Things have calmed down now, but almost immediately after Minnesota car dealers Paul and Andrew Walser bought Wichita’s Luxury Collection in September, Paul Walser looked into potentially selling a few brands within the dealership.
“I’ve got more of a worrier sort of personality than my brother does,” Paul Walser says. “I’m more like, gosh, this looks … scary right now.”
The dealership includes Acura, Audi, BMW, Jaguar, Land Rover, Lexus, Mini, Porsche and Mercedes-Benz brands.
In November, Paul Walser began exploring selling the Porsche division. He also briefly considered selling the dealership’s Jaguar-Land Rover store, though he wasn’t as serious about it. He decided against selling anything.
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“Ultimately, I concluded that that was a mistake.”
Walser says that would have been a “short-sighted, quick solution to a very challenging environment.”
Still, he says he and his brother had taken on a “monumental” task.
“There was much more to do than what we had originally envisioned,” he says.
In addition to having a number of new stores and changing the corporation’s sales and marketing philosophies, the brothers had commitments carried over from previous ownership to build new stores for BMW, Acura and Porsche at its headquarters near 13th and Greenwich in addition to the five buildings it already has.
All three of those brands were still at a site at Kellogg and Greenwich that’s mired in road construction headaches.
“And you’re in a different state that you never operated in before,” Paul Walser says.
Altogether, he says, “That was daunting to me.”
Walser says he briefly contemplated: “What if we didn’t build any more buildings?”
If he had sold Porsche and Jaguar and Land Rover, Walser says, he could have moved the Acura store to the Jaguar-Land Rover building and not worried about building one for Porsche.
He says he also negotiated with Porsche to temporarily move the dealership from Kellogg and Greenwich to his Jaguar and Land Rover store at 13th and Greenwich to help increase sales.
“The old campus is just really a difficult place to do business right now,” he says.
Initial conversations with Porsche “were not favorable.”
Walser says Porsche representatives were concerned about moving in with Jaguar and Land Rover and “find themselves never getting out of there.”
Finally, “everybody got comfortable,” he says.
“That was a significant concession,” Walser says. “That has really relaxed me a lot on this thing.”
He says Jaguar and Land Rover “were wonderful about it,” and there’s now a “kind of cozy” Porsche area within their store.
Walser says another concern was that there wasn’t enough volume potentially to support a Porsche store or the Jaguar-Land Rover store.
“The numbers that the manufacturer says you should sell were fairly small numbers.”
Porsche says planning potential was 80 cars a year for the old site and 120 for the new one. Jaguar-Land Rover expectation is 200 a year.
“Boy,” Walser says he thought, “that doesn’t seem like a lot of cars.”
He says he spoke with Porsche dealers nationally who explained that Porsche is more of a boutique brand than volume brand.
“This is a different game,” Walser says he learned. “You just need to know how to play it.”
Boutique brands need more event-driven marketing than broad marketing, he says.
“There’s a very, very targeted audience for these products.”
He says Melody Matulewic is now general manager for the brands he considered selling. Walser says she used to handle marketing and events for the dealership.
“So she gets this stuff and she knows these people.”
Walser says that makes him more comfortable moving forward.
Also, he says Porsche, Jaguar and Land Rover have “a tremendous amount of new product coming. … They have a lot of money invested in the future.”
“I’m now more comfortable with out ability to be successful with them.”
Porsche will remain at the Jaguar-Land Rover store until its new building is ready next year. Construction on the 12,800-square-foot building will start in the next 60 to 90 days.
Construction on the 20,000-square-foot Acura store will start shortly after that. Construction on the approximately 30,000-square-foot BMW store is ongoing. That building will be ready in May. When BMW moves, Mini will move into the building from its temporary space near 13th and Greenwich, and Acura will move into the temporary space until its building is ready.
Walser says he now doesn’t plan to sell anything except more cars.
“A lot of those worries now have been laid to rest as progress has been made,” he says. “We are on a nice steady rise.”
Walser says September was one of the dealership’s best months ever, and October broke sales records.
“November was better still, so we broke the record again.”
He says the same happened in December, though January is not on the same pace, which he says is typical for this time of year.
An influx of used cars at the dealership is a big reason behind the jump in sales.
“The used-car thing is easier to turn the spigot on, if you will,” Walser says.
As of a week ago, the dealership had close to 300 used cars on its campus, which used to have more like 50 or 60 at any time.
Used-car sales from September through December totaled 847 compared with 677 in the same period last year.
New-car sales were 482 from September to December this year and 491 for the same time last year.
New-car sales are part of the dealership’s growth, Walser says, though he says the spigot isn’t flowing in quite the same way – yet.
“That’s a little longer of a journey.”