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Discussion Starter #1
A long term dream of mine would be to own a factory authorized Lamborghini dealership. Beyond the franchise fees and what not, what obstacles exist in obtaining a license to sell Lambos?

Perhaps it is straightforward like Porsche or Mercedes, but I hear that owning an authorized Ferrari dealership is usually out of the question unless you have some personal relationship with the factory, or what not. Not sure if this also applies to Lamborghini, given it's exalted status like Ferrari.

I may be wrong. I saw some of the documents off of 400GT.COM, correspondence between a dealer owner and the factory (from the late 1960s/early 1970s), but it doesn't show the request for the license.

Please let the dream live! :)
 

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Discussion Starter #2
Nobody?

Nobody has anything to offer on this topic??

I'll remember all of your names on my Grand Opening invitation list!
 

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I would take the no response as, yes, it is hard to start a Lambo dealership. I would imagine Audi would want to promote within their Audi dealership network if they would need to fill a certain market with a Lamborghini franchise. Or, I would also surmise, unless you currently have a highend dealership experience, they (Audi) would probably not even consider you as a candidate for their Lamborghini franchise.
 

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Santa Monica BMW and Beverly Hills Porsche/Audi do quite well. You'd probably make more money with an authorized Ford dealership than a Lamborghini dealership due to sheer volume of cars and repair. For this reason most exotic car dealerships sell a little bit of everything exotic.
 

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If you pick a location they want a presence in, and you show you have the finances and resources (showroom etc ) it wouldnt be very difficult at all.

If you want one in NY or something, then it would be extremely hard.

They are like any other company, if it makes business sense they'll go for it.

It does take serious finances though. They want a showroom and staff of the calibre to progress the brand. Also you'll be expected to keep a few colours of each model on the floor for test drives etc. Replacing them every year. Your staff will need to be trained.

This is what I was told by the dealer I bought mine from. He said most dealerships start of as unofficial. And then once they demonstrate the client base, and fullfill the requirements over some time, they get the official stamp. After the first one it then becomes easier to get other dealerships in better locations.
 

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Discussion Starter #7
KMS: Perhaps you can make more money selling volume Fords, but I'd rather own a dealer where the cars sell themselves ;)

With regards to dealerships selling a bit of everything, are there conflicts with having a Lamborghini and Ferrari showroom under one roof? BMW & Mercedes?

I have seen these conglomerate dealerships split up in separate buildings though. One particular that comes to mind sells MB, BMW, Lexus, Acura, and Bentley.

5_TO_1: Good background info (BTW, is 5 to 1 an ode to the DOORS?). It seems like it is best to get the info straight from those who operate the business. You make a great point about "if it makes business sense", they'll do it.

Serious finances and resources are understood, as well as the need to have a trained staff. But remember, we're car guys, not car salesmen. Not every salesperson at an exotic dealership knows much about their product....

Lastly, you mention the need to have cars of various colors on the floor. If they're all financed, shouldn't be a big deal :)


Thanks for the info guys.
 

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Neither Ferrari nor Lamborghini would be happy about being under the same roof as a new car dealership. Just wouldnt work. Maybe if you were Roger Penske you could make it happen. SouthBay BMW and SouthBay Mercedes Benz are about ten miles or so apart in SoCal for example but have the same owner. Any number of exotic car dealerships have all makes and models under one roof as they sell them used or have cars on consignment from their owners. Places such as The Auto Toy Store in Florida, Symbolic in San Diego, and 310 Motors in Los Angeles come to mind. Pick up the Dupont Registry magazine for some research to see who is doing what.

I can't recall any sales personel that didn't know what they were selling when it came to exotic cars. I know of a salesman that knows everything about the models he sells but will quickly claim ignorance if he suspects some prospective buyer is just a "talker" and attempts to bog him down in silly semantics. He has no time to waste with you, he is selling you a car whether it's your dream vehicle or every day transportation. Car guys often don't last that long in the business because the primary goal of having him or her sit behind that desk in the showroom is to sell cars, not bulls*t with tire kickers and/or real customers.
 

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Discussion Starter #9
business is business, but it's not like you have dramatic traffic to attend to in a high end showroom...right?
 

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BRASIciLy said:
business is business, but it's not like you have dramatic traffic to attend to in a high end showroom...right?
Actually Lamborghinis are used in many instances to "create" showroom traffic.

If you look at someone like The Nelson Auto Group, dealers like that sell Lambos specifically to create "showroom traffic" to, in reality sell the lower end cars.
 

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BRASIciLy said:
5_TO_1: Good background info (BTW, is 5 to 1 an ode to the DOORS?). It seems like it is best to get the info straight from those who operate the business. You make a great point about "if it makes business sense", they'll do it.

Serious finances and resources are understood, as well as the need to have a trained staff. But remember, we're car guys, not car salesmen. Not every salesperson at an exotic dealership knows much about their product....

Lastly, you mention the need to have cars of various colors on the floor. If they're all financed, shouldn't be a big deal :)


Thanks for the info guys.
Yep, thats where 5to1 comes from :)

I don't really mean training in terms of knowing your engineering. More that they'll expect your staff to know they're lambos. And how they like them to be sold. etc........ You know, the normal corporate BS homoginisation crap.

Having the cars on the floor is costly. Think about it. You'd be expected to have a couple of Murci's and more Gallardo's just sitting on the lot. And replace them every 6-12 months.

Wether its your money or the banks thats gonna cost you.

Moreover, they have to be various colours and specs. So you may find it difficult shifting the less popular combo's later. Plus you have to maintain cars that customers whip around with little regard.

Obviously dealerships get somewhat of a discount on these cars. And if the model is popular there's no problem, becos you can shift it easily when you have to replace it.

The problem comes when a model flops. The Vanquish is a good example. It was the hottest thing since some caveman rubbed two sticks together. But problems with reliability and competition soon cooled the market. Now what do those dealers do with those demo cars?

Not much fun being stuck with cars that are selling for 30-40k GBP below list after 1 year (and thats dealer pricesand good colour combo's). Especially if your expected to buy a couple every 6 months as demo cars, and in some stupid combo aswell.
 

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Here's a post from another website, similar question.

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)
 
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