As borders fall, Kroymans just keeps growing

Dutch retail group pursues strategies to help its automaker partners

Neuss. Kroymans is expanding its sales network to the German capital.

"In Berlin, we'll take over a Ford dealership on October 15," said CEO Ton van Soest in an interview. And the company is not going to stop with this single-brand store.

"By the end of 2006, we'll build a multiple-brand Kroymans dealership in the Tempelhof area, right on the A100, one of the busiest roads in all Germany," he said.

The parcel covers 36,500 square meters, or about 395,000 square feet.

"We are building a beacon for Ford," said Johannes Cuerten, head of Kroymans' German operations. The investment is expected to be 15 million to 20 million euros, or about $18 million to $24 million at current exchange rates.

Besides Ford, the showpiece dealership is expected to house Volvo, Cadillac, Corvette and Hummer brands. Each brand's space can be reached through a neutral zone in the entry area, and the franchises have individual showrooms, as is usual in a Kroymans Mobility Center.

"With us, there is nothing that a customer can't find," said van Soest.

Given the size of the property, Cuerten plans for the first time to offer other dealers the chance to put up their own facilities at the site.

More brands, more traffic

"The more brands you have, the greater the attraction for the customer," said van Soest.

In Germany, most of the 14 Kroymans locations are multi-brand.

"We have very few single-franchise stores," Cuerten said.

They include the two Saab dealerships in Neuss and Hamburg that launched the Kroymans expansion two years ago. In addition, the Dutch firm acquired the Munich Volvo Center from Karl Theis GmbH on September 1, with about 100 employees in Munich, Munich-Riem, Fuerstenfeldbruck and Haag.

"For us, the new EU regulations for branches have paid off," Cuerten said. "We are more than happy with the multi-franchise concept."

But last year, the dealership chain had to book pre-income-tax losses of 1.5 million euros, or about $1.8 million, for Germany, where Kroymans employs a workforce of 260.

"But that matched our expectations and is associated with start-up losses for new activities," Cuerten said. "This year, we are going to boost our sales from about 3,600 new and used vehicles to more than 8,300."

One competing dealer said Kroymans "is investing right through the republic without a plan."

But Kroymans says the geographic distribution makes sense.

"We are a strategic partner with a few companies and we are acquiring locations where we can help out our system partners and minimize intra-brand competition," van Soest said.

Besides Ford with its Premier Automotive Group luxury brands (Aston Martin, Jaguar, Land Rover and Volvo), Kroymans mainly represents GM brands such as Saab. For Cadillac, Corvette, Chevrolet's U.S. models and Hummer, Kroymans is the general importer for all of Europe.

The Dutch firm represents the Maserati and Ferrari brands in isolated cases, but it is the exclusive importer for Alfa Romeo in The Netherlands and the German importer for Korean SUV specialist SsangYong.

"Just in the Benelux countries, we have 42 locations," said van Soest. "Less than half are single- brand operations."

Gross revenues for the group are expected to rise to 2.2 billion euros, or $2.6 billion, from 1.7 billion euros last year.

"By 2008, we are figuring on about 3 billion euros," van Soest said.

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