Stalled sales unify Napa’s auto row dealers
Lianne Milton/Register
The days of hometown loyalty are gone when it comes to car buying. Napa residents make only about a quarter of new vehicle purchases in town, and it’s costing Napa’s auto row dealers — and the city’s budget — millions. |
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By KEVIN COURTNEY
Register Staff Writer
When a Napa car dealer scans the license plate frames in local parking lots, the sight is a depressing one. The vast majority of the frames promote dealers in other towns.
According to city statistics, Napa County residents are making only 27 percent of their new vehicle purchases from the Soscol Avenue’s auto row.
Customers were once a loyal bunch, forming a bond with local dealers that lasted a lifetime, said Ed Barwick, a Napa Chrysler dealer for 41 years.
Those days are no more, Barwick said. “The word ‘loyal’ doesn’t exist,” he said.
The city of Napa puts a price on that disloyalty. Locals have been buying 4,500 vehicles out of county each year, representing $127 million in lost sales.
If everyone bought locally, Napa would reap an extra $1.27 million in sales tax annually.
Even if out-of-county sales could be cut in half, the payoff for the financially pressed city would be huge. Napa could expand services to residents, instead of cutting them.
At the city’s suggestion, Napa’s six new-car dealers have begun to talk about how to cooperatively boost sales and improve conditions along Soscol.
Dealers concede they have their work cut out for them. Napa’s auto row was built in the 1950s and ’60s. Once a cutting edge concept, the auto row must now compete against the auto mall, a tighter congregation of dealerships springing up in nearby cities.
Too often, locals head to the auto mall first, not giving Napa dealers a chance to show their wares and negotiate on price, said Scott Jenson, president of Jenson Motor Center on Soscol.
The public’s perception that things are rosier at the auto mall is the biggest problem, said Bob Kleis, associate general manager at Jimmy Vasser Chevrolet-Toyota.
“The perception is they will get a better price out of town and it’s not true,” Kleis said.
Local dealers may not have the inventory of the biggest out-of-county dealerships, but they have more vehicles in stock than motorists can see from Soscol, said Kevin Massie, president of Napa Ford.
In most cases, a dealer can deliver a vehicle equipped to the customer’s specifications within a day or two, Massie said.
Dealers are discussing ways of branding Napa’s auto row the way dealers in other communities tout new auto malls. There is talk of street banners and a shared Web site for listing used vehicles.
City may ease up
While they look at new ways of marketing themselves, dealers said they also need the city’s help. The city’s sign ordinance is too restrictive, while street tree plantings often obscure motorists’ views of their car lots, they said.
“We’re not saying take down the trees. We just want them tuned up,” Jenson said.
“It’s a real touchy subject,” Kleis said. “Nobody wants to mess with the trees.”
Dealers said the city prohibits pole signs more than six feet tall. All the taller signs date from earlier times when regulations were not as restrictive.
Cassandra Walker, the city’s economic development manager, agreed that rules for auto signs may need modifying. The needs of a auto dealer are “fundamentally different from a Target,” she said.
The city has big plans to make Soscol a more prominent entrance to downtown, with new businesses and residences. To improve circulation and fix drainage problems, the city is creating a redevelopment project to pay for the work.
Walker said she asked for regular meetings with the car dealers after “everybody kept accusing us of wanting to move auto row,” which is “not correct.”
The city stands to benefit greatly if Napa dealers can move more cars, trucks and SUVs. For every vehicle sale made out of county, Napa loses $280 on average in sales tax.
“I’m not sure the city understood the number of vehicles not being purchased here until recently,” Kleis said. “It was an eye-opener to everyone.”
Mike Parness, Napa’s new city manager, said he was surprised that dealers are providing only 8 percent of the city’s sales tax revenue. Auto sales rank sixth as a source of sales tax, after general retail, transportation, restaurants, department stores and building materials. In many cities, auto sales rank second, he said.
“I need to learn about this market. What gives? What potential is there and what changes can be made,” Parness said.
Napa dealers cannot satisfy customers of certain makes and models. Napa County has no Mercedes, BMW, Porsche or Lexus franchises.
Except for Volvo, Cadillac and Lincoln, manufacturers of luxury brands prefer to sell from a limited number of Bay Area dealerships, Kleis said.
Both dealers and the city have talked about someday creating a new auto mall in Napa, but no firm proposals have emerged. An auto mall would require at least 20 acres, Walker said.
The ideal location, dealers say, would be at the junction of Highways 29/121 at the highway entrance to town, but this area is not in the city and is not zoned for commercial use.
A second-best alternative might be near the Napa County Airport, where Jamieson Canyon Road hits Highway 29, but this site is too close to Vallejo dealerships and would violate manufacturer siting standards, they said.
The airport zone is also in the county, which would reap the sales tax benefits of an auto mall located there.
A third-best location might be Highway 221, south of Napa State Hospital, dealers said.
Creating an auto mall would be a long-term proposition, dealers said. Many dealers own their buildings on Soscol, while others are in leases of various length.
It’s expensive to open a new dealership, Kleis said. Jimmy Vasser will be spending $6 million to build a new Toyota dealership on Soscol. It will be the first new dealership on Soscol in 30 years.
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