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Car dealers spruce up in hopes of sales gains

Upgrades draw mixed reviews

Bagel while you wait? At LaFontaine Cadillac in Michigan, that is possible, and it is among the perks car dealers are adopting. Bagel while you wait? At LaFontaine Cadillac in Michigan, that is possible, and it is among the perks car dealers are adopting. (Carlos Osorio/Associated Press)
By Tom Krisher
Associated Press / July 1, 2011

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DETROIT - Spending a Saturday afternoon at the typical car dealership is not exactly pampering yourself. Drab floors, battered furniture, weak coffee in a paper cup. And that’s before the salesman abandons you for half an hour to “check with my manager.’’

But Detroit automakers are finally stable after their brush with death, and most dealers can afford to spend a little money to spruce up the showroom. So they are adding leather chairs, rich oak walls, theatrical lighting - even hair salons.

The improvements can cost from $200,000 to $15 million. But dealers say it is worth it because people expect a more memorable, luxurious experience these days as they make one of the biggest purchases of their lives.

“If we don’t meet that expectation, we will not compete,’’ says Richard Bazzy, who plans to spend more than $1 million each to renovate his two Ford dealerships in the Pittsburgh suburbs, including brushed-aluminum exteriors and mahogany and maple furniture.

Whether it helps sales is up for debate in the industry. Nicer surroundings may draw people in, but they also raise costs and let dealers with shabbier buildings sell for less.

Bazzy says he will pay for the upgrades without help from Ford, but sometimes automakers will kick in. Some dealers have spent millions on their own, while others were forced to by automakers.

General Motors, Ford, and Chrysler have been trying for years to get dealers to spiff up, but they are pushing harder now. Honda and Toyota have similar programs. There are specifications for uniform signs, paint colors, and furniture as automakers try to make dealers look alike and create a unified image for their brands.

Dealerships that sell luxury cars have been one-upping each other for years, but the contest is moving into everyday brands. Some dealers say it is getting out of hand and the customer will wind up absorbing the additional cost.

“There’s a point here where I think it’s excessive,’’ says Gary Dilts, a former Chrysler sales chief who now runs a consulting business. “How much cappuccino are you willing to pay for?’’

But for others, upgrades are good business. Ryan LaFontaine, whose family-owned group spent $15 million two years ago to build a sparkling Cadillac-Buick-GMC dealer with a hair salon and restaurant, said he covers the costs by selling more cars than other dealers north of Detroit.

He ranked second in the nation last year in Buick and GMC sales.

“We’re getting customers into our building that maybe we wouldn’t have gotten an opportunity to talk to or wow,’’ he says.