people who helped design it."

The Penske team's vision of the new Longo includes a service department in which the waiting lounge has a Starbucks coffee shop and an airport-like convenience shop. As in other dealerships, "guests," as Mr. Penske refers to his customers, will have work areas with Internet access and interactive computer kiosks with games for guests of any age.

"We've got a new Longo pit-stop area with the team in racing uniforms, which was a great idea from one of our techs," notes Mr. Penske who adds that oil changes are done in under 29 minutes or they're free.

These improvements should allow Longo Toyota to improve on its 2000 service department revenue of $14.6 million.

Longo already is improving on last year's 3,992 used-unit sales of $55.6 million with an addition of five acres, which gives the dealership the capacity to handle up to 500 used vehicles per month.

"We continue to see an upward curve of growth with the parts, service and body shop businesses, so that's what we're gearing up for," says Mr. Penske. He adds that in the future as manufacturers move closer to a build-to-order or locate-to-order system, dealers won't need as much space for on-hand inventory. So, he's using some of his lot space to expand the back shop.

Longo expects to improve on last year's $11.4 million in parts and accessories sales by revamping its retail parts center. It will be patterned after stores like Restoration Hardware and other retail outlets.

By tripling the square footage of his body shop, and implementing a new process that Toyota helped develop to get vehicles in and out faster, Mr. Pen-ske says body shop revenue should improve over the $10.5 million the dealership reported for 2000.

Longo also will have a AAA insurance center on site. While this alone isn't likely to improve the store's 2000 F&I income of $14.2 million, it will provide convenience for customers, which could lead to more sales and more loans, service contracts and the like.

Longo Toyota's true forte is in new-vehicle sales. The dealership delivered a total of 18,172 new units in 2000 - 14,333 cars and 3,839 trucks. Even more amazing is that 73 Toyota dealerships are in the LA market.

After its renovation, Mr. Penske hints that the new Longo showroom may have a bit of a Disney Store feel. It'll also be technologically advanced. Each salesperson will have a Palm Pilot with which they can access pricing and specifications of not only Toyota vehicles but of the competition as well. He says 8%-10% of business comes from the Internet, so it's important that the sales staff has access to the same information as customers.

Another initiative Longo uses to attract and keep customers is a business development center. Its staffers call customers starting more than a year before leases and loans are at the end of their terms.

Collectively, Longo personnel speak more than 30 languages, which attracts many citizens in multi-ethnic Los Angeles to the dealership. Says Mr. Penske, "We've focused on some niche markets with the different demographic makeup of our base market in Los Angeles. Those people like to do business in their native tongue, so it was important that we cover it.

"We've got good product and good people and I think that's a big part of our success. We're always trying new ideas and new things. The best thing is the competition is getting tougher. Manufacturers are requiring dealers to have better facilities, requiring better training for employees. That's going to continue to make our job even tougher to hold this spot.

"Tom Rundai, my general manager, and the rest of the team here have done a great job," he says. "I think we block and tackle very well. We look at ourselves kind of like a football team where everyday you go out and play. We do the fundamentals well."