Dave Wilson had the Lexus franchise. Then he got primo land in tony Newport Beach, Calif., just six miles from one of his existing Lexus stores. Price: $30 million.
Then he started building. A palm tree. A $500,000 fountain. 300,000 square feet.
Final tally: $75 million.
This stunning cost of building a new dealership is probably a record. But wait, there's more. Dealership experts say it's the wave of the future. Other dealers will be putting up Taj Mahals in upscale neighborhoods to serve those wealthier baby boomers who can't seem to get enough Lexuses, Mercedes-Benzes and BMWs.
The West Coast megadealer expects someday to sell an eye-popping 400 new and used vehicles a month at the new Lexus emporium, about what he sells now at his two other Lexus stores combined.
"Nothing could eclipse that $75 million," says Phil Vogel, owner of a San Francisco company that handles dealership acquisitions. "Not even in Manhattan."
Wilson, who owns 15 other dealerships in California and Arizona, opened Newport Lexus on June 29. He says the Lexus brand and the dealership's location justify the outlay. Newport Beach is one of the nation's richest communities. The store sits on what Wilson calls "the most important corner in Orange County."
"The Lexus market is so big we would not have anything else" on the site, Wilson told Automotive News. "We should sell 300 to 400 new and used Lexus vehicles a month," once the dealership is fully ramped up. "It's a monument to Lexus."
The average U.S. Lexus dealership sold 130 new vehicles last month.