Proving there is life after Pontiac, the Crown Automotive Group is leveling its 43-year-old dealership in St. Petersburg to make way for a $7.5 million Buick-GMC dealership
"I have many good memories there, but it's time to move on," said Dwayne Hawkins, 75-year-old chief executive and owner of Crown Automotive Group, a St. Petersburg-based collection of 30 new car dealerships in three states with about $500 million in sales in 2010.
The new Buick-GMC store is just the start of an $11 million rebuilding of three Crown dealerships that stretch across the 5300 block of 34th Street N. The work includes a new and expanded Crown Hyundai and remodeled Crown Nissan. All three are scheduled for completion in a year.
Why the current confidence to build new dealerships?
Today, GMC is touted as an upscale truck and SUV choice over Chevrolet. Buick is on a comeback trajectory as an entry-level luxury brand, and Korean Hyundai is the fastest-growing import nameplate.
"We see them each poised for growth. After rebounding in 2009, our business is running 10 percent ahead this year," said Hawkins who sees "no recession once we get out of this blip" caused by gas prices and congressional debt ceiling deadlock.
The layout of the new Crown dealerships mirrors industry trends to enhance overall profits by maximizing the ties between sales and service.
In general, car dealers get more than half of their revenue from new car sales, but just a fifth of the profits. In contrast, the service department brings in just an eighth of total revenue, but half of the overall profits.
To link the promise of good service to a hassle-free buying experience, service waiting areas that once were in separate buildings now share the white porcelain showroom floor and come equipped with club chairs, WiFi and free soft drinks. Nissan even wants a view of the service bay from the showroom.
"Some people thought the Internet would end brick-and-mortar dealers, but people still want to smell the leather, kick the tires and take a test drive," Hawkins said. "The big change is the transparency of the transaction. It used to start with picking up a brochure at a dealer. Today, people do their homework online, know the prices and serial numbers before they ever get here."
Hawkins is wistful about losing the circular facade of the Crown Pontiac store and its eye-catching carving around a roof line that symbolized the "crown jewel" of dealerships. The name was chosen by the wife of Doug Willey, a onetime Pontiac division sales head who taught Hawkins the ropes at his dealership in Birmingham, Ala., then made him his partner in St. Petersburg at age 33.
In the muscle-car glory days before the 1970s oil embargoes, Hawkins moved thousands of gas-guzzling GTOs, Grand Prix and Bonnevilles. Then came his "hail sale" in the early 1980s to unload a lot full of 250 new cars with smashed windshields courtesy of a freak storm. Or the 300 Fiats he rustled up and unloaded when the Italian carmaker last pulled out of the U.S. market.
"We sold more Fiats after they left than when they were here," he mused.
Hawkins' decision to diversify, first into small cars like Nissan and Honda, when Detroit insisted on sticking with gas hogs, served him well when the U.S. auto sales market cratered three decades later in 2008. His multiple brands eased the fall when U.S. car sales plunged from a peak of 17.4 million in 2005 to about 10.5 million in 2009.
"Our worst year ever," he said. It meant belt tightening, a 2 percent staff reduction and the demise of the Pontiac brand in General Motors' bankruptcy.
He had plenty of company. On just one 50-mile stretch of the U.S. 19 auto dealer alley from the Sunshine Skyway to Hudson, auto industry upheaval shuttered 15 onetime new car dealer showrooms that now house used vehicles, trucks or motorcycles, franchised auto repair shops or unrelated products like furniture. Several 5-acre dealerships remain abandoned. Hillsborough County is worse.
Hawkins, who predicted total U.S. sales would rise to 16 million by 2015, already acquired one troubled dealership. He figures he's on the leading edge of more brand switching and showroom overhauls around the Tampa Bay area.
"I hopes this spreads around the neighborhood," he said.
Mark Albright can be reached at email@example.com or (727) 893-8252.