Life was pretty good a decade ago at Covington Pike Toyota in Memphis, recalls General Manager Kent Ritchey. The store sold every vehicle it could wring out of Toyota's Japanese factories.
But that was before the automaker opened its plant 400 miles away in Georgetown, Ky. Now, says Ritchey, life is real good.
Hot-selling Camrys that once spent weeks crossing the Pacific and another 10 days in transit from the Portland, Ore., docks now come by truck in one day from Georgetown. Better still, Ritchey can make changes to his vehicle orders up to 10 days before build, instead of a month for Japanese-sourced vehicles.
And his U.S.-built vehicles, including the Corollas and Tacomas assembled in California, are largely insulated from careening currency exchange rates that once had dealers adjusting prices like gas station attendants.
'We get more Camrys now than we've ever had, and we get them for less,' Ritchey says. With Toyota building another plant in nearby Indiana to assemble full-sized pickups, Ritchey is ecstatic.
Covington Pike is one of 6,685 dealerships selling one or more vehicles that come from American plants bearing foreign nameplates, according to the American International Automobile Dealers Association. Some of these dealers say it would be just fine if every vehicle on their lot came from a U.S. factory. In their eyes, the 'new American' automakers have provided benefits that include greater ordering flexibility, shortened delivery times and Americanized products that resonate better with customers.
And despite the belief that nationalism counts for something in the marketplace, dealers say vehicle origin is not the hot button it used to be. 'There are so many transplants with so many models, it's a global mishmash,' says Cincinnati Mercedes-Benz dealer Dana Hackney. 'The customer is looking for an appealing model, and if you deliver that, I'm not sure they care where it's from.'
Kent Peterson, a Honda, Mitsubishi and Nissan dealer in Odgen, Utah, says most of his customers do not even ask anymore. 'Unless you point out that there's a 1 or a J in the VIN, they don't know.'
All three of his 'import' franchises now obtain their biggest-volume vehicles from North American factories. Mitsubishi Motor Manufacturing U.S.A. turns out the Galant, Eclipse and Spyder convertible in Normal, Ill. Ohio's Honda of America Manufacturing Inc. provides the Accord and Civic, while Subaru-Isuzu Automotive Inc. in Lafayette, Ind., builds the Honda Passport. And Nissan Motor Manufacturing Corp. U.S.A. in Smyrna, Tenn., delivers the Sentra, Altima, 200SX and Frontier pickup.
But the increased capacity also has heightened the pressure on dealers to sell, particularly when vehicles are not in demand.
'It's a double-edged sword,' says Walter Huizenga, president of the AIADA.
'The good news is we've got (capacity for) 100,000 cars. The bad news is we have to sell them. And if they're unpopular, that can be tough,' he says.
It's a situation Big 3 dealers have lived with for decades. But fleet subsidies and customer incentives became a new experience for many import dealers in the early 1990s. Sales slowed at a time when their new factories were still rolling out plans for bigger production. At the moment, most of those factories are enjoying strong sales.
'When you've got a two-year waiting list for your product, it's pretty hard to complain,' says Donald Sears, president of Sears Imported Autos, a BMW and Mercedes-Benz store in Minnetonka, Minn.
Sales of the Alabama-built ML320 sport-utilities are humming, making Sears a big fan of the German automaker's new American factory. 'I don't see any downside to it.'
For Toyota, the largest international automaker on the continent, the most obvious advantage to dealers of investing $3.2 billion in Midwestern factories has been pumped-up sales across the nation, says Toyota spokesman James Olson.
For example, Toyota's car market share in its Cincinnati region, which includes Georgetown, climbed from 4.3 percent in 1988 to 8.5 percent last year. Nationwide, those figures were 6.4 percent and 10.5 percent respectively, Olson says. 'There's no doubt in my mind that having that plant there with its 7,000 jobs has increased our place at the table in that market,' he says.
And locating a factory close to its market has paid other dividends to dealers. They see future products earlier in their design cycle and can provide input on how to tailor them to American tastes, says Olson.
That has led to vehicles such as the six-passenger, column-shift Avalon, the seven-passenger walk-through Sienna minivan and the forthcoming V-8-powered, four-door T150 pickup, says dealer Ritchey.
BMW also wants dealers to see its assembly plant in Spartanburg County, S.C., as more than just a factory. 'It's a home where dealers and customers can go to feel the spirit of BMW,' says Vic Doolan, president of BMW of North America Inc.
Doolan sees an important role for the plant in the company's Retail 2000 plan, which aims to create more visceral experiences for BMW buyers. To that end, BMW is spending $12 million to add a training center, museum and test track near the factory for dealers and customers.