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June 2010
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Cartier, Tiffany, Audi? A new kind of style
Audi's upscale outlet while new dealership is built
by Mark Rechtin for Automotive News

Most car dealers like to be as specific as possible when describing store location in their advertising, using lines such as: “We’re situated where the 405 and 5 collide.”

But for The Auto Gallery Audi in Canoga Park, Calif., it’s more like: “Go in the back way at Neiman Marcus and hang a left at women’s handbags.”

The Auto Gallery chose to locate its Audi showroom inside Westfield Topanga, an upscale shopping mall in the San Fernando Valley, until a permanent store is erected a mile away on Ventura Boulevard.

Both financially and logistically, that made better sense than working out of a double-wide trailer while construction equipment roared nearby. In fact, it has worked out so well since the store opened in December that Auto Gallery’s principals are considering keeping the mall store as a satellite sales center after the $10 million Audi dealership opens in August.

“The facility we had was dreadful; people didn’t even know it was an Audi dealership,” said Tony Schwartz, co-president of Auto Gallery, which also sells Porsche, Maserati, Ferrari and Lamborghini. “But we had been waiting seven years for permits [for a new dealership]. We had to find an alternative.”

Breakfast at Audi?
Schwartz, who is careful to refer to the mall location as “a showroom, not a facility,” said the rent is not inexpensive but is cheaper than operating out of a trailer at a street location.

Schwartz was wowed by the demographics of potential customers roaming the mall, where 14 million shoppers a year walk down the corridor of elite storefronts that include Tiffany, Cartier, Louis Vuitton and Salvatore Ferragamo.

The mall also brings more shoppers from outside the area than would normally visit a car dealership. The shopping center previously displayed Audis in its walkways. But the relationship expanded when prime retail space opened next to Neiman Marcus.

Usually, five or six Audis are displayed in the 5,700-square-foot showroom. The aim is to represent each Audi vehicle. But Westfield Topanga has dedicated a big chunk of the covered parking structure to the rest of the vehicles in inventory, which are brought around by a porter for test drives.

“The showrooms make an exciting and progressive addition to the luxury wing of Westfield Topanga,” said Erick Klaster, senior general manager of Westfield Topanga and Promenade.

The Auto Gallery Audi is a sales-ready environment, complete with an accessories area. The back door of the showroom leads shoppers to the valet parking circle, where cars are delivered for test drives. But the pitch is definitely lower-key than at a traditional dealership.

“People just trip over us here,” said Lonnie Decker, chief marketing officer for The Auto Gallery. “We are planting seeds with people who haven’t put Audi on their shopping list. They may not be in purchase mode now, but we can get their contact information now.”

The Auto Gallery also has a Lamborghini showroom next door to Audi in the mall. The Lambo outlet, which is 3,800 square feet, will stay even if the Audi showroom doesn’t.

“It will be a permanent location for at least the next several years,” Schwartz said. “It’s a destination showroom, and we don’t have to pay for bricks and mortar.”

Most visitors to the Lamborghini showroom just want to gawk, although Schwartz said the store has a slightly more liberal test-drive policy than most exotic dealerships. But for most people, the dealership is a place to purchase Lamborghini logo merchandise, such as backpacks, T-shirts and baseball caps.

Not that the Westfield Topanga Audi showroom isn’t selling cars.

The store’s previous Audi store, at the Ventura Boulevard location, typically sold 50 new vehicles and 20 used vehicles a month. In the shopping center it’s more like 40 new and 20 used, but that’s in a down economy. The new store on Ventura is expected to sell 70 to 80 new vehicles and 30 to 40 used ones.

Vince Scandone, Audi’s Los Angeles area general manager, said the benefits outweigh the difficulties.

“It’s not a traditional path” for car buyers, Scandone said. “You don’t get the drive-by. You don’t have a used-car display. You don’t have the curb appeal. But you do get the benefits of shoppers who wouldn’t go into an Audi dealership, and the next thing you know Audi is now on their list.”

Operating out of a mall makes for some logistical, storage and insurance issues. Scandone admits Audi would not approve the shopping center location as a long-term home. But as a temporary solution, it has worked.

An added benefit: The mall’s parking lot provides an excellent gathering place for “Supercar Sunday,” a get-together of Audi gearheads and their cars sponsored by the dealership. Some Sundays the event attracts as many as 1,000 people, many of whom then wander over to the showroom.

And if the rest of the family is bored, there are countless other stores where they can pass the time. Decker says: “They can make a day of it.”

Stephan Winkelmann, president and CEO of Automobili Lamborghini with Tony Schwartz, co-president of Auto Gallery

Published by The Auto Gallery
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