Janesville car dealer ending year on high note
A Janesville car dealership is wrapping up an expansion and enjoying higher-than-expected revenues. Fagan Automotive acquired the Buick and GMC brands in January. Kyle Geissler reports. You can read more in Friday's Janesville Gazette.
JANESVILLE Owners of a Janesville auto dealership drove into 2010 with a plan to accelerate vehicle sales and service revenues by 10 percent.
They expect, however, to log a 35 percent increase.
Not bad for a business that’s been disrupted by extensive construction for the last six months.
“We’re very happy,” said Bob Clapper, vice president of Fagan Automotive, 3601 E. Milwaukee St.
Granted, Fagan’s growth in 2010 was fueled in large part by the January acquisition of the Buick and GMC brands from neighboring Rock County Buick Pontiac GMC.
The deal made Fagan the exclusive Janesville seller of GM vehicles and left Rock County to focus solely on the sales of Honda cars and trucks. That dealership is now known as Rock County Honda.
The acquisition forced Fagan to turn what was a planned remodeling into an extensive expansion. When work is complete later this month, the dealership will feature a new showroom, an indoor car delivery area and reconfigured offices.
In a project that’s expected to last three years, GM is requiring dealers to make renovations that are visually enticing to buyers and move them from the look and feel associated with “old GM” dealerships.
“It’s kind of the McDonald’s theory,” Clapper said. “They want stores that are easily recognizable.”
The renovation at Fagan, which has been selling cars since 1945 and in Janesville since 1975, includes a blue Chevy tower that serves as the entrance to that brand. Several feet away, a black and silver tower welcomes Buick and GMC buyers.
The twin towers are an added expense for Fagan, but they also are the result of a compromise that kept Fagan as the only GM dealership in Janesville.
“GM really wanted two dealers in Janesville,” Clapper said. “They felt a community of this size could support two.”
But given the local economy, Clapper was able to convince GM officials otherwise. He did agree, however, to the twin towers.
Fagan worked on the renovation with an architectural and design firm hired by GM. That ensures similarities from dealership to dealership.
“They are regulating things, although we do have some say,” Clapper said. “But things like floor tile, furniture, colors and branding items are all mandatory.”
Eventually, GM will help the dealerships pay for the renovations—that is, if they meet ambitious objectives tied to customer satisfaction, sales, employee training and remodeling to specifications.
The new showroom will double capacity from four to eight vehicles, which Clapper said is necessary to represent all four GM brands: Chevrolet, Cadillac, Buick and GMC.
The dealership also is tweaking its service and parts departments and plans to fill a couple of new sales positions early next year.
“We’re doing better than we expected,” Clapper said. “We’ve overshot our projections in sales and service, not by leaps and bounds, but we still overshot them.”
Clapper said the dealership expects to close out 2010 with 175 sales of Buicks and GMCs.
GM said Wednesday that its calendar year sales of Buicks are 53 percent ahead of those for the first 11 months of 2009. GMC sales are up 28 percent.
“That’s really all additional business for us,” Clapper said.
GM’s other two brands also have done well. Cadillac sales are up 38 percent, while Chevy deliveries increased 17 percent.
“The thing is that we’ll soon have this construction behind us,” he said. “All indications are that 2011 will be a stronger sales year than 2010.”
Clapper said the industry should close out 2010 with 12 million vehicles sold, up from the 10.5 million delivered in 2009.
Analysts expect dealers will move 13 million units next year.
“That’s steady growth, which is fine,” Clapper said. “We’ll take that.”