Editorial
Front Page - Friday, November 5, 2010
Local car dealers revved up about Volkswagen coming to town
David Laprad
Nelson Long, owner of local Mercedes Benz, Volvo and Hyundai dealerships, is expecting more business in the coming years as a result of Volkswagen opening a manufacturing plant in Chattanooga. Here, he poses with a few Hyundai Sonatas he hopes to move.
- David Laprad
When a new competitor moves into town, established businesses usually do a little sweating. One would think that would be the case with Volkswagen ramping up operations in Chattanooga. Conventional thinking would suggest the company’s presence would translate into big sales for the local VW dealership and diminishing returns for its rivals. But instead of perspiring, veteran car dealers are preparing for what they believe will be some of their best years in recent memory.
The last couple of years haven’t been kind to local car dealers, although most are reporting a decent 2010. James Vandermerwe, general manager of Jaguar, Land Rover and Porsche, says 2008 and 2009 were some of the toughest years his business has ever had, but that sales started picking up this year. Ken Hunt of Hunt Nissan says that while his dealership isn’t back up to 2007 levels, things have improved.
These two gentlemen and other Chattanooga car dealers are anticipating more lucrative days ahead, however, due to the cash that will pour into the community through VW’s payroll and the business it does with its suppliers. Nelson Long, owner of local Mercedes Benz, Volvo and Hyundai dealerships, points to the economic boon other nearby cities experienced when car manufacturers set up operations in their communities as evidence of what will happen in Chattanooga.
“Payroll is a wonderful thing. The billion-dollar plant Hyundai built in Montgomery has had a huge impact on that area, and I expect VW will do the same here. While the jobs at the plant will be great, the biggest benefit to Chattanooga will come through all of the ancillary employment; the shoe salesman, the restaurant owner and the Realtor will all be taking advantage of the additional payroll. There will be a huge ripple effect as people buy everything from blue jeans to new cars. And they’re going to buy all kinds of cars, not just VWs. We’re all ships on a rising tide,” he says.
Hunt is more succinct than Long, but no less positive. “I’m not worried about losing sales,” he says.
Vandermerwe shares both men’s optimism, but is concerned about people leaving town to purchase big-ticket items.
“A great number of people here believe they have to go to Atlanta to get a good deal, so instead of supporting a local business that will put its profits back into the community, they go south to get what they think is a better car for less money. What they actually get is an inferior product, such as a car with less equipment or a different model. I hope people will realize the best deals are on their doorstep,” he says.
To be ready for the rush, local car dealers are revamping their operations and stocking up on what they hope will be the next big thing. Long is rebuilding his Mercedes Benz dealership and installing a Volvo showroom. Hunt is excited about the Nissan Juke and the Leaf, an electric car for which Chattanooga will serve as a test market. And Vandermerwe is looking forward to moving a lot of Land Rovers, which he says is one of the top ten vehicles for professionals today due to its versatility, and entry level Porsches, which start in the upper $40,000 range.
“We hope to have a product for every pocketbook,” he says.
Consumers who will be unable to drop 40 grand on an entry-level sports car but will be able to spend some money on a used vehicle will have several options, including Herb Adcox Used Cars. The car sales veteran dropped his General Motors franchise in September after selling Chevrolets for 57 years and is concentrating solely on pre-owned vehicles. “The average cost of a new car is $30,000, which is too steep for a lot of people, so they’re buying quality used cars for half of that,” he says.
Adcox says he’s “as thrilled as the next guy” about VW coming to town, but says Chattanooga is fortunate in more ways than one.
“We’re No. 6 on the list of the best places in the country to do business. Our leaders in business and government have done an excellent job of working together to not only bring in new companies but also boost the ones that have been around a while. Thanks to them, we’re in better shape than other parts of the country.”
Vandermerwe also understands it took the effort of the entire community to attract VW, and says everyone stands to benefit.
“I want to thank all of the people who worked hard to bring Volkswagen to this area. It’s going to help our economy for years to come. If you look at what Mercedes Benz has done for Tuscaloosa, then you’ll see we’re all going to benefit. And hopefully, other manufacturers will follow.”
|
|