AlexL.

Has anyone looked into the possability of owning a Porsche Dealership? I've heard that they are not opening any more dealerships in the USA due to saturation. Any truth to this?

Also, I would imagine the costs would be quite high, has anyone ventured far enough to have any figures that would be required to open such a venture?

Damian in NJ

I read somewhere they have targeted new locations in the US, so they're not saturated yet.

perrys7342

Oh My...I presume you haven't also seriously considered buying new deck chairs for the next sailing of the Titanic!

Seriously, as someone who grew up in the retail automobile business (new and used cars) and spent fomative years in that business ,you need to consider this extemely carefully, and this forum is not the best place to start (and I've owned a Porsche for over 42 years).

I've known many "outsiders", successfully real estate people, bankers, lawyers, doctors, big time farmers (you name it ) who have been "longtime auto enthusiasts" who have accumulated significant capital and said "gee, that looks like fun...) and failed MISERABLY! Their shocking experience and rapid bleeding of what they believed were sufficient cash reserves make the recent blood letting in the dot-com business sound like a pleasure boat cruise by comparison.

You have not stated anything about your background and experience, so the following are "general" guidelines or warnings about considering such a venture:

1. The "Buy-In" or "Total Ownership" of a successful profitable dealership would run from $2.5 million to $20 million with an equivalent line of credit. Note that this is for fixed assets (parts, equipment, signs, etc) and "blue sky" ("goodwill" the value of an ongoing business) only. It does not include real estate or any residual used car inventory. Check the Automotive News web site (www.autonews.com) to get an idea of current dealership listings for sale or brokers handling sales.

2. The manufacturer (Porsche, BMW, MB, GM, Ford) will have franchise agreements for qualifications (experience, financial, etc) you must meet. In their eyes, you can be an "owner-investor" without retail automobile experience as long as you have, or retain, a "successful" management team. IGNORE 99 percent of what the manufacturer says...they don't know a *&%$$*##-thing about most aspects of the retail automobile business. They know manufacturer to wholesale operations only...beyond that they are largely ignorant (and repeated prove it when they try to run a "profitable" so called- "factory store). Remember, they are paid "upfront" or short term net, you are depend on the daily "market" conditions.

3. You must have successful "TOTAL" business operations and finance experience for all aspects from the "front" (sales, business operations) to the "back" (service facility, body shop, etc) to be successful. You can have been recognized by the manufacturer with multiple sales awards ("floor knowledge) and think you will succeed and can FAIL MISERABLY! You can be a successful independent Porsche repair shop operator and FAIL MISERABLY! You must have a business plan and honestly judge your own abilities against all aspects down to the lowest level of knowledge (ie, how much does it cost to wash a customers car? What's the expense for disposables, like shop rags, etc., whats the parts inventory turnover and obsolete rate?, etc). You must constantly focus on cost control and the "back end" without over reliance of sales and revenue.

4. You must have extremely dependable and reliable business associates and suppliers that you can count on for advice and assistance both professional and financial.

5. You must have an extremely stable family environment. The automobile business is one in which you can experience an emotional rollercoaster...highs from successful sales, dealer introductions, etc. to extreme lows (operating losses, loss of valued customers or business reputation, unanticipated expenses, etc) all on a repeated "up and down" 30 day (or less) cycle. Spouse, child problems, depression, alcohol or substance dependence are all too common in this business.

Porsche, Ferrari, Lamborghini and to a lesser extent BMW, MB, Audi are "niche" dealerships that are often spin-offs of a larger successful dealer group operations. Except for those that built "stand alone" Porsche dealerships from scratch in the 1960's, a "stand alone" Porsche dealership is an extremely risky business venture of high fixed overhead and uncertain future revenue streams.

I would strongly encourage you to "dip your toe in the water" rather than "jump in head first" (the rosy reflection may be from the bottom of a largely empty pool!). Work in a Porsche dealership, learn every aspect, particularly about the "back end" even if you a a successful sales person. Look at flooring cost, banking finance arrangements, balanced manning by departments (productivity). If you do decide to go ahead, look for a "buy-in" arrangement with some clear contract arrangements, rather than a total "buyout". An owner without heirs or someone a few years from retirement may provide you a learning opportunity that would be invaluable in any decision.

Apologize if you already know all this or the impression it's all generally negative...like any business, it has both pros and cons for any investor particularly if you're an "outsider" or "glamour gumshoe" (successful salesman).

Regards,

Perry (42 plus years of Porsche Ownership)

hacker-pschorr

A new Porsche dealership is openeing next spring in Appleton Wisconsin.

John Bergstrom has plenty of experience, shouldn't be a problem for him:

http://www.bergstromauto.com/

tetzlafh

Great now there will be a lot of Cayenne Mom's running around GB and the Fox Valley area saying they have a Porsche. Hacker what do you thinkk will be Bergstrom's biggest selling P-car? I'm thinking the Cayenne will be the choice.

harrY

hacker-pschorr

Boxster's will be up there with the Cayenne. Word around the camp fire is Bergstrom has been trying for over 20 years to get the P-car dealership away from Beim. Who hasn't had the Porsche dealer open for over 20 years. It will be fun to have a place to go look at all the new Porsche's less than 30 minutes away. I'll never take my car there.

tetzlafh

..Man to think when GB and the Fox area has p-cars..are Porsche's "exclusive" anymore? I'm just saying that because I always will know Brown county area as the Fleet Farm kind of crowd. i haven't been home too long for almost 5 years now so maybe GB has grown?? By the way why won't you ever take your car there, Bergstrom not the greatest? And i never knew that Beim was a Porsche dealer. I remember seeing last time i drove down to Appleton that Bergstrom are a Lexus, Jag dealer as well and Chevy too right?

harrY

hacker-pschorr

Bergstrom sells everything except the super exotics (lambo, ferrari, bugatti etc...) I can't count how many dealerships he has. Oh, almost forgot, he doesn't have Audi, Hundai, VW, Mitsu. Those are the old Beim dealerships now owned by Van Dyn Hoven.

How long has it been since you've been here? The PCA of the Fox Valley had 150 or so members in the early 90's. Per the DOT that wasn't even a fourth of the total P-cars in the valley, not counting Green Bay. The number of exotics in GB does not compair to say Chicago. But for the area and size, it's not bad. My mechanic see's a few Lamborghini's and Ferrari's each year. Not just old one's either. This year a Diablo, 550 Ferrari and 456GT Ferrari as well as a few 308's dropped in. I know of 3 other Diablo's in GB alone other than that one.

Berg's service deparments are not bad, but I'm not paying the $100 per hour I'm sure they will charge.

fixnprsh

The probable case now is if you dont own one, you never will. Even if you had arab oil prince money, its still porsche's call if you can purchase an existing franchise.
As far as a new dealer, you would havee to have several names well known to PCNA on your payroll and millions in cash up the wazoo before they would even consider it
If by some chance they give you a shot, you and the entire "crew" would have to go where ever in the country PCNA would dictate you open shop.
I know of only ONE dealer that is in trouble and might be for sale in the very near future. But we shouldn't start rumors.

MoneyBiz

You need a partner aka frontman.

Moogle

perrys7342 i loved reading your admittedly rather 'glass is half empty' description of the car dealership business

very insightful and well written!

guess its not so easy and not all glamour

fixnprsh

maybe Rennlisters should pool together and buy one, hmm I can see the sign "Rennlist Porsche" off the expressway

Moogle

if i invest, i would want my fair share of the profit, and no share of the headaches.

gerry100

What Perry said is true for any business. You need to bring more than just money, you need knowledge of the business to compete and a lot to complete successfully. I've sold to small businesses for a long time. The successful owners know the overall business and have mastery of at least one of the major skills ( sales, finance. production etc).

When the economy is overheated ( aka Y2K) , just money works For a short time.

The Porsche dealership concept is just too sexy.

shmucklebuckle

haha, I'm in I've got...hm...yep, about a hundred bucks I could invest with!