Factory-owned dealerships are an anomaly in the United States.
There appear to be only five such outlets operated by the makers or importers for the long haul - three in Manhattan and two in California.
BMW, Mercedes-Benz and Ford Motor Co. operate the stores in Manhattan; Ferrari has stores in San Francisco and Beverly Hills.
Many other outlets are operated by the makers or importers on a temporary basis. A dealer gives up his franchise, but the maker wants uninterrupted representation in that area. So the factory steps in and operates the facility until an independent dealer can be found.
Factories have preferred to have individual entrepreneurs sell their products. The automakers tend to operate stores only in places where it is cost-prohibitive for a dealer to operate a facility, or where the factory wants to showcase a model store that it would like its dealers to replicate.
The Ferrari store in San Francisco is an example.
'San Francisco was to be the ultimate Ferrari dealership, so it was paramount that we do it and show dealers it could be done,' Gian Luigi Longinotti Buitoni, president of Ferrari North America Inc., told Automotive News last month.
Buitoni said the company took over the Beverly Hills store because the dealer wanted to sell and retire.
Ford, BMW and Mercedes operate stores in Manhattan because most dealers cannot afford real estate there.
General Motors does not have a factory-owned store in New York City, but the company has spent millions to help dealers either build or renovate stores there.
The cost to operate in Manhattan in enormous.
When billionaire entrepreneur Roger Penske purchased the New York City Cadillac point from megadealer Victor Potamkin in the late 1980s, he and GM spent $9 million to renovate the facility.
Mercedes spent $15 million to renovate its factory-owned store in 1983.
Dealer Carmelo Giuffre spent an estimated $7 million to open his Lexus store in Manhattan in September 1995. Factories aren't expected to increase the number of stores they own. Mercedes closed its factory-owned store in Hollywood at the end of 1995.
Robert Lutz, vice chairman of Chrysler Corp., recalls dealing with company stores in Germany when he was general sales manager of Opel.
He said company-owned dealerships served as an executive training ground, provided fast feedback on warranty problems and took a company very close to its customers.
'Those things did very well,' Lutz said. 'But they were a huge financial drain.'
Staff Reporter Ralph Kisiel contributed to this report.