Openroad dealership GMs talk new stores, bigger location, used cars & more

Written By: Joe Overby (Auto Remarketing Canada – July 28, 2016)

 

BURNABY and LANGLEY, B.C. – 

It has been a busy year on the expansion front for OpenRoad Auto Group, an 18-store group covering 15 franchises in British Columbia.

After opening Jaguar Land Rover Langley in December, OpenRoad and Jaguar Land Rover Canada held a grand opening for the all-new dealership in March.

In June, OpenRoad and Audi Canada held a grand opening for OpenRoad Audi Boundary’s new location, after the store moved into the new facility in May.  The store is located in Burnaby, B.C.

Additionally, the group announced in May it had officially opened OpenRoad Volkswagen in Burnaby, a brand-new dealership with a private grand opening scheduled for Aug. 13.

Auto Remarketing Canada reached out to the general managers at each of those stores to talk used cars, early success stories, new facilities and more.

Jaguar Land Rover Langley

In the first half year or so of operations, GM Daniel Russman has been pleased with the early momentum that Jaguar Land Rover Langley has picked up.

“We didn’t really foresee this sort of success right off the bat, and month after month we’re exceeding every single target put out for us,” Russman said in a phone interview. “And in terms of staff, starting with a brand new dealership and hiring all brand new staff, it’s really remarkable to see how well everybody is finding their role, finding their niche and really exceeding at what they’re doing.”

When asked about the biggest challenge in the used-car market, Russman said that it’s often tough to find quality pre-owned cars.

The most optimal plan of attack, he said, is to source cars through the store’s own dealer network and through customers that come in the front door (and selling those customers new rides, too).

As far as how used-car sales have fared for the new dealership, Russman said there were hurdles in sourcing vehicles at first, but after a few months the store was able to utilize its resources, ultimately generating strong used-car sales, he said.

OpenRoad Audi Boundary

With a brand new facility comes a lot more breathing room for this Burnaby dealership.

In May, OpenRoad Audi Boundary moved into this four-story, 113,000-square-foot facility, which is adjacent to the old facility where it operated for more than a decade.

It includes an indoor showroom, and as general manager Brad Beckett pointed out, the 12-car drive-through.

“In Vancouver, we deal with rain,” he said in a phone interview, comparting the climate to Seattle’s. “Whenever we get a chance to get our customers in and out of the rain, (that is) great.”

The store has the capacity to park 270 cars in the building, which includes the new-car and used-car displays plus the storage space.

“A customer comes in and they can see every color of a Q5 — once again, inside, out of the rain (and) in a beautiful environment,” Beckett said. “So that’s allowed us to pick up some nice increases in our sales.”

Has also noticed more enthusiasm and greater morale among employees.

“Being in a store that was way too small, there was a stress that came with that. None of our staff could park on the lot, including myself,” he said.

With the new store, they’re able to park on the lot, have their own desk and work in a “beautiful environment,” he said.

“And they’re just so much happier, so much more relaxed, which I think allows them to give the customers a better experience,” Beckett said.  

What’s more, the old location could only hold about 15 used vehicles on the lot, which hamstrung some of their marketing on those cars. In response, the store has been ramping up its online presence the past year-and-a-half. 

The new facility has a much higher used-car capacity, and the dealership is developing a photo booth at the store, as well.

“We see our used-car department as one of our biggest growth opportunities. We’re really excited about what we’re going to be able to do,” Beckett said. “We’re going to be able to have a standalone used-car staff.

“We’re going to be able to have a set of professionally built in-store photo booths, so we can take the highest quality pictures. We’re going to be able to have, probably, close to 50 cars inside for people to come and see.”

The challenge with all that is finding the right inventory for this new-found used-car capacity.

In the Vancouver area, most folks can get into Washington state in an hour or less, so the U.S.-Canadian rate plays a big role, Beckett said, particularly when the Canadian dollar is as soft as it has been in the past year amid oil price drops.  

“It’s a two-sided story. We’re getting a lot more money for our wholesale pieces, but also, we’re finding it much harder to keep inventory here,” Beckett said. “Because, obviously, people that are selling either privately or selling (through) other means are getting good value for their used cars and then they’re going across the line, in a great demand.”

Also, given the brand strength of Audi, a lot of owners are holding on to those cars longer, Beckett said.

He said the store sells roughly 35 used cars each month, but the aim is to move it to 50 or 60 — which of course will require brining in additional higher-quality used units each month.

So, how do they adapt to find more used cars? There is a three-part strategy, Beckett said.

First, OpenRoad Audi Boundary needs to “have a much more critical eye to our wholesale,” he said.

“Really, really ask those tough questions when we decide to wholesale a piece,” Beckett said. “Secondly, I think we need to be much more aggressive on our lease-end customers: trying to get them out of the car early, using some of the great programs that Audi has to be much more aggressive on our portfolio and push those cars. And really, look at your portfolio as, ‘what cars do you want on your used-car lot,’ not ‘what used cars you want to sell.’ And then really target those customers.”

Additionally, he also said the dealership needs to step up its efforts in terms of scouring sites where consumers sell cars privately.

And when an appraisal is being done, Beckett wants to have two managers working on it to provide another set of eyes.

OpenRoad Volkswagen

We asked Ben Lovie, the general manager of this 45,000-square-foot facility, what some of the early success stories were for OpenRoad VW.

“Guests have embraced our modern Westcoast VW experience. The bright, airy facility with all the modern dealership amenities was all carefully planned out and now operating in the space for the past two months, it does seem to have been designed very well,” Lovie said in an emailed Q&A.

“Our flexible dealer approach is also resonating with car buyers. Extended test drives, special programs from newcomers to Canada, iPads for guests to use in the showroom, free use of our car rooftop boxes and bike racks are some things we are doing different,” he said.

“I am very proud of the team here. There is a positive vibe in the store — and what may seem like a crazy thought — but I get a sense our team really enjoys coming to work. This positive vibe obviously rubs off on our guests.”

Lovie also shared a bit about the used-car sales for the brand new store.

“As you can expect, it’s going take a while to get our inventory levels up and be in a position to buy in cars at competitive prices,” he said. “In the early stages, we are focusing on processes around appraisals, reconditioning and online and on-the-lot merchandising — there is always room for improvement in our processes before we get too focused on volume and turn.”  

 

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