Luxury car showrooms become airy, upscale places

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Brands strive for a look as distinctive as their vehicle designs

BY BRUCE CONSTANTINEAU, VANCOUVER SUN

VANCOUVER - The new Vancouver Audi dealership on Burrard Street features a 15,000-sq.-ft. showroom spread over two levels linked by a lengthy escalator.

It's an image that invariably draws comparisons to a downtown retail shopping experience.

"A lot of people just want to come in and look around and go up the escalator," said dealership general manager Joe Korab. "They almost always say: 'Wow! It's just like Holt Renfrew.' I've probably heard that 50 times already."

The $17-million facility, which opened last month, is one of many new upscale car showrooms popping up throughout Metro Vancouver as Canadian auto sales posted an all-time record last year and luxury-branded vehicles continue to grow in popularity.

The largest Mercedes-Benz dealership in Western Canada opened on Terminal Avenue two months ago, next to a Porsche facility that opened last summer, and Acura plans to open a new dealership across the street from Porsche later this year.

They all have their own distinctive look, as manufacturers want their showrooms to be as unique as their car designs.

Mercedes-Benz touts its "Autohaus" design concept, featuring extensive use of glass to create a bright, open feeling of transparency. The new Terminal Avenue facility features nine-metre-high ceilings, more than 32,000 sq. ft. of showroom space for new and used cars and green-hued lighting that shows off vehicle lines.

Audi's "terminal" design includes a simulated road that stretches across a curved showroom wall like a pretend Autobahn. Korab said most of the furniture in the new Vancouver showroom comes from Austria and had to be approved by Audi AG in Germany.

"The epoxy track on the wall comes from Germany and we had to fly in a team from Germany to apply it because you can't get it anywhere in North America," he said.

While manufacturers are meticulous about maintaining their own particular luxury car showroom look, many offer the same customer-friendly services designed to make potential buyers feel as comfortable as possible.

Valet parking is a common theme, along with lounges, coffee bars, big-screen TVs and concierges who greet customers when they walk in.

Mark Dube, general manager of the Mercedes-Benz dealership on Terminal Avenue, noted the number of luxury car buyers has expanded recently as manufacturers drop entry-level price points to attract a wider audience. The price for a new Mercedes CLA 250, for example, starts at about $34,000.

"We want to make sure that all these different customers get a level of service they may not have experienced anywhere else," Dube said. "They can come in and just wander around but they're not going to feel like we're avoiding them. Sometimes when you walk into a luxury shop, you feel like people don't want to talk to you."

Dilawri Group regional director Christian Dubois estimates his company - Canada's largest auto group - has invested more than $120 million in B.C. since entering the provincial market six years ago, much of it in the luxury car segment.

Dilawri has nine dealerships representing 13 car brands in B.C., including Acura, Aston Martin, Bentley, Jaguar, Mercedes-Benz and Porsche.

Dubois said the luxury car market has clearly strengthened in recent years, with manufacturers trying to make their products more affordable to attract younger, longer-term customers.

He said aging baby boomers and recent immigrants represent a significant portion of the luxury car market but carmakers want to reach beyond those segments.

"Fifty per cent of buyers are repeat buyers," Dubois said. "Manufacturers realize that if you only target an older demographic, that demographic eventually disappears."

He said all retailers want attractive selling spaces now and that same trend has carried over into the auto sector.

"It's the second-largest purchase most people will make in their lifetime and in the luxury segment, the showrooms have to match people's lifestyles," Dubois said. "That's why we have luxurious, airy spaces."

Canadians bought an all-time record of 1.743 million new vehicles last year, finally eclipsing the record of 1.703 million sales set in 2002.

Auto industry analyst Dennis DesRosiers said luxury car sales account for about seven or eight per cent of the total Canadian market but predicts that figure will be closer to 10 per cent by 2020, with annual luxury vehicle sales approaching 250,000 units.

"Baby boomers are retiring and many are treating themselves to a luxury vehicle," he said. "Most of their debt is paid, the kids are gone and they have a fair amount of wealth. Luxury brands are also pricing their offerings to attract a broader market and this is all happening in a generally positive economy with a lot of wealth out west. It all adds up to record luxury sales."

DesRosiers noted that even with that solid growth expected in the Canadian high-end car market, it still pales in comparison with the U.S. market - where luxury car sales account for 18 per cent of the total market.

He said access to capital has become a real concern for dealer groups across Canada as the average amount of commercial capital required for a typical dealership has risen to $10 million from $6 million in 2005. Commercial capital includes the funds required to cover land and building costs and vehicle financing costs.

"You can double that ($10 million) cost in dealerships in urban markets and for those in premium luxury brands, you can probably triple it," DesRosiers said.

New Car Dealers Association of B.C. president Blair Qualey said luxury car dealerships have reached out beyond the city of Vancouver in recent years, noting Langley has attracted brands such as BMW, Mercedes, Acura, Audi and Infiniti, with more on the way.

"Five years ago, who would have thought Langley would have one of the largest Mercedes stores in Western Canada," he said. "Obviously those luxury brands are moving there because there are lots of potential buyers there."

Luxury car sales in B.C. for 2013 (compared with 2012 sales)

Brand 2013 sales change from 2012

Acura 2,599 up 20.7 per cent

Audi 2,719 up 11.7 per cent

BMW 5,829 down 0.3 per cent

Infiniti 973 up 13.1 per cent

Jaguar 195 up 80.6 per cent

Land Rover 1,183 up 23.9 per cent

Lexus 2,060 down 6.8 per cent

Mercedes-Benz 5,492 up 2.9 per cent

Porsche 569 up 19.8 per cent

Source: DesRosiers Automotive Reports

Source: Vancouver Sun

Photograph by: Ric Ernst, VANCOUVER SUN

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