The nation's largest public dealership groups are snapping up high-line stores and pampering luxury customers in an effort to fatten profits.
AutoNation Inc., UnitedAuto Group Inc. and Group 1 Automotive Inc. have introduced concierge services that target luxury vehicle buyers. AutoNation offers its service through a Web site called LuxuryNation.com.
Group 1 is testing its concierge service in Houston, the company's headquarters. The service arranges test drives for customers, makes restaurant reservations and gets theater and concert tickets.
Many of the luxury dealerships owned by the public groups offer pickup and delivery and free loaners to service customers. Several stores feature spacious customer lounges with gourmet coffee bars and plasma-screen TVs.
The market for high-end auto brands is growing. Their dealerships generally offer better returns than do stores that sell volume makes.
The upscale segment consists of near-luxury, luxury, premium and ultrapremium brands of cars and light trucks. It accounted for 10.8 percent of the U.S. new-vehicle market in 2003, up from 9.2 percent in 2001.
Ken Gilman, CEO of Asbury Automotive Group Inc., says his public dealership group has targeted import and luxury dealerships for acquisition. "The strategy is pretty simple," Gilman says. "If you look at who has taken market share, who is profitable and who is likely to continue to develop product, the luxury and mainline imports are going to win."