Small Valley car dealerships remain in age of massive auto malls - East Valley Tribune: Business

Small Valley car dealerships remain in age of massive auto malls

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Posted: Sunday, June 12, 2011 4:00 am | Updated: 1:09 am, Mon Jun 20, 2011.

It is ironic that Berge Ford in Mesa is one of the dying breed of new-car dealers going it alone, because it hoped to do just the opposite when it moved to its current location.

The dealer, which has been open since 1944, set up shop at Mesa Drive and the Superstition Freeway anticipating other sellers to join it on a street named Auto Center Drive. But just one, Fiesta Lincoln-Mercury, moved nearby, as others gravitated to auto malls in such places as Tempe, Chandler and east Mesa.

“We thought we would be in the forefront of starting our own auto mall,” said Jim Crutcher, Berge Ford’s general manager. “But a lot of the dealers left Mesa. It never caught on here. We made the decision that we know what we’re doing, that’s all that really matters, so we’ll just do it on our own. It’s been good for us.”

As such giant chain stores as Walmart have helped put smaller shops out of business, and 24-screen, stadium-seating megatheaters were the end for many smaller cinemas, the era of auto malls has severely limited the presence of corner dealers. But a handful in the East Valley — Berge Ford, Chapman Chevrolet in Tempe, Brown & Brown Chevrolet in Mesa and Thorobred Chevrolet in Chandler are among them — are holding on.

“That fraternity is pretty small these days,” Crutcher said.

With auto manufacturers increasingly wanting dealers to locate in malls, and municipalities’ zoning space limited, it would be hard for a new dealer to operate outside of a mall, said Bobbi Sparrow, president of the Arizona Automobile Dealers Association. She added that dealers have grown to like the one-stop shopping atmosphere, providing customers the ability to quickly get from one lot to the other.

The dealers that have stayed on a corner are well-entrenched, she said.

“You have dealers who have been in existence for so long in the Valley,” Sparrow said. “Those dealerships that have wanted to stay in their areas have. They are really comfortable in the neighborhood they’re in, and they have loyal customer bases.”

Service and parts are a major portion of a dealer’s profits, and research by the National Automotive Dealers Association indicates that customers are most likely to buy a new vehicle from a dealer that they typically use for service. That kind of customer loyalty has been a big part of Berge’s success, Crutcher said.

“Most of our customers are past customers who heard about us through word of mouth,” Crutcher said. “Since we’re not in an auto mall that attracts hundreds of people per day, we have to rely on customers who are loyal to us.”

Dealers have found that moving to a mall is not worth the relocation expense and, in some cases, additional overhead.

Crutcher said that the close presence of a competitor — which could make it more challenging to close a sale on a hedging customer — is not a deterrent to joining an auto mall. He said that most customers arrive on a lot ready to buy.

“With the Internet, so many people do shopping before stepping foot on the premises,” Crutcher said. “They know what they want. In the old days, people went car shopping on Saturday and went to six or seven different places.”

Berge Ford has typically been one of Ford’s more successful dealers, but the economic downturn impacted the business. It has reduced staff by about 100 since 2006.

Still, “the dealer under the big flag,” as Crutcher calls it, plans to continue doing business solo.

“I’m about to go clean the men’s bathroom; everybody pitches in on everything here,” Crutcher said.

“If we were an average dealership, we would have to be in an auto mall to survive. But we don’t consider ourselves an average dealer.”

• Contact writer: (480) 898-6301 or dzeiger@evtrib.com

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