[10] Anderson Bmw In This Month Gossip

Carl Sewell is confident that he knows the Dallas-Fort Worth car buying market.

The 74-year-old just opened a 280,000-square-foot BMW dealership in Grapevine — his first with the German luxury vehicle maker and its largest in the state — and he plans to add an Audi dealership this November in McKinney.

Carl Sewell

If that timeline holds, the Audi McKinney store would be Sewell’s fourth new dealership in a year’s time. He opened an Audi location last November in Sugar Land in the Houston area and a Mercedes-Benz dealership in December in West Houston near Katy, adding to his portfolio of what is now 16 Texas dealerships.

Sewell’s bets come at a time when car sales are tapering off, following a strong climb back from the deep trough created by the 2008 recession. New car sales in the U.S. were reaching 17 million a year, then dropped to about 10 million during the financial crisis. Analysts expect new vehicle sales to total 17.1 million this year, down slightly from record-breaking years in 2015 and 2016. Sales soared to 17.46 million in 2016.

"2017 was always going to be a challenging year under any circumstance," said National Automobile Dealers Association chairman Mark Scarpelli, who co-owns two dealerships in Illinois. "Overall, consumer demand for new vehicles is still very strong."

That goes against the "doom and gloom" of Wall Street reports, which NADA chief economist Steven Szakaly said are "far, far overblown." He predicted sales would reach 16.8 million next year and continue along that trend until 2020.

Morgan Stanley revised its expectations for 2018 vehicle sales to 16.4 million, down from its previous estimate of 18.9 million, Bloomberg reported in June. The financial firm expects sales to slow to 15 million in 2019 and 2020.

Those trends don't worry Sewell, who said the growth of the Grapevine-Southlake market continues to drive demand for new vehicles. "That whole area is just growing unbelievably," he said.

He expects his dealership to sell between 150 and 200 new BMWs a month as early as 2018. U.S. dealerships averaged 965 new vehicle sales in 2016, according to consulting firm Urban Science.

“That’s why we built the dealership the size that it is,” Sewell said. He declined to say what that would translate to in revenue.

1/2Sewell BMW of Grapevine is the largest BMW dealership in Texas. Its two-story showroom showcases 35 of the latest BMW models. (David Woo/The Dallas Morning News)

2/2Sewell BMW of Grapevine checks in at 300,000 square feet. (David Woo/The Dallas Morning News)

The dealership is significantly larger than the guidelines advised by BMW's consultant, Urban Science, Sewell said. That's where his knowledge of North Texas came into play.

"I’ve been at this my whole life," he said. "I didn’t pay that much attention to their guidelines. I’m very comfortable that I understand the Dallas-Fort Worth market better than Urban Science."

So he opened Sewell BMW of Grapevine on the northwest corner of Texan Trail and East State Highway 114. Next door to the west sits one of his four Cadillac dealerships. To the north, his 10,000-square-foot pre-owned BMW lot is slated to open in September.

To the south, across the highway, is Jaguar Land Rover DFW, a dealership opened this month by Park Place Dealerships in a move to Grapevine from Plano. Park Place added Land Rover to the Jaguar brand with the move.

1/2Park Place Jaguar Land Rover DFW, across the street from the new Sewell BMW, opened July 1. (David Woo/The Dallas Morning News)

2/2Shoppers look for vehicles at Park Place Jaguar Land Rover DFW. (David Woo/The Dallas Morning News)

Sewell BMW general manager Klint Guerry estimated that 60 percent of the employees were internal Sewell transfers, and the rest were external hires. Collectively, Sewell BMW created about 100 news jobs, according to a company statement. Jaguar Land Rover DFW will have 70 employees, Park Place said.

Both dealerships are in good company off that stretch of road. Mercedes-Benz, Infiniti, Ford, Toyota, Audi, Chevrolet and Nissan are among the represented brands.

But unlike many of those, Sewell BMW doesn't have a wave of cars parked out front. In fact, there is no front lot, Guerry said. That was an intentional move to get potential buyers into the showroom, where 35 cars are displayed across two floors.

The facility has nine waiting lounges, two charging stations for electric vehicles and an on-site collision center. If it were an art gallery, the dealership's feature exhibit would be BMW's black matte electric i8, priced at $156,000.

1/2Dale Allen relaxes with his granddaughter, Ella Renken, 8, as her parents shop for a new BMW at Sewell BMW of Grapevine. (David Woo/The Dallas Morning News)

2/2The 2017 i8 is on display -- the featured attraction at Sewell BMW. (David Woo/The Dallas Morning News)

Among the employees are 15 sales associates and two "product geniuses," who help customers learn the features of their cars. This could include connecting a phone to Bluetooth, navigating the mapping software or figuring out how to adjust the sound system. Twice a month, the dealership plans to host technology clinics, for which customers would be separated into groups based on vehicle model, said Chris Anderson, Sewell's chief marketing officer.

That is just one example of an effort by dealers to attract customers looking for a complete luxury car-buying experience in the post-recession market.

Szakaly said he expects incentives to rise, but they will likely be concentrated in the sedan segment, which accounts for 37 percent of sales, though Americans' preferences are shifting away from compact cars in favor of light-duty trucks, SUVs and crossovers. But because production can take months to adjust, incentives help bridge the gap between inventories and demand.

The consumer move to larger utility vehicles is why BMW is investing $600 million in its Spartanburg, S.C., plant to crank up production of SUVs. Of the 440,000 SUVs the South Carolina plant will manufacture this year, BMW will export 70 percent of them, Sewell said.

For dealers, SUVs and trucks carry a heftier price tag. New vehicles now cost consumers $34,500 on average.

"There's a greater demand for utility," Scarpelli said."Transaction prices are reflective of this consumer movement."

Twitter: @tmcook23



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