New-car dealers here freshen up their facilities

Journal of Business, Apr 22, 2004 by Hesse, Jennifer

A number of Spokane-area new-car dealers have renovated their properties over the last few years and more such projects are in the works, spurred by requests from the automakers whose product lines the dealers carry.

The projects are part of a nation-wide push by carmakers to create brand identity, attract more customers to dealerships, and put them at ease once they do come.

Dealerships here have spent at least $4 million on facility improvements just in the last two years, and more are planning to remodel their facilities before long.

Though automakers aren't demanding the upgrades, they're encouraging dealers to remodel as part of national identity-forming strategies, says Greg Loberg, general manager of Jaremko Nissan Saab Inc.

"I think manufacturers are asking dealers to commit to the improvements and seeing more sales as a result of it," he says.

Jaremko Nissan Saab, at 6901 E. Sprague in Spokane Valley, recently spent $850,000 to construct a 6,600-square-foot building for its Saab operations. Next month, the dealership plans to start a project in which it will spend about $900,000 to demolish the showroom at its adjacent 6,600-square-foot Nissan building, construct a new showroom, and remodel its service department and business offices there. The project will add 1,300 square feet of space to the facility.

Jaremko demolished its former Saab building, located just east of the Nissan facility, last year, Loberg says. That building, which was built in the 1950s, last was remodeled about 12 years ago, and the Nissan building was built in 1978.

Loberg says that Jaremko decided to remodel its facilities last year, after the automakers; it represents presented dealers with different upgrade plans. Both Saab and Nissan have architects who design basic facility blueprints that can be modified based on location, he says.

Nissan has developed an updated image, called retail environment design, that aims to make customers feel comfortable, Loberg says.

"It gives them an upscale image that's more attractive to customers," he says.

In the design, the outside structure is predominantly red and silver, and uses metal cladding and glass to make the building took more modern, he says. The interior is open and spacious, and includes the latest furnishings such as a plasma TV. Jaremko's new Saab building has a fireplace in the showroom.

Other Spokane Valley dealerships have participated in the contemporary-design trend, including Dishman Dodge, which is located just east of Jaremko, at 7700 E. Sprague. Dishman recently completed construction of a $2.1 million, 14,500square-foot facility, which has an ovalshaped, glass showroom that's visible from Park, Sprague, and Appleway avenues.

Jaremko chose to remodel its facilities partly because of the manufacturers' suggestions, but also because it needed more space, Loberg says. With Saab soon introducing two products-a 9-2 wagon and a sport-utility vehicle-and Nissan producing full-size V-8 pickups and SUVs, more room was needed to accommodate the additional models, he says.

Though Jaremko is footing the bill for the construction and remodeling, Saab and Nissan offer financial incentives to complete those types of projects, Loberg says. Incentives vary from manufacturer to manufacturer, and may include grants, and low-interest or long-term loans, he says.

Dale Cornwell, co-owner of Becker Buick GMC Inc., says those financial incentives usually are small.

"They offer a little bit to entice you," he says.

He says he expects that Becker, located at 636 E. Sprague, will spend at least $350,000 to remodel the store's facade and showroom and about $250,000 possibly to add a quick-lube building there by the end of this year.

General Motors recently asked Becker to move or update its building, which was constructed in 1964, Cornwell says. Most automakers prefer for their vehicles be sold in high traffic areas, such as near malls and freeways, he says.

Cornwell says he and his partner, Gordon Kauffman, didn't want to move the dealership because its high-volume service department is easily accessible to customers at its current location. They agreed to remodel and begin selling Pontiacs at the dealership's main location and at its North Side lot, at 6623 N. Division.

With the additional make, Becker plans to ask the city to vacate sections of First Avenue and Sheridan Street just south and west of its main building to create room for about 75 more cars, Cornwell says.

That need for more space and the building's age, rather than General Motors' request, prompted the dealers' plans to expand and renovate, he says.

"I don't know how strong of a requirement it was-we felt we needed it anyway," he says. "It's time to make it look nicer and bring it into the 21st century."

Becker will delay the remodeling until the city approves the street-vacation requests and General Motors' architects visit the site and make design recommendations, Cornwell says. Exterior upgrades likely will include a large, blue facade with the automakers' logos, which are consistent with the designs of other General Motors' dealerships, he says.