By: JULIA M. SCOTT on March 22, 2007
Original Article: DAILY NEWS (LOS ANGELES, CA)
Mar. 22–NORTH HILLS — On the surface, car dealer Galpin Ford’s decision to devote an entire showroom to a car that has not been selling well seems counterintuitive.
Sales of Mustangs dropped 19 percent in January and February compared with last year as the newness of the latest Mustang model wore off and buyers waited for the next model to come out.
But showcasing the iconic sports car is a smart move, several analysts said.
“You have to look beyond Mustang sales,” said Kevin Tynan of Argus Research Corp. “If you open a Mustang showroom, you become a beacon for Mustang enthusiasts.”
In other words, fans will come to ogle Mustang eye candy, creating the buzz and foot traffic that is the lifeblood of a dealer.
The move already seemed to be working on Wednesday, the opening day of the showroom.
An hour before the start of an autographing session, dozens of Mustang fans had filled up the parking lot with models dating back to 1970. Many said they came for the signature of race car driver Steve Saleen, whose latest design was on display in the showroom.
Saleen and race car driver Parnelli Jones customized the 2007 Mustang that is named after them. It is one of 500 made and sells for $60,565.
Michael Shore came with his father, Allen, from Simi Valley to meet Saleen. Shore, a business major at California State University, Northridge, said he wasn’t going to leave until he had Saleen’s signature.
“It’s kind of inspiring because he started as a race car driver and a car enthusiast,” said Shore, 20, as he snapped pictures of Mustangs parked next to his black 2000 Saleen Speedster. “And he built this whole empire.”
Inside, banners dotted the chrome-laced showroom, which used to house sport utility vehicles and trucks. Three Mustangs were parked in the bright, airy space.
Saleen and Jones were on hand to toot the car’s horn.
“What’s unique about this car is literally everything,” said Saleen as he pointed out dual-colored leather seats, a race car suspension system, and two names scrawled on the dash. Both he and Jones signed each of the 500 cars.
Devoting an entire showroom to a single model is unusual, but not very expensive if you have enough space. All it takes is switching the cars and slapping up a few posters.
“It’s an option that a mega dealer can look at,” said analyst David Healy of Burnham Securities Inc.
Galpin certainly has the space. Its sprawling campus in North Hills stretches across 60 acres.
Galpin is the No. 1 Ford dealer in the country and also sells the most Mustangs, according to George Pipas, Ford’s domestic sales analysis manager. The nationwide decline in Mustang sales, which was similarly felt at Galpin, is part of a bigger trend in the coupe market, he said.
“It’s not just a Mustang thing,” Pipas said. “The whole category was off 38 percent.”
The dedicated showroom will help turn those figures around at Galpin. Aside from attracting potential customers, it will help the dealer hone its sales pitch and focus Mustang hype, said George Peterson, president of the consulting firm Auto Pacific in Tustin.
“Your salespeople can be trained very strongly on Mustang and its basic competition so they can do a more effective sales job,” Peterson said.
The showroom will also increase revenues of aftermarket wheels, stereos, performance-enhancing parts, and paint jobs that Galpin sells at its Auto Sports center.
Total revenues from aftermarket products may not be a significant factor, but the profit margin is incredible, analyst Tynan said.
Mustangs are the No. 1 car Galpin customizes, said Vice President Beau Boeckmann.
“It’s one of those cars that people love to customize and make their own,” said Boeckmann, who appears on MTV’s “Pimp My Ride,” which is filmed at Galpin’s Auto Sports center.
Chris Lawson was looking at the customized Mustangs parked in front of the showroom Wednesday evening. She has had “six or seven” Mustangs in her lifetime.
“I have been in love with Mustangs since I was 10 years old,” said Lawson, a 45-year-old caregiver who lives in Reseda. “Take the rest of them and leave the Mustangs behind.”