"A Car is not a Refrigerator"
http://www.acarisnotarefrigerator.com/A ... 060817.htm
Car "Dude" Evan
Issue 140 - 17 August 2006
Which Stores Will Ford Close in Los Angeles?
The lead article in the 14 August 2006 Automotive News is about Ford's plan to slash franchised dealers. Some of the markets targeted are Chicago, Boston, New York, Philadelphia, Los Angeles and San Francisco. Ford has lots of dealers. As of 1 January 2006, Ford had 3,777 dealers. Lincoln had 1,362 and Mercury had 1,968 for a total Ford domestic brand dealers of 7,106.
With Ford's market share dwindling with no major hit products ready to be in showrooms anytime soon, the need to shrink redundant dealerships is clear. Ford says it doesn't want its dealers competing against each other -- they want to compete with GM, Chrysler and Toyota. In the big picture, competing against GM and Chrysler isn't the problem, it's Toyota.
The pipeline for Ford doesn't look all that promising. The Ford Edge and its luxury twin the Lincoln MKX will be on sale by the end of the year. Both crossover SUVs are versions of new-to-market Mazda CX-7. Perhaps they will be a moderate "hit" like the Fusion; but even after combining sales of the Fusion and Edge, Ford still can't make up for the loss of the discontinued Taurus sedan and wagon.
The upcoming 2007 Lincoln Navigator should wear a mask to hide its shiny teeth. The poor truck looks like it has a full set of metal braces in front. The American Ford Focus gets a mild facelift next year, but the excellent European Focus is still missing from Ford's domestic offerings. It's really a shame.
The Escape will be all-new in later in 2007 as a 2008 model. Ford needs this little SUV to be as good as or better than a Toyota RAV4. If history forecasts these events, the Escape won't better the RAV4. The 2008 Ford F-series Super Duty pickup trucks will also get extensive changes to the interior and exterior.
We will have to wait for 2008 or later for a minivan alternative and a new F-150 pickup. Toyota will have at least two years to show Ford what it can do with the 2007 full-size Tundra, so Ford will have the same time to try and meet or beat Toyota on the engine, towing capacity, interior design and other pickup truck benchmarks.
In the meantime, Ford, Lincoln and Mercury dealers will be closing in Los Angeles. I can start by saying that although no list of targets has been released, I am absolutely 100% positive that Ford won't close Galpin Ford. I believe it is still the largest Ford dealer on the planet. Another dealer in the Midwest sells more trucks, but overall, Galpin beats them all.
With Galpin Ford/Lincoln/Mercury safe, let's look at the other dealers in my favorite Santa Monica to Silver Lake corridor (the original Pacific-Electric Railway Red Line):
In the center of the corridor, Ford is the only domestic brand to have a dealership in Beverly Hills. Beverly Hills Ford has been supplying the domestic staff fleet needs of the rich for many years. Of course, it also sells lots of Mustangs as gifts for the sixteen year old kids who really want the GT, Cobra, Shelby or SVT for their first car. I put Beverly Hills Ford on the safe list.
To the east, Midway Ford on Vermont, Hollywood Ford on Hollywood Blvd at Hillhurst, and Star Ford in Glendale serve similar geographic areas. As I see it, Midway serves the Korea Town, Central and South Central Los Angeles areas. I think Midway competes more with Crenshaw Ford (on Crenshaw) than it does the neighborhoods closer to Griffith Park.
It may be too much of a political hot potato to close either Midway or Crenshaw Ford because it will be seen as a racist act to take dealerships out of either of these areas. So I'm going to say that Midway and Crenshaw stay.
Hollywood Ford has always looked lost where is sits at the end of Hollywood Blvd where Hollywood merges into Sunset. Hollywood Ford used to run the Mazda franchise just west of its current location. The old Mazda dealer building is now a very odd-looking Good Will donation center and thrift shop. Hollywood Ford is alone in the area. It's not part of an area with other dealers.
I'd say that Hollywood Ford is on the list to be closed. It's also possible that Ford would rather relocate it. Why? Well, not too far west of this dealer, where the 101 goes underneath Hollywood Blvd, there is the first Toyota dealership in the U.S., Hollywood Toyota. Hollywood Toyota does a large volume because of its location, not because they have ever spent any money making the dealership look decent. But what most people forget is that right next to Hollywood Toyota, at 6000 Hollywood Blvd, is Hollywood Lincoln Mercury! I think that Ford will close the stand-alone Ford dealership and consolidate it Hollywood Lincoln Mercury. If Ford wants to compete with Toyota, this is its chance.
For the residents of Los Feliz, Silver Lake and Echo Park, the natural choice is to go just over the LA River to Star Ford in Glendale. Star Ford is on the south end of Brand Blvd in Glendale, so it's just a short drive over the Hyperion Bridge into Glendale for those residents. Brand Blvd is a street dedicated to car dealerships, so Ford needs a presence there. Perhaps Ford could get Star to upgrade the shabby-looking facilities.
To the west of Beverly Hills, Buerge Ford sits on Santa Monica Blvd not far from the Santa Monica City border. The location is good in that there is a Chrysler/Jeep dealer a block away and a pathetically small Chevy-Buick franchise hidden just a few blocks west on the north side of the street. However while this sounds good, not more than a couple miles away, on Santa Monica Blvd in Santa Monica is Santa Monica Ford, Lincoln and Mercury.
One of these two franchises has to go. The obvious pick for me would be to keep the Santa Monica dealer because of its location in the portion of Santa Monica Blvd in Santa Monica that is dedicated to car dealerships. The concentration of dealerships of all brands around SM Ford is key to keeping Ford in the minds of the customers. And because of the proximity of Buerge to SM Ford, I'd say that the stand-alone store, while located with the other outcast American brands, only serves to keep Ford from competing with Toyota, Honda, Nissan and the multitude of other brands represented in the Santa Monica auto strip.
Right now, the real estate that Buerge Ford sits on is worth more than the franchise. Ford should offer to buy out the franchise and the family owners can sell the land or develop it into something else.
Another option would to give the owners of Buerge Ford a different Ford-related franchise. Last I checked (which was this week), the Santa Monica Mazda dealer is gone. And the "other" Mazda dealer in Culver City (Nissan-Subaru-Mazda) is also gone. Right now, the closest Mazda dealers to the very lucrative Santa Monica-Beverly-Hills-Silver Lake corridor are: Star Mazda in Glendale, Galpin Mazda in North Hills and Alhambra Mazda! Mazda desperately needs a new Mazda store somewhere in town!
Hornburg Jaguar-Land Rover just built and moved into its new store on Santa Monica Blvd in Santa Monica. The Wilshire Blvd store in Santa Monica is closed. There is already a Volvo dealer in Santa Monica so the only Ford brand not represented in this lucrative area is Mazda. [There doesn't need to be an Aston- Martin dealer outside of Beverly Hills.]
In The Valley, Sunrise Ford in North Hollywood on Lankershim serves a large area close to Universal Studios and the Studio City Area. It's possible that Sunrise should stay just to service workers at Universal; however, Galpin already has such a huge studio truck/rental business that Galpin could easily swallow Sunrise. Just down Lankershim is the ancient Mayberry Lincoln-Mercury dealership. It's small and probably just sells Navigators to studio people and hybrid Mariners to the green crowd. If Ford keeps either location, it would be best to simply close Mayberry and consolidate all domestic brands with Sunrise Ford and rename the whole thing North Hollywood or Universal Ford, Lincoln and Mercury. I like the sound of Universal Ford.
The other Valley dealership is not in Van Nuys on Van Nuys Blvd. Rather it's Vista Ford in Woodland Hills, near the west-end of the Valley. I grew up in this neighborhood, so I know Vista has been around for a long time. It sits on Ventura Blvd in an area that supports several other car dealerships. Given that Ford has no other presence in the southern portions of the Valley; Vista Ford (which includes Vista Lincoln-Mercury next door) is a keeper.
Ford should, but doesn't have a presence on the Van Nuys auto strip. I'd bet that's because Galpin doesn't want any more competition. I'm sure Galpin wants Ford to close Sunrise and Mayberry. The better deal, in my opinion, is to simply do a forced consolidation in North Hollywood thereby eliminating one store location (as described above). The alternative would be to find a location on Van Nuys Blvd, close Sunrise and Mayberry in North Hollywood and put a new dealership in the middle Van Nuys auto strip.
To the south of Beverly Hills, there is the large Airport Marina dealer, South Bay Ford in Hawthorne, Don Kott Ford in Carson, Ford West in Bell Flower and Power Ford in Torrance. At least one of these has to go -- maybe more. I'd consolidate with South Bay with Power Ford (part of Auto Nation). Then Don Kott -- a huge dealership with a well-known local name -- could absorb the business of Ford West.
In Downtown LA, Sopp Ford, on South Alameda, is the only dealer in the area. Ford needs a presence downtown to compete with the Chevy, Honda, Nissan, Mercedes, Porsche and other downtown dealerships.
There are three compelling reasons to keep what would otherwise be a slam-dunk closer. First, Ford/Lincoln/Mercury needs a presence downtown to perform service for the thousands of office, municipal and professional workers that cluster there every work day. Second, Staples center and the surrounding developments mean that there will be much more activity and a real 24/7 population in the near future. Third, there are now thousands of "loft dwellers" who think it's hip and urban-chic to live in a live/work "loft" (loft = apartment/condo] in Downtown LA. This newer and growing population needs a place to have their armored cars and SUVs serviced.
Hey, Sopp Ford and other Downtown LA dealers may even make some new sales too; but the service business alone is reason for Ford to keep its presence in the currently run-down area on Alameda.
I'll leave the remaining areas like Pasadena, Montrose, Altadena, etc. to Alan as he is more familiar with them. It will be interesting to see where and how fast Ford makes its moves. At least Ford is onboard the reality wagon and recognizes that it has to shrink to its new size and place in the market.