Dealing with detours

The new cars are gone. The signs have been stripped away. What was Spokane Chrysler until a few weeks ago has become the Spokane Auto Center.

Owner Jay Lee said the sale of his Chrysler franchise to Dishman Dodge was voluntary, liberating, and a return to his roots in the car business.

He began his career in a double-wide trailer at a lot in Kirkland. With the loss of the Chrysler franchise he and a partner bought seven years ago, Lee said he and his employees are regrouping. They are transforming the lot at 6818 E. Sprague into a used car business that will also offer motorcycles, recreational vehicles, even boats.

Lee and his employees — the partner was bought out — are not alone in their search for life after franchise.

He was able to sell his Chrysler brand. The local owners of the Pontiac, Hummer and Saturn franchises did not have that option. General Motors, unable to update or offload those makes, shut them down.

Gee Automotive Companies Chief Executive Officer Ryan Gee said he too must rethink his business following the loss of Hummer and Pontiac, the brand his father, George Gee, founded the company on 27 years ago. Gee, at least, still has Porsche, GMC and Cadillac to anchor the Liberty Lake hub.

Downtown, the sign out front still says Saturn of Spokane, but owner Jeff Barton said the showroom will display only used cars until he can find another franchise fit for a prime location at one of Spokane’s busiest intersections, Second Avenue and Monroe Street.

Grandfather Ray Barton started selling Chevrolets and Oldsmobiles in 1926 in the brick building across Monroe. The family has ridden out several business cycles and Oldsmobile’s extinction in 2004, Barton said.

“We’ve been here a long time and we plan to continue to be here a long time,” he said.

Almost 1,500 new car dealerships across the United States closed last year, according to Detroit consultant Urban Science. Meanwhile, a trend toward dealer consolidation under corporate ownership continued.

In Spokane, Utah-based Larry H. Miller Auto Group purchased the Downtown Automotive Honda, Toyota and Lexus dealerships in July. AutoNation has owned the Appleway Group since the late 1990s. Lithia Motors Inc. purchased the Camp Chevrolet and Subaru operations in the 1990s, and Sutherland Motors’ Mercedes in 2003.

“That really changed the shape of the car business,” Lee said.

He is sentimental, not disappointed, regarding the sale of the Chrysler franchise. “I looked at it strictly as a business decision,” he said.

Lee does not have the Barton or Gee histories in Spokane. But the dealership has been in its present location for 30 years, and has established a reputation for service that earned Chrysler’s five-star quality rating, he said.

The follow-up calls to customers and other steps that help build loyalty will continue, he said. The dealership has retained its certified mechanics.

One, Greg Freter, modified a Big Dog motorcycle that has become the showroom’s chromed-out centerpiece.

What Spokane Auto Center did not have much of last week was autos. Lee said Tuesday he had just received financing that will trigger a buying spree to fill vacancies left by the Chryslers now parked at Dishman Dodge.

Even as Spokane Chrysler, Lee said, the dealership sold as many as 10 used cars for every new car sale. And the margins are better, he said.

Lee said the “sweet spot” in the Spokane used car market is the $8,000 to $15,000 price range, where the Audi A-4 Quattro, Chrysler 300 and Chevy Impala SS fronting Sprague are parked.

He plans a start-up inventory of between 40 and 50 vehicles, increasing to 70 or more as the economy recovers. Most will be purchased at auction, but some will be consignments, he said.

Lee said all the banks that provided buyer financing have agreed to continue doing so, and the dealership will also sell extended warranties.

The lack of credit last year was a huge roadblock for customers, Lee said. “It was hard for working people to get loans.”

The dealership’s sales volume in 2009 — 50 vehicles per month — was one-half that of 2003, he said.

Gee said that company’s sales have held steady in the last year, but instead of selling one used vehicle for every new one, the ratio has shifted to four used for every one new.

Although the fate of Hummer appeared to be sealed in February, when a proposed sale to a Chinese company was blocked by that government, Gee said it was not until the end of April that GM formally notified its dealers the brand would be scrapped. Thursday, Gee had one new Hummer left on the lot.

The company has not yet decided how to reconfigure its campus along Interstate 90, he said.

Noncommittal about the hand dealt dealers by GM, Gee said, “It’s the reality we face, and we’re just going to move on as best we can.”

Gee said used car prices are very strong thanks to a combination of manufacturing cutbacks, lower fleet sales and the almost 700,000 vehicles taken off the market by last year’s cash-for-clunkers program.

“We don’t look for a change in that anytime soon,” he said.

Gee said the company would be interested in a new brand, but manufacturers are already well-represented in the Spokane market.

Barton, who also owns Barton Jeep, agreed.

Saturn was a successful brand in Spokane, he said, adding that he has heard GM has second thoughts about its decision to stop production.

While awaiting another franchise opportunity, Barton will build its used car inventory and focus on service, detailing and collision repair.

“Every recession, it seems like we reinvent ourselves,” he said.