STORE GOES FROM "PITS" TO PINNACLE

500's lone VW dealer a San Jose `brand' In the first full year of the new Beetle, a 30-year Volkswagen dealer who started out with the "old" Beetle has scored a Ward's Dealer Business 500 first.

As the only VW dealer on the Top 500 for 1999, Bob Lewis Volkswagen amassed $86.1 million in gross sales, surpassing all other VW dealers and finishing in 340th place.

That record performance, achieved in the "capital" of the Silicon Valley electronics industry, San Jose, CA, is enabling Bob Lewis VW to build a new dealership next door in the Capitol Expressway Auto Mall after adding a second VW store in the Fremont-Newark, CA area on south San Francisco Bay.

"Everything just clicked for us and still is," exclaims Steven Lewis, 40, founder Bob Lewis's son, a dealership principal who holds a law degree and once thought of becoming an accountant.

He explains, "The dealership world was just so much more exciting a challenge for me. When I joined my dad's dealership in 1990, Volkswagen was really in the pits.

"We determined to climb out of it and, sensing that the Valley was poised for a big boom, to grow and become the No. 1 seller of Volkswagens in the U.S."

Bob Lewis, 64, had owned stores in San Diego and up the coast in Santa Cruz, CA, before taking over a 30-car-a-month VW point on San Jose's old First Street auto row, with only 30 employees.

"We decided that the way to achieve leadership was to become aggressive," recalls Steve. "My dad cringed at the budget we adopted for advertising and flooring cars, but I persuaded him that having plenty of vehicles in stock was the only way to keep moving forward.

"That strategy worked, in large measure because the factory in Wolfsburg kept its promises to build the best-value cars in its segments - Passat, Jetta, Golf, New Beetle.

"Plus, we hired and kept the best employees in the San Jose market, now 120 people in all. As sales grew and we finally became the No. 1 VW dealer in new-unit sales in 1995, we jumped into the Internet through www.boblewis.com with five dedicated online salesmen. As a result, we get repeat buyers as far away as Oakland and Sacramento."

Bob Lewis last year sold 2,909 VWs and 444 Suzukis, plus 36 Tiger Sharks. The Suzuki franchise will be joined by Hyundai in the present location when the new exclusive VW store opens next year.

"We haven't been No. 1 in new-unit sales every year since '95," says Steve.

But he says exchanging the top position with Jim Ellis VW in Atlanta and Santa Monica VW in Santa Monica, CA, "has kept our juices flowing."

Helping Bob Lewis VW top the $86 million mark in total dollars earned last year were nearly $3.7 million in parts sales, almost $3 million in service and $2.6 million in F&I.

"We don't scrimp on employees, and that helps boost volume because no one gets overloaded or burned out," says Steve. "Our 18 service stalls are worked by 22 technicians, and there are five F&I persons in two separate offices. Here it's a Bob Lewis family and a Bob Lewis brand."

Steve Lewis expects the Internet to become a "great tool" for sales, reaching up to 75% of linkage to new and pre-owned traffic.

"That's been happening already, since our first half this year topped '99 in new-unit sales," he reported. "The Internet doesn't replace salespersons, but makes their job easier."

The only thing that could affect Bob Lewis's upward growth in the gross revenue department, says the founder's son, is a decision in 1997 to "make money per unit sales. That may cost us the overall sales lead but we'll be No. 1 in margins, which isn't bad either."