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Ben Sullivan, COO of Balise Motor Sales, says pick-up truck sales, especially those involving small trucks, have been moving steadily higher in recent years.

As Pick-ups Evolve and Offer Consumers More, Sales Spiral

While most of the focus in the auto-sales market has been on the meteoric rise of the SUV, pick-up truck sales have also been climbing, and for the same reasons. Like SUVs, the trucks now offer many of the features and amenities of a car — from leather seats to solid gas mileage.

Ben Sullivan notes that while SUVs and cars seem to be making all the news these days — the former because of how well they’re selling, and the latter because how they’re not selling — there is that third segment of the market that is making a lot of noise in its own right; trucks.
This is not a recent phenomenon, noted Sullivan, chief operating officer for Balise Motor Sales, adding that truck sales have been solid for some time and especially since the end of the recession and during the recent, and prolonged period of relatively low gas prices. But the number of truck sales continues to be move higher, and for several reasons, one in particular.

“What we’ve seen over the past decade is a significant investment by the manufacturers in not only styling, but ride comfort, quietness, electronics, safety equipment, and especially fuel economy,” said Sullivan. “To the point where they’ve made the pick-up truck probably the primary choice for people; they can drive it to the country club on the weekend and to a work site during the week. It gives people a lot of flexibility.”

He noted that while the sales of mid-sized, half-ton trucks (think Ford 150, Chevy Silverado, and Dodge Ram, the three most popular sellers, and in that order) have been relatively flat, there is considerable movement in the smaller-truck market, featuring brands like the Toyota Tacoma, Ford Ranger, and Chevy Colorado.

He called this development a “resurgence,” because small trucks were popular in the ’80s, then things cooled off considerably, and now, they’re picking up again (pun intended), and in rather dramatic fashion.

“For years, the small-pick-up-truck market fell dormant behind the explosive growth of the half-ton-pick-up-truck market,” he explained. “Been there’s been a real resurgence in the small pick-up.”

But while the smaller trucks are selling, there is solid movement across the board, especially when there are incentives available.
Indeed, Jeff Sarat, owner of Sarat Ford Lincoln in Agawam, said he normally sells about 20 to 25 super-duty trucks — that would be the F-250 through F-550 and up — each July. Last month, he sold 54, more than a 100% increase.

Jeff Sarat says pick-ups now offer almost everything cars and SUVs do, including solid gas mileage.

“Ford came out with some really aggressive programs — 0% for 72 months – so they created a market, which was phenomenal for business,” he said. “I had multiple customers buy more than one, because businesses — and that’s really who’s buying those type of trucks — they haven’t had that deal for three years.”

The response was quick, too, he added, as Ford didn’t even start the promotion until mid-July. “My guys just got on the phone and started calling people: “hey, we can lower your payment 100 bucks and put you in a brand-new truck.’ And people were flocking in. It was awesome.”
Ford agrees, extending what was supposed to be a two-week promotion through Labor Day, creating worries that Sarat might actually run out of trucks before the October-through-December season, which is traditionally a good time for truck sales — he usually sells about 100 super-duties over those three months — as businesses make year-end purchases for tax purposes.

Looking ahead, those we spoke with said truck sales, like SUVs, will continue to move higher at the expense of the car, because, again like SUVs, the product continues to evolve, improve, and provide more of what consumers are demanding.

Work in Progress

Sullivan recently relocated to Western Mass. from Texas, specifically the Dallas area. The Lone Star State is known for many things — from oil to cattle to Friday night football — but it might just be the pick-up truck capital of the world.

“They really like their pick-ups in Texas,” he said with a smile, noting that while nationally, one auto purchase in five is a pick-up, in Texas, it’s at least one in four. And in keeping with the state’s character, bigger — and better-appointed — is better.

“You’re not a gentleman cowboy unless you’re driving an F-250, which is a diesel engine, with King Ranch leather interior,” he said referring to the expensive brand of leather from that ranch in Texas. “And that thing is probably an $80,000 truck by the time everything is said and done.”
Western Massachusetts, and the Northeast as a whole, is a long way from Texas, geographically and also with regard to the popularity of pick-ups, but this region is gaining some ground in that regard, if you will, and numbers supplied by Sullivan bear this out.

He said that since the start of the year in Massachusetts, Connecticut, and Rhode Island, roughly 300,000 vehicles have been sold. Of those, 31,000 would be considered mid-sized, half-ton trucks; 20,000 are larger work trucks, and 13,000 are smaller, quarter-ton trucks, leaving a total of 54,000 pickups sold to date, not quite 20% of the total volume of vehicles.

And, as noted, while the biggest surge has been with the smaller trucks, sales are steady across the board, thanks to a still-solid economy that is fueling sales to consumers and businesses alike, and especially the former.

“Those guys are having good years, and they’re adding people,” said Sarat, referring to the builders, contractors, landscapers, and others that rely on larger trucks and work them hard. “When the economy is up, it’s good for everybody, and that especially helps us because we specialize in trucks.”

And the numbers are only expected to climb higher for those reasons cited earlier by those we spoke with. Where once people had to sacrifice things like comfort, luxury, room, technological bells and whistles, and especially gas mileage when they bought a pickup, now, they don’t have to.

Indeed, Sarat used the Ford F-150 to get his points home. This model remains popular among non-commercial drivers, although some businesses use them in their fleets as well. ‘I drive one,” Sarat said. “If you have a family of five, you can all hop in it and go somewhere — and put something in the bed if you need to.”

And, as noted, the trucks are becoming more car-like in terms of comfort and features which each passing model year.

“Every year, the technology gets better, and the safety features get better,” Sarat said. “I have an app on my phone that I can use to start my truck anywhere in the world. If a check-engine light goes on, from that app on my phone, I can see, ‘OK it’s an oxygen sensor, I’ve got to get it in for service,’ or maybe it’s nothing major, and it’s on because this is something I can fix.”

Safety features like self-parking and anti-collision assist are common in today’s trucks as well, and self-driving vehicles aren’t far away, he added. Plug-in hybrid options are creeping into the truck market as well, for people who crave fuel efficiency – or just want to use less fossil fuels. Even traditional, gas-powered trucks are being built with fuel economy in mind.

“I just drove to Ohio last week with my son, 580 miles. And I got out there on one tank of gas,” he said. “My fuel economy was better than I’ve ever had in any truck. Once I got out there, I still had about 100 miles left. That, to me, was impressive.”

Whether it’s efficiency, safety, or other technology, “it’s slowly getting better,” Sarat said. “It’s ever-changing. They’re definitely not stagnant, that’s for sure.”

Sullivan agreed, adding that all these amenities obviously come with a cost, but it is one that consumers seem ready and willing to pay.

“Manufacturers still have to make the affordable work trucks,” he explained, adding that there’s a work-truck grade, a grade above that, and maybe a few above that. “But by the time you’re done with the leather interiors, the technology and the touch-screen displays, the heated and cooled leather seats, you can drive the price of those trucks up quite a bit.”

By that he meant north of $60,000 or $70,000 — and even higher if one wants a fully loaded F-150 King Ranch. And what’s interesting, he noted, is that the manufacturers haven’t yet determined just what the ceiling is for these vehicles in terms of luxury and appointments — and what people might be willing to pay for all that.

“What the manufacturers have been playing with at the top is … ‘how much truck is too much so that no one will buy it?’” he told BusinessWest. “I don’t think they’ve found that yet.”

The Ride Stuff

While Texas and the rest of the pick-up-truck buying world awaits an answer to that question, dealers here and seemingly everywhere continue to record healthy sales of the vehicles.

It’s a movement that seems destined to continue and probably accelerate, because today’s trucks are not yesterday’s trucks.
As Sarat noted, they are anything but stagnant. They are moving — in every sense of that word.

George O’Brien can be reached at
[email protected]

Autos

Peter Vecchiarelli, left, and Tom Parsons say that building relationships is the key to success when it comes to commercial truck sales.

Nutmeg Trucks Stands Out by Forging Partnerships with Customers

Peter Vecchiarelli says that selling commercial trucks — everything from box trucks to tanker trucks to huge dump trucks — is a lot like selling … almost anything else.

It’s obviously important to know everything there is about the products you’re selling and servicing, he told BusinessWest. But it’s more important to know and understand everything there is to know about the specific customer.

Indeed, sometimes what a customer thinks he or she needs isn’t really what they need, said Vecchiarelli, general manager of Nutmeg Truck Center in West Springfield, which sells and leases International and Isuzu vehicles and services all makes.

“You don’t want to be a know-it-all, but you want to suggest things that will benefit the customer,” Vecchiarelli said, adding that these suggestions comprise just one of the keys for this business.

Tom Parsons agreed. He sold cars for 30 years before joining Nutmeg, and noted some similarities between that world and this one. In both, and especially this one, success comes from working in partnership with the client to forge an appropriate solution.

“You really have to know the product and what the customer needs,” he explained. “Every single customer has a business, where every person who buys a car probably doesn’t, and each business is different.”

This mindset has enabled Nutmeg — a Connecticut-based business (hence the name) with six locations (the other five are in Connecticut — to stand out in a crowded field of competitors, said Vecchiarelli. He added that success isn’t necessarily dictated by the inventory on the lot (although that certainly helps), but rather by the level of trust that can be established with the client.

“We try to sell ourselves,” Vecchiarelli said. “People buy from who they like and trust, that’s one of our huge mottos. We’ve been around, and people trust us.”

For this issue and its focus on auto sales, BusinessWest talked at length with Vecchiarelli and Parsons about the truck business and what it takes to be leader within it.

This Isuzu truck, suitable for a wide array of potential clients, is one of many on the lot at Nutmeg Trucks.

Driving Force

And Vecchiarelli started by saying that the truck business certainly wasn’t in his plans when he graduated from Westfield State University in 1992.

Actually, he didn’t have any real plans at all.

Indeed, he earned a degree in Communications, but had no solid ideas about what to do with it. For a while, he worked his summer job and coached football with his brother at Agawam High School. One day, he came across an entry level management job at Penske Truck Rental in Chicopee.

That’s how he got his start in the truck business, and when he found Nutmeg in 1996, he never looked back.

And while looking straight ahead, he told BusinessWest, he wears a good number of hats. Many are part and parcel to having ‘general manager’ on one’s business card, but some might surprise you.

For example, he might very well be the one delivering a new or used truck to a client, an assignment he said he carries out on a regular basis.

This is one of those little things that add up, he said, adding that the big things include having quality products to offer and, again, working closely with the client to find solutions.

This is necessary, because, as noted, there is considerable competition within the truck marketplace.

On the International side, Nutmeg competes against the likes of Ford, Freightliner Trucks, and Mack Trucks. Isuzu competitors include Chevrolet, Hino and Mitsubishi.

Overall, business has been solid over the past several years as the economy has continued its pattern of slow yet steady growth, said Vecchiarelli, adding that company sold more than 40 new and used vehicles in 2018 and is on pace to double that number this year.

It’s customer portfolio, as might be expected, is diverse, and includes everything from general contractors to municipalities to area farms.

In addition to selling trucks, Nutmeg also sells truck parts and provides other services to its customers. Vecchiarelli noted that Clean Machine Power Wash buys all its trucks from Nutmeg, which has a great relationship with the owner. A few weeks ago, the business had its company picnic and asked if Vecchiarelli would do a few oil changes on their trucks while the business was closed for the day. Each oil change on a truck takes from an hour to an hour and a half to complete, and Nutmeg did 11 oil changes throughout the day.

“It’s just the little things we do,” Vecchiarelli said. “It’s not always an 8 to 5 job. You have to do what it takes.”

This brings him back to that work involving relationship-building, how it can create repeat customers and often turn relatively small transactions into much larger ones down the road.

As an example, he recalled the story of how the sale of an $11,000 used box truck eventually turned into much more.

“As I was delivering the used truck, the customer said he was interested in buying a new tri-axle dump truck in the future,” said Vecchiarelli while pointing out one of the obvious benefits of doing that work himself. “We put stuff together and sold him one and he then recommended his friend to us for another tri-axle dump; we turned an $11,000 sale into two dump trucks worth almost $400,000.”

Fundamentally Speaking

There have been many stories like that recorded over the years, said both Vecchiarelli and Parsons, adding that by focusing on the fundamentals of customer service, Nutmeg continues to thrive and grow.

“Those fundamental things are so true,” he said. “We practice fundamentals, try to over deliver and exceed expectations.”

Vecchiarelli agreed. “The biggest thing that sets us apart from the competition is experience, getting the job done, and building relationships,” he said in summation. “If you do little things right, people remember that.” u

Autos

Rob Pion, says Buick is trying to make inroads in the SUV market and has a lineup to do just that.

Buick’s SUV Lineup Helps Company Shed ‘Uncle Car’ Image

Editor’ Note: With this issue, BusinessWest launches something new and different for its auto-sales section — first-person looks, and some commentary — about some of the vehicles that are, let’s say, in the news.

And that person will be me.

That laughing you just heard was brother Robert. He’s reading this and thinking, if not saying out loud, ‘George is going to do car reviews?!?’

Well, sort of, as I will explain.

First, as to why my brother is laughing … while, like most all guys (and people for that matter), I like cars and shared every Baby Boomers dream of owning a 1972 Dodge Challenger, I am not a ‘car guy.’

Am I, however, like most people. My ability to ‘work’ on cars is limited to adding washer fluid and putting air in the tires. I wash it, I vacuum it, I put Armor All on the steering wheel, I put gas in it, and I drive it. That’s most people. So am I qualified to do this? I guess. As much as anyone else.

What is this? Well, it’s not reviews of the cars and trucks coming onto the market these days. I won’t be rating cupholders, trunk space, and headlights — although they’re all important. I’ll be using test drives to talk about emerging stories in this business — and talk a little about the cars, trucks, and SUVs themselves.

First, more about me … my first car was a 1973 Chevy Impala. There are a lot of Boomers nodding their heads right now. That was a lot of people’s first car. It was a large, four-door sedan, and I have been driving those ever since, with one real exception.

My now ex-wife and I were in Aruba in 1994, visiting the far side of the island. Those who have been there know it looks like the kind of place Kirk, Spock, Dr. McCoy and the crew member destined to die in that episode would beam down to and put the phasers on ‘stun.’ It’s desolate, with lots of sand and pink rocks and things like that. Anyway, to get around, you need a four-wheel drive vehicle, so we rented a Chevy Tracker, a small, as in very small, domesticated version of a Jeep.

We liked it so much, we said ‘when we get back, we gotta get one of these.’ And we did.

My sister in law likened it to a ride at Six Flags. ‘You have to be at least this tall to ride in it,’ she would joke, ‘and you must keep your hands and feet inside the vehicle until it comes to a complete stop.’

Other than that, large four-door sedans. With big back seats and big trunks. This, despite the fact that I don’t think I’ve had a human passenger in my back seat since a funeral procession. In 1993. But I have to have a big back seat. As for the trunk, it’s for the golf clubs, but hardly anyone builds a trunk big enough to put all the clubs down sideways or even on an angle. So I have to take the driver out, which is a pain.

All of this provides a nice segue to … Buick.

This is the company that invented the large four-door sedan. Well, not really, but everyone thinks they did. That’s seemingly all they made for decades, for guys (and women) like me.

I had an uncle who only bought Buicks. I think everyone has an uncle who only bought Buicks. They’re an ‘uncle’ car. Or at least they were.

For some time now, Buick has been working hard to put young people into their vehicles. In the late ’90s and early 2000s, you might remember that GM hired Tiger Woods to be its Buick spokesperson. His mission wasn’t to sell to golf fans, but to the younger audience, and he had some success. That’s some.

Today, Buick is letting its cars do the talking, only the cars are, for the most part, SUVs. (I have been told that in the lingo of the industry, SUVs are not cars; they are SUVs. Large four-door sedans are cars. That’s what I’m told.)

Back to Buick … they’re not selling many cars anymore, but they’re selling more SUVs — and to people of all ages, as Rob Pion, third-generation general manager of Bob Pion GMC Buick in Chicopee, explained as we took the Buick Enclave (Avenir model), the largest of the models in the lineup, for a spin.

Big Improvement

At first, I thought it was the SUV.

The world really does look much different when you’re riding high in a large SUV (maybe 30 inches from the ground) as opposed to your standard four-door sedan (maybe 20 inches).

But it’s not the vehicle, Memorial Drive looks much different from any height, as became clear as we headed north on that road from the Pion dealership toward South Hadley.

Back when Tiger Woods was plugging Buicks and Bill Clinton was in the White House, BusinessWest operated out of a small office on Memorial Drive. Back then, this was the land that time forgot — there was a dead mall (Fairfield), a Ponderosa Steak House (maybe it was a Bonanza), and other chain restaurants seen nowhere else. Things look much better now with new hotels, a strong lineup of stores where the mall was, and many new businesses.

But there is that huge open lot where the Hu Ku Lau used to be.

“We’re not sure what’s happening there,” said Pion as we drove by the grassy lot, obvious concern in his voice. “Everyone’s watching that closely to see what develops.”

Enough about Memorial Drive … back to the Buick and the Enclave Avenir, sticker price just under $60,000. It’s large, with three rows; looking in the rear-view mirror, the back window looks like it’s in another state — one of those in the Midwest — and well-appointed. It features what’s called ‘intelligent all-wheel drive,’ which means it did well on its SATs, and has every safety device one might expect, as well as all the technology, meaning connectivity. It’s six-cylinder engine delivers 310 horses and decent mileage for something this large — 17 city/25 highway mpg (see, I can do car talk). Meanwhile, it easily passes the golf-bag test.

And it’s really, really quiet, meaning my tape recorder had no problem picking up Pion as he talked about how Buick’s SUVs — the smaller Encore, mid-sized Envision, and large Enclave — are expected to compete with the top luxury brands in the market and bring younger audiences into the Buick showrooms.

BusinessWest Editor George O’Brien tries out the Enclave Avenir, the top of the line.

“GM’s vision for this is to go against BMW, Lincoln, Mercedes … the premium SUVs,” he said, referring specifically to the Enclave Avenir, but ostensibly to the whole lineup. And while Buick is still lagging well behind other brands when it comes to SUV sales, it is starting to gather some momentum, especially with the smaller model, the Encore, priced in the mid 20s to just over $30,000.

“We’re getting young people to at least come in and give it a look,” Pion said of the SUV lineup. “Many wouldn’t even do that before.”

Buick still has a long way to go to not only shed it’s old-person’s-car image but also become a serious player in the white-hot SUV market.

But based on this drive down Memorial Avenue and the vehicles now in the Buick showrooms, the carmaker known for sedans, as in big sedans, would appear to have a fighting chance. u

Autos

The ‘Attainability Factor’

Peter Wirth says the new A-Class presents a huge opportunity

Peter Wirth says the new A-Class presents a huge opportunity to showcase the attainability of several Mercedes models.

Since opening its doors roughly 16 months ago, Peter Wirth says, Mercedes-Benz of Springfield has met or exceeded most all of its stated goals and expectations.

Save one, perhaps.

Indeed, if it is lagging in any aspect of its multi-faceted operation, it is in the broad realm of educating customers across its broad service area that a Mercedes is affordable — or ‘attainable,’ the word he and the industry prefer to use.

It’s not from lack of trying, he said, before adding quickly that the company will try even harder, but probably more a function of the fact that there hadn’t been a Mercedes dealership in the 413 area for a full decade before this one opened on the site of the old Schine Inn just off Route 291 in Chicopee.

And this helps explain why residents of this area might not be as enlightened as those in other markets when it comes to the fact that ‘Mercedes’ and ‘affordable’ can co-exist in the same sentence.

“We missed out on all that communication, getting the cars into the marketplace, talking about them, and showing them,” he said of that 10-year hiatus, during which the carmaker greatly expanded and diversified its lineup.

But Mercedes now has an additional arrow in this quiver of attainability and another intriguing talking point, he said, with the introduction of the A-Class, which will begin rolling into showrooms, including the one in Chicopee, next month. It joins the CLA, introduced several years ago, and the GLA model SUV as Mercedes models that start at under $40,000, and Wirth expects it to be a significant addition to the portfolio.

“We feel that this is a unique opportunity for us to educate consumers in this market,” he said. “This is the first big launch of a car that’s going to shape the brand perception since we opened.”

That’s because the A-Class is about more than affordability, he told BusinessWest. It’s also about technology and a leap from traditional luxury to what Mercedes is calling ‘modern luxury,’ meaning features like MBUX.

“We feel that this is a unique opportunity for us to educate consumers in this market. This is the first big launch of a car that’s going to shape the brand perception since we opened.”

That stands for Mercedes-Benz User Experience, which the carmaker, and Wirth, tout as the next generation of user-friendly technology. The MBUX user interface allows the driver to use voice commands to control everything from the radio station and the volume level to the temperature in the cabin.

“The system is easy to learn because it actually learns you,” said Wirth, adding that the technology comes to understand the driver’s habits, right down to the preferred radio stations and music. “This is something that will trickle up into the other cars over time, but it’s something we’re phasing in with the new entry point to the brand.”

The A-Class is equipped with MBUX, hailed as the next generation of user-friendly technology.

The A-Class is equipped with MBUX, hailed as the next generation of user-friendly technology.

It was explained — sort of — in a commercial that first aired during the Super Bowl. It wasn’t rated high in any of the ‘best of’ polls, but you might have seen it. A young, professional-looking male starts to see everything he says come to fruition, from an ATM spitting out money after he gives the command ‘make it rain,’ to an opera singer magically transforming into rapper Ludacris when he says ‘change the music.’

The trend continues when he gets behind the wheel of his Mercedes A-Class and voices several commands, including ‘change the color’ — and the dashboard lights do just that — as well as ‘make it cooler,’ and ‘play my music.’ The commercial ends with the ‘voice’ saying ‘if only everything in your life listened to you like your new Mercedes.’

Wirth gave similar commands as he gave a demonstration of the first A-Class to arrive at his dealership. Starting each conversation — because that’s what these are — with ‘hey, Mercedes,’ he proceeded to turn the heat up by merely saying ‘I’m cold,’ receive directions to a downtown Springfield business, and get a rundown on the restaurants within a mile’s radius of the dealership.

Meanwhile, the dashboard instrumentation can be changed electronically to display anything the driver wants, from the odometer and tachometer to things like speed limit and the range the car can go on the amount of gas left in the tank.

As for the affordability factor, the A-Class has a base sticker price of $32,000 (which includes a considerable amount of standard equipment, including a sunroof and the user interface), and most will price out at under $40,000.

That’s a number that wouldn’t surprise most people in other markets, who have had a Mercedes dealership to visit through this decade and have become aware of several models that fall into the ‘affordable’ category. But it might still surprise many in this region.

And with that, Wirth revisited another Super Bowl commercial, the one for the CLA model, which debuted at $29,000. It was a spot that turned some heads and put a Mercedes in driveways where one had never been.

“That was a big bang — that was eye-opening for many people,” he said, adding that the CLA, which remains popular, would go on to secure what’s known in the business as a ‘high conquest rate,’ meaning that people were opting out of the cars they were driving and into the new Mercedes model.

This is significant, he said, because, conversely, Mercedes has one of the highest loyalty rates within the industry, meaning that once they own or lease one, the Mercedes customer is very likely to go back for another.

“This is hugely important to us because we feel like we’re establishing a relationship with someone and giving exposure to our brand to people who will ultimately keep on doing business with us going forward,” he said. “They will have kids, they’ll maybe want an SUV at some point, so filling that pipeline with customers is important.”

The company is hoping for a similarly high conquest rate with the A-Class, which can turn heads not just with its styling and price tag, but also the user-friendly technology.

If they’re right, more people will be saying ‘hey, Mercedes,’ before and after they get in the car.

— George O’Brien

Autos

Cruise Control

As the 2019 models continue to roll into area showrooms, area auto dealers report that sales remain brisk, at something approximating the levels of 2017, which was a very robust year for the industry. Meanwhile, a host of trends have continued or accelerated, including torrid sales of SUVs and trucks, a high volume of used-car transactions, and a heavy emphasis on improving the overall consumer experience.

Jeb Balise held his hand up with his thumb and forefinger barely a half-inch apart.

And then, for emphasis, he brought them even closer together.

“They’re down about that much,” Balise, president of Balise Motor Sales, told BusinessWest, referring to new car sales in 2018 (which still has a few months left, obviously) compared to a year ago.

Essentially, sales are flat, which, as Balise and others told us back at the start of this year, around President’s Day sales time, is a really good thing, because auto sales — an almost always accurate barometer when it comes to the national economy — have been rock solid the past several years.

“They’re just about the same as last year — down a tiny, tiny bit,” said Balise, adding that there is just that much less pent-up demand (resulting from cars, like their owners, living longer lives these days) this year than the past few. But there are still a number of other factors driving steady sales, including a still-booming economy, record-low unemployment, quality vehicles across the board, attractive incentives from the manufacturers, and more.

So sales are still humming, and Carla Cosenzi, president of the Tommy Car Auto Group, believes that at her four dealerships, sales are actually up from a year ago.

“We’re seeing an increase in 2018 over last year, and 2017 was a very good year for us,” she said, echoing Balise’s comments. “It’s not a significant increase, but an increase nonetheless, and 2017 was a really good year.”

Overall, 2018 has been a year when recent trends in the auto market have maintained their speed or even accelerated slightly. These include red hot used-car sales; white-hot SUV and truck sales (especially the former); growing interest in electric and hybrid vehicles, although they still comprise a very small segment of the market; and new levels of convenience for the consumer.

“We’re seeing an increase in 2018 over last year, and 2017 was a very good year for us. It’s not a significant increase, but an increase nonetheless, and 2017 was a really good year.”

Peter Wirth, co-owner of Mercedes-Benz of Springfield, which opened just over a year ago, says he’s seen all or most of the above at his dealership, a facility that has met or exceeded the lofty goals set for its first year of operation.

And that’s especially true in an often-overlooked but quite important segment of this business — the service department.

There are many qualitative measures for this, he said, especially the fact that the dealership recently hired its 12th technician, tripling the number it started with, for the 14-bay facility.

This surge in business in the service department stems from a variety of factors, from how long Mercedes models stay on the road to the fact that the next-closest dealership is in Hartford, said Wirth, adding that demand has risen steadily since the ceremonial grand-opening ribbon was cut — a clear sign that the new dealership has made its presence known.

“The floodgates opened, and in a good way,” he noted. “We’ve been at capacity for the next few days in the service department since the day we opened, and way we’re keeping up is by adding capacity so we can keep it at a reasonable timeframe for customers.”

“It’s been a 100% success story — we’ve never had to send a technician home early; we’ve never run out of work,” he went on. “Not just in the amount of work we’re getting, but also in the team we were able to build.”

For this issue and its focus on auto sales, BusinessWest talked with several area dealers to gauge the local market and the forces, well, driving it. Cars aren’t selling themselves, obviously, but in many respects this industry is on cruise control.

Pedal to the Metal

Those who spoke with BusinessWest said that, these days, the new models arrive at the dealership almost year round, unlike years ago, when all or most would be revealed in the early fall, to considerable fanfare.

Still, many new models do make their debuts as the leaves change colors, and thus this is a good time to take stock — literally and figuratively — of what’s happening at area dealerships and within this all-important sector.

Jeb Balise, seen here at his company’s Kia dealership on Riverdale Street

Jeb Balise, seen here at his company’s Kia dealership on Riverdale Street, says new-car sales are down just slightly from 2017, but still at a very high volume.

First and foremost, said Balise, this remains a buyer’s market in most all respects, even though demand remains high, especially for those trucks and SUVs. That’s because supply is also high as the manufacturers continue to make product and dealers try to move it — usually with good success.

“All of the manufacturers are producing plenty of cars, and demand is off just slightly from a year ago — just enough to put the consumer in the driver’s seat, if you will,” he told BusinessWest. “Incentives have never been better — even for SUVs.

“It’s not because there isn’t demand,” he went on, referring specifically to the SUV segment of the market. “It’s more because all the manufacturers have them now, and they’re trying to grab their piece of the pie.”

The seismic shift (another industry term) to SUVs has been ongoing for quite some time now, but it moved to an even higher gear in 2018.

Indeed, all those we spoke with said sales of SUVs now exceed those of cars (sedans) for almost all models they sell. Overall, Balise said, truck and SUV sales now account for roughly 60% of all vehicles sold and leased.

And this trend toward SUVs extends to some manufacturers renowned for their cars, such as Volkswagen and Volvo, said Cozenzi. Indeed, as she stood in the Volvo dealership recently acquired by the TommyCar Auto Group, she was surrounded by SUVs — small, medium, and large — on the small showroom floor.

They’re all selling, at Volvo and other dealerships, and especially the smaller SUVs, said Cosenzi, adding that they appeal to drivers of all ages for reasons ranging from accessibility (they’re easier to get in and out of, for most people, anyway) to decent gas mileage.

“The smaller SUVs, like the Rogue [Nissan] and the Tiguan [Volkswagen], continue to dominate,” she said. “The Rogue is the number-one-selling vehicle at the Nissan store, and it’s been that way for a few years now.”

Even Mercedes is now selling and leasing more SUVs than cars, said Wirth, adding that the company passed that milestone in 2017, and the arrow continues to move upward.

Still, there are plenty of sedans to be sold, said all those we spoke with, noting that, overall, car makers are turning out quality, easy-to-maintain products across the board, giving consumers plenty of often-hard choices to make, thus motivating the manufacturers to offer solid incentives.

And soon there will be an intriguing new choice, said Wirth, noting the arrival — probably by early next year — of the Mercedes A class, an entry-level luxury vehicle, complete with some different bells and whistles, that should bring that famous nameplate onto more driveways.

“This opens us up to a whole new customer,” he said. “You might have someone attracted to this car not because of the Mercedes-Benz design or the Mercedes-Benz safety or the brand image; it might be just because of the technology in the car. You can say, ‘hey, Mercedes, I’m cold,’ and the temperature will come up, or ‘hey, Mercedes, I’m hungry,’ and it will list the restaurants. And this is in the car that represents the entry point, not the $100,000 model.”

Staging a Coupe

Looking back on his first year of doing business in the Pioneer Valley, Peter Wirth, who previously managed a Mercedes dealership on Long Island, said this past 12 months have certainly been a learning experience.

Among the things he’s learned is that this market is somewhat more conservative than the one he left — a trait that shows up in higher volumes of used-car sales as compared to new-car transactions and more sales than leases — and also generally less aware that Mercedes is now more affordable and therefore more attainable than it has been historically because of the introduction of entry-level models.

Peter Wirth, seen here with members of the service team at Mercedes-Benz of Springfield

Peter Wirth, seen here with members of the service team at Mercedes-Benz of Springfield, says the company has exceeded all the goals it set for its first year of operation — especially in service.

“We still have some work to do on the matter of affordability,” he told BusinessWest, adding that perceptions about the Mercedes brand being beyond one’s reach remain despite more than ample evidence to the contrary. And that goes across the board, for passenger and commercial vehicles alike.

But he’s hoping that area residents will follow the lead of Jeff Bezos, who recently ordered 20,000 Sprinters (a cargo van made by Mercedes) for Amazon.

“I’m sure he did the math before he placed that order — I’m sure he sat down and looked at the life-cycle cost, the reliability, the down time, and everything else. He’s a pretty clever guy, and the fact that they committed to us says something.”

To Wirth, it says people need to look beyond the sticker price on the windshield (and Mercedes is competitive in that regard as well with many models) and look at the other ingredients that go into the equation, such as dependability, maintenance costs, convenience, and the sum of all these parts.

“We’ve been having the conversations regarding affordability, but also about how this is an amazing value proposition,” he noted. “We’re still working on it, but we’ve made great headway.”

Something Wirth didn’t need to learn, because he knew it already, is how important customer service and providing convenience are these days, especially to time-strapped, increasingly demanding customers.

“Time is money,” he said, adding that the dealership works to save customers some of that precious commodity in every way it can, from picking up a car bound for the service department at one’s home to getting them in and out of that service waiting room as soon as possible.

Cosenzi agreed, and said the TommyCar Auto Group has responded with something called Click, Drive, Buy, a new program that enables someone to buy or lease a vehicle almost entirely from home and on the internet.

“Especially at our Volkswagen store, we’re seeing a lot of our customers complete the entire transaction online and just come into the dealership to take delivery of the vehicle,” she explained. “I don’t think we anticipated that it would be as popular as it is, but people enjoy the convenience; they like buying a car this way. And it’s been popular with people of all ages.”

Gearing Up

As he brought his forefinger ever closer to his thumb while comparing sales this year to last, Balise emphasized, again, that anything at or near last year’s mark is quite good.

And while he didn’t want to make too many projections about 2019, because things can change quickly, as history shows, he implied that he may well be doing the same thing with his fingers this time next year.

That’s because the basic laws of supply and demand — not to mention an economy still in high gear — should keep this industry operating in what amounts to the status quo.

And that’s a high-octane sales climate.

George O’Brien can be reached at [email protected]

Autos

Expansion Mode

Carla Cosenzi says the recently acquired Volvo dealership in South Deerfield is a perfect fit for the TommyCar Auto group.

Carla Cosenzi says the recently acquired Volvo dealership in South Deerfield is a perfect fit for the TommyCar Auto group.

Carla Cosenzi says that, like most companies in its category, the TommyCar Auto Group is always on the lookout for possible additions to the portfolio of dealerships.

But growth for the sake of growth is not what this venture — started by her father, the late Tom Consenzi, and taken to a new level by Carla and her brother, Tom — is looking for.

“It’s important for us to have the right brand at the right time and the right location moreso than just looking to grow,” she told BusinessWest, adding that all those boxes could certainly be checked with the company’s recent acquisition of Pioneer Volvo in South Deerfield.

Right location? Check. The dealership is only a few miles north on I-91 from the group’s other facilities — Northampton Volkswagen and the adjacent Country Hyundai, as well as Country Nissan on Route 9 in Hadley.

Right brand? Check. Volvo has always been renowned for its quality and focus on safety, and it has recently introduced several new models, including a small SUV, the XC40, that is turning heads in the industry.

Right time? Check. Auto sales in 2018 are just slightly off the levels set in 2017 — although the TommyCar Auto Group has registered growth over that span — but overall volume remains at very high levels.

Overall, this acquisition is solid in every respect, said Cozenzi, adding that that it gives the TommyCar Auto Group its first real entry into the luxury-car bracket, meaning a brand that won’t really compete with the three sold just down the interstate.

Meanwhile, the group’s size and economies of scale will enable it to give the Volvo dealership greater visibility and opportunities to grow.

“It’s a small dealership, and it was family-owned and operated, so we’re going to continue the same values they had,” she explained. “But since we’re a bit of a larger group, we have the ability to add more amenities than they were able to provide, but with the same core values.

“We’ll grow the brand — we’ll give the brand more exposure through advertising,” she went on. “And since we’re a larger group with more of a following, we’ll be able to attract more people to the dealership, and to Volvo.”

Given all this, it’s understandable why the TommyCar Auto Group has had its eye on the Volvo dealership for some time, and also why it moved quickly and decisively when the family-owned operation came on the market earlier this year.

“It’s a small dealership, and it was family-owned and operated, so we’re going to continue the same values they had. But since we’re a bit of a larger group, we have the ability to add more amenities than they were able to provide, but with the same core values.”

“This is a brand that we’ve been looking at for a long time because it fits in well with the other manufacturers we have in the group, it’s a great location, and it’s a perfect size for us,” she explained. “We’re really attracted to Volvo and everything it stands for in terms of luxury and convenience it provides to customers, the value of the brand, and the safety of the vehicle.”

Cozenzi said the dealership in Deerfield is, indeed, small compared to most these days, and not exactly modern. However, it is comfortable and well-appointed. She said it is likely the company will renovate it in the short term and replace it in the long term, meaning over the next several years.

In the meantime, as she said, it is a solid addition to the portfolio, a brand with a number of redesigned models, cars, and SUVs alike.

“So it’s an exciting time for us to be getting involved with the brand,” said Cosenzi, citing the XC 40 as one example of a Volvo model in strong demand. “I’m coming to learn the brand, and it’s clear that they’re very innovative.”

As an example, she noted ‘Care by Volvo,’ a comprehensive package of services that brings new layers of convenience to customers.

“They take care of the essentials when they lease you a vehicle, including insurance, maintenance, repairs, a concierge service, and more,” she said. “So you can see them changing with the times, and it’s exciting to be partners with an manufacturer that’s so on edge with what’s happening.”

Like she said … the right brand and the right time — and the right location.

— George O’Brien

Autos Sections

Driving Forces

The auto market has been in high gear for the past several years, and area dealers expect that pattern to continue, and for several reasons. These range from a solid economy and abundant consumer confidence to quality vehicles and lingering pent-up demand.

‘Flat.’

In most discussions involving business, that term has a somewhat negative connotation to it. And in many ceases, we can leave out the ‘somewhat.’

But in the case of the auto-sales industry and local dealerships … ‘flat’ has a pretty good sound to it these days. In fact, just about everyone who would use images of George Washington and Abraham Lincoln in their promotions this week, or tie red, white, and blue balloons to the cars in their showroom come July, would be pretty happy with ‘flat.’

Just as they were last year.

Indeed, since the very dark days during and just after the Great Recession, car sales have rebounded nicely, with the high-water mark, if you will, coming in the 2016 sales year, with nearly 17.5 million light vehicles (cars, SUVs, and pickup trucks) sold nationwide.

Last year was off that pace, but only slightly, with more than 17.1 million light vehicles sold. And the projections for 2018 are for pretty much the same, with maybe another slight decrease of 1% or less.

But, again, 1% off what? Even in the super-solid years leading up to the economic nosedive a decade ago (years 2001 to 2006), total sales were under or just slightly above 17 million.

As we said, ‘flat’ has rarely looked so good.

“Yes, last year was off what it was in 2016, but you’re coming off historic highs — and the drop was minuscule,” said Jeb Balise, CEO of Balise Motor Sales, adding (after checking his phone to make sure he had the numbers right) that sales this January were up 1% over a year ago, this despite some bitterly cold days, a few snow days for many adults, and even that dreaded bomb cyclone thing.

Jeb Balise says projections are for another flat year for auto dealers. But ‘flat’ is more than acceptable given the high volume of sales in recent years.

Jeb Balise says projections are for another flat year for auto dealers. But ‘flat’ is more than acceptable given the high volume of sales in recent years.

And the various forecasts he’s seen project sales of between 16.7 million and 16.9 million light vehicles, which would be another outstanding year.

Other dealers we spoke were equally upbeat and happy with ‘flat’ or something approximating it, and said a host of factors are contributing to solid sales and optimism that this trend will continue. A healthy stock market (until quite recently), a sound economy, still-low interest rates (albeit amid concerns that they will rise), low unemployment, large amounts of consumer confidence, well-made products, lots of inventory, attractive incentives from the manufacturers, some lingering pent-up demand, and the basics of supply and demand are all on that list.

“It’s just a good time to be buying a car,” said Don Pion, president of the Chicopee-based dealership started by his father, Bob Pion Buick GMC. “The product is good — the best I’ve seen since I’ve been in the business. They’re good products, they get good fuel economy, maintenance is pretty inexpensive on these new cars today, the manufacturers have been aggressive with their offers, there are good lease offers … it’s all good.”

Michelle Wirth, co-owner of Mercedes-Benz of Springfield, which opened its doors last fall, concurred.

“We have a very optimistic outlook on 2018,” she said. “People are feeling good about the economic outlook, and that allows them the mindset to spend money a little more than they would have in years past.”

Meanwhile, solid sales are not the only trend within the industry on track to continue. Others include the soaring popularity of SUVs and crossovers — Wirth noted that, for the first time last year, Mercedes reported more sales of those types of vehicles than cars — and an ongoing evolution in the role of the dealership.

Indeed, where once that was a place to check out the new models, see what they cost, and explore available options, consumers can now do a lot of that, if not all of that, on the Internet. By the time they come to the dealership, they know what they want, and they know what they expect to pay. Thus, the role for those at that facility is to make the rest of the process as quick and painless as possible.

In response, TommyCar Auto Group, comprised of three dealerships selling Nissan, Hyundai, and Volkswagen, has come up with a new product called Click, Drive, Buy, whereby the consumer can do pretty much the entire buying or leasing process online, and also get a car delivered to their home for a test drive.

“They can fill out a credit application, do the pricing up front, they can go through all the financing options and rebate options and see what they qualify for, all without coming to the dealership,” said Carla Cozenzi, president of the group. “They can even research all of the after-market products like warranties and gap insurance, all of that through our website.

“We’ve evolved because we had to,” she went on, speaking for everyone in the industry. “Customers can literally do it all from their iPhone.”

Fast Times

As he talked about the current market and the forces driving it, Pion referenced one recent vehicle traded in to get some of his points across.

“It had 250,000 miles on it, but it looked like it only had about 50,000 miles on the odometer,” he told BusinessWest. “It was in great shape; you would never know it had a quarter-million miles on it.”

And this was certainly not an isolated incident, he went on, adding that these high-mileage vehicles he’s seeing on a regular basis say a lot about the market today.

They speak to the quality of the cars on the road today and their durability — “you watch the cars drive by every day, and you see a lot of older models,” said Pion — but also to the fact that, eventually, people need, or want, to turn them in.

And this lingering pent-up demand for new models — although there is much less of it than was a few years ago — is just one of many reasons why Pion’s dealership had a 2017 to remember.

Don Pion, seen here with his son, Rob, general manager of the dealership, says the soaring popularity of SUVs and crossovers has helped fuel solid sales for the industry.

Don Pion, seen here with his son, Rob, general manager of the dealership, says the soaring popularity of SUVs and crossovers has helped fuel solid sales for the industry.

Indeed, Buick sales were up 40% over 2016, he said, while GMC sales were up 30%, and used-car sales were up 20%.

Pion attributed these strong numbers to that combination of factors he described above. And while he’s not expecting a repeat, exactly, he’s projecting another very solid year.

“No one’s looking to set a record,” he told BusinessWest. “But I don’t think we’ll see any declines, only more-modest growth, perhaps.”

Consenzi agreed, and told BusinessWest that 2017 was a solid year for all three stores within the group, especially Nissan, and she is expecting improvement on those numbers across the broad in 2018.

Balise was also optimistic, and said that the pent-up demand from several years ago has been replaced by a state of general “equilibrium,” as he called it. Surveying the market now, he sees still-ample demand and considerable inventory, an intriguing mix.

“Business is good, and plenty of cars are being sold,” he explained, “but it’s a little more competitive amongst dealers, which is always good for the consumer.”

As for Wirth, she doesn’t have any numbers from last year to use as the basis for projections, or many of them, anyway.

As noted, the dealership opened its doors in September, and that last quarter or so of 2017 was essentially a time for reintroducing the brand to this region after nearly a decade’s absence, she said, adding that this process is ongoing and has many nuances to it.

Indeed, reminding people that they no longer have to drive to Hartford or Route 128 to buy a Mercedes or get one serviced is just part of the equation, she went on.

Another big part is introducing the region to the people behind that dealership with the huge Mercedes sign in front of it — and they’ve done so in ways ranging from a huge grand opening to a presence on the ice at the MassMutual Center for Thunderbirds games, to various forms of support for several area nonprofits.

Still another is educating people about the brand, how it has evolved in some ways — all those SUVs, for example — and making it clear that, in many cases, and despite popular perception, it is not beyond their reach.

“The brand stands as a symbol of success and the ultimate in luxury, and it’s just a big brand to wear,” Wirth explained. “Mercedes is not just for folks who have made it or are about to retire and end their career; it’s very much for the person who’s still climbing.”

Elaborating, she said the dealership, and Mercedes-Benz in general, are trying to attract people not of a certain age group or income bracket, but people with a certain mindset.

“They’re young at heart, they’re entrepreneurial, they enjoy craftsmanship and brands that stand for something,” said Wirth as she explained this mindset. “As for the brand, they look at it like, ‘this is this best, everyone deserves the best, so reward yourself.’”

Into a Higher Gear

Getting back to the outlook for 2018 and the factors driving those optimistic projections, one of the influencing forces is the quality of the vehicles now parked at dealerships across the region. Indeed, while those cars and SUVs with 100,000 or 200,000 or even 300,000 miles on them are still getting the job done, the products rolling off the assembly line are appealing — enough to prompt some trade-ins.

Michelle Wirth says the role of the dealership continues to evolve, and the focus now is on transparency and making the consumer’s experience as easy and painless as possible.

Michelle Wirth says the role of the dealership continues to evolve, and the focus now is on transparency and making the consumer’s experience as easy and painless as possible.

Especially the crossovers and SUVs. As noted earlier, even brands that have built their heritage on sedans, like Mercedes, are selling more SUVs than cars these days. Buick, known for most of its existence for its sedans, now has a lineup flush with SUVs and crossovers, said Pion, and there’s only one true sedan left — the LaCrosse.

The Balise company counts nearly a dozen makes in its portfolio, including Ford, Chevrolet, Toyota, Honda, Nissan, Lexus, Mazda, Subaru, Kia, and more, and for nearly all them, SUV and crossover sales now exceed those of sedans, said Jeb Balise.

And there are many reasons for this, everything from relatively low gas prices to the additional room in the SUVs and crossovers; from the added height of such vehicles, and the fact that they’re somewhat easier to get in and out of, to their ability to take someone virtually anywhere they want to go.

“People are more active,” said Wirth. “They want to go more places and do more things, and those vehicles present themselves as being more versatile.”

Cosenzi agreed, and noted that most manufacturers, including those she represents, now have SUVs and crossovers in small, medium, large, and even micro sizes, and they are attracting consumers in all age groups. And for most people trading in a car, she said, the SUV they’re getting into will offer comparable mileage.

Even Volkswagen, which has traditionally lagged well behind in SUV and crossover sales, is making great strides with additions like the Tiguan, a smaller SUV, and the Atlas, a much larger model.

“Volkswagen always lacked in that category, but now it’s catching up,” she said. “We’re seeing it across all brands — the demand is really healthy in the SUV/crossover market.”

All that said, compact and mid-sized cars are still a huge segment of the market, said Balise, using one of the more iconic nameplates, the Toyota Camry, and some numbers off the top of his head to get his point across.

“Let’s just say Camry was selling 400,000 units and now they’re selling 315,000; that’s still a lot of momentum for that segment,” he said. “While the phenomenon is happening and it’s material — it impacts business, and we have to figure out what to do — it’s not a total-sum game. Sometimes you look at these reports and it looks like you’re never going to sell a car again, and it’s all going to be trucks — it’s not that dramatic.”

But it is still a sizable movement within the industry, as is the overall ‘dealer experience’ and the changes that have come to it, and the ever-greater emphasis on transparency and all that phrase implies.

As noted earlier, much goes into this equation, but it comes down to making life as easy as possible for the consumer during and after the buying or leasing process.

Putting it another way, Wirth said, while no one realistically expects to enjoy the car-buying process, dealers, and especially hers, are succeeding in making it far less painful that it was years ago.

How? By being up front and transparent with pricing, putting information in consumers’ hands, and adding convenience when possible, such us applying for financing online.

Balise agreed. “When it comes to the customer, their time is extremely important to them, and they don’t want to waste it,” he explained. “So when they come in, you need to be on your game and give them the information in an easy, transparent way; what you’re really doing is being as helpful as you can to help them make a decision.”

Pion echoed those thoughts, noting that a good number of people who come into a dealership ready to buy want to drive off in their new vehicle the next day — or even later that day — and dealers have to respond to such whims with inventory and an ability to get such deals done.

But these efforts to enhance the customer experience don’t end with the sale, as those in this industry like to say. Indeed, service is a huge part of the equation, especially with cars remaining on the road as long as they are, and emphasis on this part of the experience manifests itself in everything from spacious, well-appointed waiting areas to car washes built into the dealerships.

At the Mercedes dealership, said Wirth, the technician will create a video of the vehicle in for service and text it to the customer so he or she can see what the issue is.

“We’re in it for the long haul, and it’s more valuable to us and more important to us that people feel taken care of and understood,” she went on. “It’s more about how we meet people’s needs at that moment in time and have all the information at that moment.”

Full Throttle

The dealers we spoke with said those Presidents Day sales that once dominated the airwaves and turned Washington and Lincoln into pitch-people are still a part of the landscape, just not on the same scale as years ago.

Those sales were needed to propel the industry out of winter doldrums and create a bridge to spring, said Pion and Balise, both industry veterans. Today, car selling is different, and there is more of a even flow of transactions throughout the year — although a boost in February is always welcome.

That’s just part of a changing landscape in this business, where ‘transparency’ is now the watchword, and where ‘flat’ sounds really good.

George O’Brien can be reached at [email protected]

Autos Sections

On the Move — Always

The new car wash in West Springfield is the latest addition to an ever-growing portfolio of facilities for the Balise Auto Group.

The new car wash in West Springfield is the latest addition to an ever-growing portfolio of facilities for the Balise Auto Group.

As he talked about the very latest addition to the already-expansive portfolio for the Balise Auto Group, a car wash just off Riverdale Street in West Springfield, Jeb Balise said it was a capital-intensive, very necessary supplement to the collection.

Capital-intensive because car washes, as some might know but others might not, are now very sophisticated, computer-operated facilities offering an ever-greater array of wash options. And necessary because … well, consumers are becoming ever-more demanding, and, likewise, the auto business is ever-more competitive.

So auto groups like Balise need to respond with the proverbial ‘more’ and ‘better.’ ‘More,’ as in more products and services to offer those customers, and ‘better,’ as in better than the competition.

And this mindset reflects itself in everything from the company’s growing stable of car washes (there are now three, including two in Western Mass.) to the ongoing work to replace or renovate the group’s large roster of dealerships, including the Balise Nissan store a half-mile east of the car wash on Riverdale Street, to an insurance agency in Rhode Island as part of the mix.

“We’re making sure we’re giving the customer everything they want for support instead of just selling them a car,” said Balise as he talked about additions to the number of collision centers, used-car facilities, and more. “So if someone buys a car from us, they don’t have to worry about collision repair or getting their car cleaned or insurance; we can pretty much provide holistically everything they need for the life of that car.”

He offered those thoughts in an interview in one of the sales offices at Balise Nissan, the latest of the company’s dealerships to be replaced, or, in this case, given a huge makeover. Long operated under the name Jerry Rome Nissan, the facility now bears the Balise name.

Open for just over two months, the ‘new’ dealership was essentially gutted and rebuilt from the ground up, said Balise, adding that it is the first store selling this brand to incorporate new imagery and design elements developed by the carmaker.

The Nissan dealership on Riverdale Street now carries the Balise name. It’s the latest of the company’s dealerships to undergo extensive renovations or new construction.

The Nissan dealership on Riverdale Street now carries the Balise name. It’s the latest of the company’s dealerships to undergo extensive renovations or new construction.

“There was nothing left of the showroom — we stripped it right down to columns and roof, basically,” he explained. “We really rebuilt it, and you can feel it; you would never know it was a retro.”

That’s the word he chose for a dealership built in the ’80s and ’90s — before they became far more spacious (50,000 square feet in the case of the Toyota dealership, also on Riverdale Street), comfortably equipped, and customer-friendly.

As he talked about the Nissan store and offered a quick tour, pointing out its larger, revamped showroom and well-appointed service waiting area, Balise said there are a few minor touches to be completed before a grand opening can be staged — probably later this month.

And as those final touches are made, thoughts are already turning to what’s next, said Balise, adding that the company embarked on a massive campaign to make over facilities for all the brands it sells more than a decade ago, and there are still a few projects left to undertake.

One is the Balise Mazda facility on the other (north) side of Riverdale Street. Built in 1984, it is certainly showing its age, said Balise, adding that plans will be on the drawing board soon for either new construction or another extensive renovation.

Meanwhile, another nameplate in line to have a new home is Kia, which became part of the Balise stable in 2015 and has been housed in a small facility that was once a Mercedes dealership a decade ago.

Kia is a rising star in the auto galaxy, said Balise, adding that it has an attractive mix of cars, vans, and SUVs, and it will soon have a home befitting that status. Various options are currently being reviewed, and no formal plans have been announced, he went on, noting that both the Kia and Mazda facilities will be upgraded within the next 24 months.

“Our plans will be really impressive,” said Balise in reference to both projects, still in the developmental stage. “These will be either brand-new buildings or significant renovations — total change.”

As for the car washes, Balise said they are part of broader efforts to serve the full gamut of customer needs and provide additional layers of value.

The company started with a facility in Hyannis, where it also has several dealerships, then added one on East Columbus Avenue in 2016; the West Springfield location opened in January.

There are two more car washes on the drawing board for the next 24 months, said Balise, adding that the specific markets have not been identified.

The car washes offer ample evidence of consumers taking better care of their vehicles, but also of the value that auto groups are trying to provide.

Indeed, the car washes are strategically located to serve customers at the Balise dealerships (there are three on Columbus Avenue and a half-dozen on Riverdale Street), he noted.

Those who buy a car at any of the Balise dealerships get 60 days of free washes, he went on, and they also get special pricing on both everyday washes and the hugely popular ‘unlimited plans,’ whereby consumers can wash their car as often as they want for one monthly fee.

As for new dealerships, the company is always looking for new opportunities — in this market and others, he went on, adding that, despite an ongoing wave of consolidation within the industry, there are still a number of single dealerships and small groups that could be added to the portfolio if the conditions were right.

“Even with all the consolidation, it’s still a fragmented business,” he told BusinessWest. “The majority of facilities are owned by someone who might have two or three stores, or one store.

“We’re just focusing on the best-location, best-franchise philosophy,” he went on, and then making sure our facilities exceed the customers’ expectations.”

— George O’Brien

Autos Cover Story Sections

Awaiting the ‘Autohaus’

Michelle and Peter Wirth

Michelle and Peter Wirth

Michelle Wirth started her career with Mercedes-Benz as a mechanical engineer. Early on, after only a few visits to Stuttgart, Germany, where the cars are designed and manufactured, she learned that the company doesn’t build to industry standards — it creates an environment where engineers can design to their own, higher standards. These are lessons she and her husband, Peter, apply to their life and how they do business, especially with their new venture, Mercedes-Benz of Springfield, set to open next month.

Peter Wirth doesn’t know exactly how long it’s been since Mercedes Benz has had a presence in Western Mass. with a dealership.

He does know that it’s been … well, long enough.

As in, long enough that he knows he and his wife, Michelle, and fellow partner Rich Hesse have a lot of work to do in many different realms as they prepare to open Mercedes-Benz of Springfield on the site of the old Plantation Inn across from Mass. Turnpike exit 6 in Chicopee.

For starters, the partners in this nearly $12 million enterprise have to let people know that Mercedes is, indeed, back in the 413 more than a decade after a small dealership on Riverdale Street, this region’s auto mile, if you will, closed its doors, leaving area consumers to travel to Hartford or just east of Worcester to do business.

And they intend to get that job done in a number of ways, from intensive, targeted marketing to a grand-opening celebration (date to be determined), to some work within the community even before the doors open, to show that they are not just here to sell cars (more on that later).

But there is other work to do, and most of it falls in the category of showing just how much Mercedes-Benz — the company, the cars, and the brand — have all changed since the last time someone had the opportunity to buy or lease a new one in Western Mass.

“What I recognized is that we have to — and we love to — reacquaint people in our area of influence with the Mercedes-Benz brand; a lot has changed in 10 years,” said Michelle Wirth, who will oversee marketing efforts and other duties for the company, but started her career with Mercedes as a mechanical engineer. “There are something like 3,000 to 4,000 Mercedes cars in Western Massachusetts currently in operation. I don’t have exact figures, but I’m sure most of them are older, because people haven’t made the trek to Hartford or Shrewsbury or Albany pick up a new car.

“We want to make sure that those folks who are already convinced about the brand know we exist, and then reacquaint them with the new cars,” she went on. “The vehicles themselves have just transformed in the past 10 years.”

An architect’s rendering of the new Mercedes dealership

An architect’s rendering of the new Mercedes dealership, which will emphasize transparency.

By that, she was referring to everything from the number of models to the depth of the price range. For example, she pointed to the CLA, a Mercedes model that retails for under $33,000, a number that would likely surprise many people, including some who know cars — and Mercedes.

Other things that have changed since Mercedes models were last sold in this region include the carmaker’s focus on safety, and not merely luxury and style (although those are still points of emphasis, to be sure), as well as the dealerships in which the cars are sold and, especially, serviced.

Indeed, dealerships today are well-appointed, convenience-focused, customer-friendly facilities that exist not so much to showcase cars, although they still do that, certainly, but pamper those who buy them.

So much so that Michelle Wirth, as she described the process of designing, outfitting, and operating the facility in Chicopee, said the mindset is that she and her husband are not competing with other dealerships, necessarily, but against hotels, restaurants, and even the new $950 million MGM Springfield casino due to open in about a year, in the manner in which they are all focused on hospitality and taking care of the customer.

“When they walk away from a fine hotel establishment, people say ‘man, they did everything right’ — it’s just a feeling they have,” she explained. “When they walk away, they’re going to feel it, they’re going to feel, ‘wow, they care about me, and they took care of me. That’s the feeling we’re going to create.”

For this issue and its focus on auto sales, BusinessWest visited the dealership a few weeks before its doors are due to officially open to gain some insight into what the partners in this venture are anticipating as Mercedes makes its much anticipated return to the area.

A Major Coup

By now, most in the region’s business community are at least somewhat familiar with the story behind Mercedes-Benz of Springfield.

Back in late 2014, Peter Wirth and Hesse, owners of a Mercedes dealership in Nanuet, N.Y., were approached by the carmaker about bringing the brand back to Western Mass. with a dealership after that aforementioned lengthy absence, and after some extensive research, the two concluded that this region was, indeed, underserved, and that a facility here had considerable potential.

Especially at the site they eventually chose, two turnpike exits east of Riverdale Street, at the old Plantation Inn site. This location is literally across the street from where the tollbooth once stood, and at the eastern end of Route 291, giving the location great accessibility.

And it will be needed, because this dealership will have a huge coverage area, one that includes parts of four states: Western Mass., Northern Conn., Southern Vermont, and Southern New Hampshire.

That large swath of territory will bring some challenges, said the Wirths as they talked about their business venture — especially the large number of markets they must advertise in — but also a great deal of opportunity to better serve thousands of Mercedes customers.

“It’s a big area, and it’s a big task,” said Peter. “But it’s a huge opportunity for people in the Springfield metro area, who have to drive 45 minutes to Hartford, or almost an hour to Shrewsbury, the next-closest dealership, or an hour and a half to Albany.”

More than three years after those initial talks between Mercedes, Wirth, and Hesse began, the Western Mass. Mercedes dealership, or ‘autohaus,’ as such facilities are called in Germany, is nearly ready for prime time.

When BusinessWest toured the site in mid-August, the exterior of the dealership had been completed, and work was continuing inside. The projected opening date will be late September.

Like most of the dealerships being built, many of them replacing facilities 30 or 40 years old, this one will be spacious, well-appointed, modern-looking, and heavy on glass and metal.

There is a corporate identity and design standards for these dealerships, and they make them easily recognizable as Mercedes-Benz dealerships. There are certain kinds of columns, tiles, paint colors, and furniture that are pretty standard across the dealer network. But at the same time, we, together with Mercedes-Benz, worked on laying out the dealership in the way we know it’s going to work.”

And while the Mercedes corporation has a desired look and feel in mind that its dealers must create, there is plenty of room to personalize one’s autohaus, said Peter, citing, as just one example, the dealership’s car wash; Mercedes doesn’t require one, but the partners considered it a key part of the “experience.”

“There is a corporate identity and design standards for these dealerships, and they make them easily recognizable as Mercedes-Benz dealerships,” he explained. “There are certain kinds of columns, tiles, paint colors, and furniture that are pretty standard across the dealer network. But at the same time, we, together with Mercedes-Benz, worked on laying out the dealership in the way we know it’s going to work.

“That’s something that has now become specific to this site,” he went on. “Mercedes-Benz has ideas, but they will also take our input, and we’ve been very vocal in that process and made it our own. While we’ve been using their design cues, the feel and flow of the dealership is what we know works and will serve our customers best.”

Asked to elaborate, he said this dealership isn’t just open, it’s incredibly open.

Wirth said his office has four glass walls, and from it, he can see the front desk, the sales office, the lounge, and the service drive. In many ways, that office embodies the intended feeling of openness, ease of transition from one department another, and a word that’s becoming ever more prominent in business and politics today — transparency.

“It’s easy for customers to not just find their way around, but to transition from one department to another — we’re not compartmentalized,” he explained. “We don’t think of a dealership as a sales, service, and parts department; it’s one unit to us.”

Driving Force

As she talked about the new dealership, plans for it, and the level of service she and her partners plan to create, Michelle Wirth thought this was the time to discuss her career with Mercedes-Benz, which began soon after she graduated from Lehigh University with a mechanical engineering degree.

Peter and Michelle Wirth say much has changed in the decade since Mercedes had a presence in the area

Peter and Michelle Wirth say much has changed in the decade since Mercedes had a presence in the area, and they intend to reacquaint the region with the brand.

“I got hired right out of school and worked in environmental and safety engineering,” she told BusinessWest. “I went to Germany a number of times a year, and actually got to go to the design center in Stuttgart, where they design and build these vehicles. I got to learn — I didn’t know this when I walked in the door — that Mercedes doesn’t just build to standards. They rise above those standards, and they have a holistic approach to safety and a holistic approach to design.

“It’s more about ‘what’s the best solution for the customer,’ and that’s impressive,” she went on, “because it creates a space where engineers get to design to the best possible standard, not just the least common denominator. And that translated over to me. As a young person, eyes wide open, I learned a lot from that. It’s like a standard you set for yourself, and it’s the highest one around.”

This attitude, or mindset, permeates everything the couple does in life and in business, Michelle explained, adding that it shapes everything from how they’ll do in business in Chicopee to how they’re already getting involved in the community that will soon be home — to them and their business.

That involvement has taken the form of support for organizations ranging from Square One to Baystate Children’s Hospital, said Peter, adding that these endeavors are part of a culture the company wants to instill. In other words, rather than doing something that might be expected, such as simply meeting auto industry design and performance standards, they’re setting the bar much higher.

“It’s not just checking a box for us,” he explained. “If you can be involved with the children’s hospital, and you have four healthy children; that comes naturally to us. Yes, you’re getting your name out, but it’s also a natural contact point for us; we can help and do good at the same time.”

Meanwhile, back in the realm of car sales, the Wirths believe they have the right brand at the right time to go along with the right location and the right culture.

Indeed, while some luxury brands have struggled with making all-important connections with younger audiences, Mercedes has made inroads, if you will, by creating lower price points and getting younger people into its vehicles.

And once that happens, they often become customers for life, said Michelle, noting that Mercedes not only has one of the highest loyalty rates in the business, but one of the highest conquest rates (winning over the drivers of other brands) as well.

At the same time, the company has adjusted its marketing messages, said Michelle, to appeal not only to the young, but to those who want to think, act, and, yes, drive like the young.

“Now, the marketing focus is more on ‘young at heart,’” she explained. “That’s how we describe people; it’s ‘do you have that Millennial mindset? You may not be that age, but you have that mindset. By doing that, you broaden the audience that you’re speaking to.”

Getting in Gear

Given the huge geographic area it will be serving, Mercedes-Benz of Springfield will already be speaking to a very broad audience.

The initial message will be that Mercedes is back in Western Mass. after a decade’s hiatus. But soon — in fact, almost immediately — there will be much more to communicate: that Mercedes is back, and that this is a brand for both the young and the young at heart.

Also to be communicated, especially through a visit to the new dealership, is that this venture fully embraces that corporate culture of not merely meeting standards, but setting higher ones.

George O’Brien can be reached at [email protected]

Autos Sections

No Slowing Down

Mike Lapointe

Mike Lapointe says effective pricing and “making it easier for customers to do business” have been keys to success at Lia Honda.

Mike Lapointe said he considers himself an “outlier” in most respects when it comes to the automotive market and what’s happening within it.

He used that term in reference to everything from his ability to sell the generally older cars being traded in these days — a development he attributes to the market he serves as general manager of Lia Honda in Northampton (one with thousands of college students on tight budgets) — to the manner in which his dealership is defying what all the ‘experts’ projected as a somewhat down year for the industry.

“Our sales are up 130% as far as new-car business is concerned, so Honda is very, very happy with us,” he explained. “It was the opposite of what we expected; during the winter, we had record months, and in the summer, we ran into vacation season, and things slowed down quite a bit. But we’re maintaining above 100% of our new-car objectives.”

But while Lapointe may well be an outlier when it comes to those older used cars — many are a decade or more older and not retailable in most markets — that term doesn’t seem to apply to overall dealership performance, at least among the owners and managers we spoke with.

Indeed, while analysts were predicting that 2017 would be the year the bubble would burst in the auto industry — when a run of several successful if not record-breaking years would come to an end and the needle would starting moving in the other direction — that really hasn’t happened, at least not locally.

“We actually expected to start to see a downturn, and internally, we were trending for that,” said Carla Cosenzi, a principal with TommyCar Auto Group, which operates Country Nissan in Hadley, Country Hyundai in Northampton, and Northampton Volkswagen. “That was the rhetoric within the industry, but we’re not seeing that; we’re trending upward at all our locations this year.”

Don Pion, president of Bob Pion Buick GMC in Chicopee, the dealership started by his father, Bob, agreed.

“We’re having a very solid year — I can’t complain,” said the 40-year industry veteran. “Both Buick and GMC have good products out there right now, rates are still good, and all those things help us sell cars.”

Carla Cosenzi says TommyCar Auto Group

Carla Cosenzi says TommyCar Auto Group is seeing continued growth across all its lines, despite projections for an industry-wide downturn.

With one voice, the dealers we spoke with said the forces that were supposed to bring an end to the auto industry’s fun ride, or at least pump the brakes — and they include everything from uneasiness over the scene in Washington (and around the globe, for that matter) to the fact that many of those older cars had already been replaced — are there. But they haven’t had the expected impact.

“We read all those reports … have we hit the bubble? Are we starting to trend down? Every possible thing that could affect the business in a negative way — that’s what they’re predicting,” said Pion. “You read all that, and you think, ‘what’s going to happen?’ But we haven’t seen it. People are still coming in, and they’re still buying cars.”

For this issue and its focus on auto sales, BusinessWest talked with area dealers about what they’re seeing — or not seeing, as the case may be.

The Ride Stuff

When asked how his dealership and others in this region have fared so well when the industry was supposed to take a step back — and still might; projections for the summer were especially glum — Pion paused for a moment.

“You would need someone smarter than me to answer that,” he said eventually, adding that he’s only doing what his father said needed to be done when the industry analysts’ predictions weren’t rosy — and also when they were.

“He always said that you read all that stuff, those industry projections, and you put it away for reference,” he told BusinessWest. “But you come to work every day ready to do business.”

Indeed, while Pion and the others we spoke with said they were, and are, well aware of the predictions for a slower year, all they can do is respond to what they see out their windows, in the showrooms, and on their books.

And the numbers do not reveal a slowdown of any kind.

“We sold 150 cars in February, 140 in March, and 160 in April,” said Lapointe, adding that the average for a typical year at his dealership is about 110, and ‘150-car months,’ as he called them, are solid, to say the least.

Meanwhile, Pion said, so far this year, his Buick sales are up 24%, GMC is up 30%, and used-car sales are up 20%.

Cosenzi, meanwhile, used more words than numbers to convey pretty much the same information.

“We’ve continued to see growth. And usually, we don’t see that across all brands at the same time, but we’ve seen that this year,” she explained. “Usually, one will take off a little more than another, or one will have a new-product launch or something else that will create a little more excitement. But we’ve seen growth across all three.”

What’s driving this better-than-projected performance? There are a number of factors, said those we spoke with, ranging from effective pricing (Lapointe cited this as a key to Honda’s continued solid performance) to seemingly ample amounts of confidence on the part of consumers, to quality products — especially SUVs of all sizes and shapes.

At his Honda store, Lapointe said the keys to success are having inventory that appeals to buyers in the Five College market — again, Millennials on tight budgets — and going the extra mile, whatever that may be, to clinch a sale.

“We have to find new ways to do business,” he explained. “Other dealer groups may not take a deposit over the phone; they might force you to come into the store. Other groups might not give you a trade over the phone. Those would be outdated strategies for me. We do whatever makes it easier for the customer to do business, because the next guy won’t do that.”

As for what’s selling, while car sales have been decent, said area dealers, SUV purchases and leases continue to fuel the numbers cited earlier. Each carmaker now has such vehicles in the ‘small,’ ‘mid-size,’ and ‘large’ categories, and they all seem to be selling.

“The car market is still struggling somewhat, but the SUVs, from the smaller models right up to the full-size SUVs, are doing very well,” Pion said, citing solid numbers for models ranging from Buick’s Envision (a new product) to GMC’s Acadia (a larger model).

Cosenzi agreed, noting that the SUVs made by all three carmakers she handles are doing well, as are entry-level cars — those generally under $20,000 now — such as Hyundai’s Elantra and VW’s Jetta.

The Road Ahead

As he talked about the market moving forward, Pion said his plan, in most all respects, is to continue following his father’s advice.

That would be to read and listen to the analysts’ projections, put them away for reference, but show up to work ready to sell cars.

Thus far this year, dealers have been selling more than the forecasts said they would. And they believe the conditions are such that things will continue in this vein.

This won’t make them outliers, necessarily, but it will make them quite happy.

George O’Brien can be reached at [email protected]