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Despite tough times, Galpin profits by pimping rides

GAS' Beau Boeckmann: "People who can afford it still want what they want."
LOS ANGELES — While auto sales slump, Galpin Auto Sports' customization business is thriving.

A division of Galpin Motors Inc., Galpin Auto Sports tricks out thousands of cars and trucks each year for the parent company's seven dealerships in the Los Angeles area.

The business adds as much as $500,000 in monthly revenue, said Beau Boeckmann, 38, president of Galpin Auto Sports and vice president of Galpin Motors.

"Times are tough right now," Boeckmann told Automotive News, "but the people who can afford it still want what they want."

Galpin Auto Sports jobs, featured on the MTV cable network's reality show "Pimp My Ride," range from a set of wheels with huge chrome spokes to a hot tub in a pickup bed.

The business has created its own marketing brand — a Galpin Auto Sports-customized vehicle is said to have been "Galpinized."

Other dealerships may not have tuner shops to match the Galpin Auto Sports showroom, down the block from Galpin's giant Ford dealership in the San Fernando Valley. But Boeckmann said customization offers a profit opportunity for franchised dealerships of varying sizes.

It's a GAS
Prices charged by Galpin Auto Sports for customization services
Wheels$100 to $2,500 per wheel
Grille$400 to $7,500
Navigation system$1,200 to $2,500
Custom-designed leather seats$1,500 and up
Hot tub in pickup bed$30,000
Source: Galpin Auto Sports  

'Going to grow'

Last year, U.S. customers bought $38.1 billion worth of auto accessories, the Specialty Equipment Manufacturers Association reports. Between 1996 and 2006, the market grew by an average of 7 percent a year, said SEMA spokesman Peter MacGillivray.

Franchised dealerships have just a tiny fraction of the customization market, MacGillivray said. But when dealerships start promoting customization extensively, he said, "our business is going to grow exponentially."

Galpin Auto Sports customizes about 500 vehicles a month, Boeckmann said. About 350 are at customers' requests; the rest are projects Galpin Auto Sports tackles to show off its abilities. Most of the cars and trucks Galpin Auto Sports customizes come from Galpin dealerships.

Boeckmann said Galpin Auto Sports customers often end up buying new vehicles from Galpin dealerships. "That was part of the reason for bringing other makes and models to GAS," he said.

The cost of Galpinization varies widely. The owner of a small car might spend $1,200 for an audio system. An entertainment system and new wheels for an SUV can cost as much as $10,000. Customizing a corporate promotional vehicle with, say, a living room and a bar could run $100,000.

And while profit margins on factory parts used for customization are about 20 percent, Boeckmann said, margins on nonfactory parts are as high as 50 percent.

"I have a grille over at GAS that has a bigger margin than many of the cars we're selling," Boeckmann said.

Factory ties

Galpin's Ford dealership in North Hills, Calif., is one of the world's largest. When Ford Motor Co. last year formed a dealer panel focused on customization, Boeckmann was a charter member, said Al Giombetti, executive director of Ford's customer service division.

Panel members such as Boeckmann "push us to be more aggressive, especially in body kits." Giombetti said. "They push us to get into technology such as electronics and wheels."

This year, Ford launched a line of customized accessories it sells at dealerships and online.

At Galpin Auto Sports, wheels are the most frequently customized part, Boeckmann said, and the Ford Mustang is the most customized vehicle. "You can probably configure a Mustang in a million ways," he said.

Galpin Motors, a customization pioneer, has been in the business since the 1950s. The company formed Galpin Auto Sports in 2006 to boost its margins by buying specialty parts directly from suppliers.

While the rewards of customization to dealerships are great, Boeckmann said, so are the risks of the "extremely complicated" business. Dealerships must find reliable vendors and experienced employees, he said.

But Boeckman said all dealerships can offer at least simple customizations, such as wheels, tires, body kits and stereo upgrades.

"It is what customers want these days," Boeckmann said. "And when customers want something, they are willing to pay more for it than when they need it." 

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