LOS ANGELES -- Cherie Watters says it took her less than a month to convert a former used-car consignment center in Torrance, Calif., into a Hyundai store -- and she did it for about $300,000, including renovations, signs and the initial property lease.
In this era of multimillion-dollar dealership overhauls, that's pretty good. And the investment is paying off. After three months in business, South Bay Hyundai is selling about 100 new vehicles per month, and the store is turning a profit.
"We didn't cut corners or cheap out," says Watters, the store's general manager. "We just tried to be as efficient as possible,"
And the timing was right. Hyundai appears to have acquired some California cool, and the dealership has benefited.
South Bay Hyundai is a hodgepodge of buildings that house service, parts and used-car sales departments in an old commercial district. By making creative use of what was on the property, Watters quickly opened a point in an area of Los Angeles that has been without a Hyundai dealership for five years.
"I bought nice tile and I bought nice paint, but I didn't have to go crazy," says Watters, 49. "I was able to work with local businesspeople who were happy to provide me with deals."
Hyundai needed an outlet in Torrance, home for the U.S. sales arms of Honda and Toyota. Through April, the brand's sales in greater Los Angeles more than doubled compared with the first four months of last year, to a little more than 8,600 units, says James Stewart, Hyundai's sales manager for California.
"It's a very important point because the South Bay is a huge corridor," Stewart says. "We've had a lot of units in operation where we've had customers that need service."
Watters, also general manager of Puente Hills Hyundai, about an hour's drive inland in Industry, Calif., wanted to capitalize on Hyundai's momentum. So in early 2010 she persuaded Puente Hills Hyundai owner Sam Lim to open a store in the South Bay area, home to working-class neighborhoods and affluent beach communities.
It had been less than a year since the Puente Hills store opened, so Hyundai executives were surprised when Watters already applied for another franchise.
"They said, 'What, are you kidding?'" Watters recalled.
Hyundai granted approval for the second point about a year ago. Then came the hard part: finding a site. Watters says four deals fell through during the nine-month search for a home.
"We were getting down to the wire for locating a facility to open up our store, or we would have lost our letter of intent," she says. "There was always somebody that was one step ahead of us. We were down to the last month."
As a last-ditch effort, Lim sent one of his assistants to find a spot the old-fashioned way: by knocking on doors. Doing so led Watters and Lim to the store's current site, occupied at the time by Gulliver Car Connection, a used-car sales and consignment company.
"They jumped at the opportunity to get out," Watters says.
After the lease was signed on Jan. 1, crews began gutting the showroom and updating the building with new floor tiling, signs and fixtures that met Hyundai's requirements. About 10 vehicle lifts were installed in service bays that had gone unused for years.
All told, it took 25 days to get the dealership ready. That meant sales staff assembling office furniture delivered the day of the Jan. 28 grand opening, Watters says.
"I just had a whole bunch of guys show up on January 3 and work until it was done," she says.
Watters had a history with Hyundai. After working for two years in Hyundai stores in Los Angeles, Watters connected with former Minnesota megadealer Denny Hecker in 2008, agreeing to manage three Hyundai dealerships Hecker planned in Los Angeles.
"Hyundai was interested in him coming to L.A. in a big way," she says. "He was supposed to open up three points, and I was going to work for him as his general manager."
But her stint at LAX Hyundai, which began in 2008, came to a screeching halt by the spring of 2009, when Hecker's empire started to crumble. In February, the bankrupt dealer was sentenced to 10 years in prison after being convicted of conspiracy and bankruptcy fraud.
"It sort went from being like Christmas, straight down," Watters says.
But Hyundai executives noticed Watters. She says corporate officials introduced her to Lim, who owned the real estate in Puente Hills, where a Nissan store had gone under, and who needed a new franchise for the location. Hyundai wasn't the most popular brand in Los Angeles, but Watters knew what the Korean company had in the pipeline.
"When I first connected with Sam Lim, the Genesis was available, the Genesis Coupe had just come out, and the Equus was on the planning board," she says. "That's why I encouraged him that Hyundai was a good way to go."
Watters and Lim opened Puente Hills Hyundai in the summer of 2009, just as cash for clunkers was launched. Watters recalls selling every car she got in her initial allocation. Lim delegated day-to-day operations to Watters, and she quickly had the idea to open another store.