Automotive News - September 1, 2008 - (Page 21) SEPTEMBER 1, 2008 • 21 service & parts Despite tough times, Galpin profits by pimping rides Alysha Webb awebb@crain.com It’s a GAS Prices charged by Galpin Auto Sports for customization services Wheels Grille Navigation system Custom-designed leather seats Hot tub in pickup bed Source: Galpin Auto Sports LOS ANGELES — While auto sales slump, Galpin Auto Sports’ customization business is thriving. A division of Galpin Motors Inc., Galpin Auto Sports tricks out thousands of cars and trucks each year for the parent company’s seven dealerships in the Los Angeles area. The business adds as much as $500,000 in monthly revenue, said Beau Boeckmann, 38, president of Galpin Auto Sports and vice president of Galpin Motors. “Times are tough right now,” Boeckmann told Automotive News, “but the people who can afford it still want what they want.” Galpin Auto Sports jobs, featured on the MTV cable network’s reality show “Pimp My Ride,” range from a set of wheels with huge chrome spokes to a hot tub in a pickup bed. The business has created its own marketing brand — a Galpin Auto Sports-customized vehicle is said to have been “Galpinized.” Other dealerships may not have tuner shops to match the Galpin Auto Sports showroom, down the block from Galpin’s giant Ford dealership in the San Fernando Valley. But Boeckmann said customization offers a profit opportunity for franchised dealerships of varying sizes. $100 to $2,500 per wheel $400 to $7,500 $1,200 to $2,500 $1,500 and up $30,000 ‘Going to grow’ Last year, U.S. customers bought $38.1 billion worth of auto accessories, the Specialty Equipment Manufacturers Association reports. Between 1996 and 2006, the market grew by an average of 7 percent a year, said SEMA spokesman Peter MacGillivray. Franchised dealerships have just a tiny fraction of the customization market, MacGillivray said. But when dealerships start promoting customization extensively, he said, “our business is going to grow exponentially.” Galpin Auto Sports customizes about 500 vehicles a month, Boeckmann said. About 350 are at customers’ requests; the rest are projects Galpin Auto Sports tackles to show off its abilities. Most of the cars and trucks Galpin Auto Sports customizes come from Galpin dealerships. Boeckmann said Galpin Auto Sports customers often end up buying new vehicles from Galpin dealerships. “That was part of the reason for bringing other makes and models to GAS,” he said. The cost of Galpinization varies widely. The owner of a small car might spend $1,200 for an audio system. An entertainment system and new wheels for an SUV can cost as much as $10,000. Customizing a corporate promotional vehicle with, say, a living room and a bar could run $100,000. And while profit margins on factory parts used for customization are about 20 percent, Boeckmann said, margins on nonfactory parts are as high as 50 percent. “I have a grille over at GAS that has a bigger margin than many of the cars we’re selling,” Boeckmann said. Factory ties Galpin’s Ford dealership in North Hills, Calif., is one of the world’s largest. When Ford Motor Co. last year formed a dealer panel focused on customization, Boeckmann was a charter member, said Al Giombetti, executive director of Ford’s customer service division. Panel members such as Boeckmann “push us to be more aggressive, especially in body kits.” Giombetti said. “They push us to get into technology such as electronics and wheels.” This year, Ford launched a line of customized accessories it sells at dealerships and online. At Galpin Auto Sports, wheels are the most frequently customized part, Boeckmann said, and the Ford Mustang is the most customized vehicle. “You can probably configure a Mustang in a million ways,” he said. Galpin Motors, a customization pioneer, has been in the business since the 1950s. The company formed Galpin Auto Sports in 2006 to boost its margins by buying specialty parts directly from suppliers. While the rewards of customization to dealerships are great, Boeckmann said, so are the risks of the “extremely complicated” business. Dealerships must find reliable vendors and experienced employees, he said. But Boeckman said all dealerships can offer at least simple customizations, such as wheels, tires, body kits and stereo upgrades. “It is what customers want these days,” Boeckmann said. “And when customers want something, they are willing to pay more for it than when they need it.” c GAS’ Beau Boeckmann: “People who can afford it still want what they want.” ® Guarantee offer for first time customers only. Guarantee offer requires specific written agreement. Call for details. ACTION INTEGRATED MARKETING PROVIDES FULL-SERVICE & EVENT MARKETING SOLUTIONS FOR DEALERSHIPS NATIONWIDE Web service leads grow Donna Harris dharris@crain.com Online customer leads from service-oriented Web sites offer a growing source of business for auto dealers. This spring, General Motors Service and Parts Operations began funneling service leads to its dealers. GM is expanding those leads to include Web searches for tires and accessories. An independent Web site, www.DriverSide.com, launched in June, as did www.RepairPal.com, another independent. Both target consumers who are shopping for parts and repairs. Within the next three months, GM says it will send dealers online contact information for customers who have expressed interest in tires. In the next five months, GM will forward inquiries to dealers from people interested in accessories. “Tire inquiries are at the top of the list of online inquiries,” says Melody Schuette, director of digital marketing and customer relationship management for GM Service and Parts Operations. “Accessories requests are up there as well.” GM sends dealerships leads from its OnStar vehicle diagnostics system and from customers who call GM seeking parts and service. Online leads also come from prospects who request service appointments and parts on dealer Web sites. RepairPal.com offers online repair estimates and provides a list of repair shops within their ZIP codes. Consumers can rate the shops they visit. DriverSide.com is in a testing phase, the Web site says. It provides opportunities to buy and sell vehicles as well as to shop for parts, accessories and service. c http://www.jcowansprotalk.com http://www.DriverSide.com http://www.RepairPal.com http://RepairPal.com http://DriverSide.com http://www.jcowansprotalk.com
Table of Contents Feed for the Digital Edition of Automotive News - September 1, 2008 Automotive News - September 1, 2008 'Mr. Big Volume' hit again Auto ad spending plummets American Axle to grow outside U.S. Nissan, Renault aim to share more parts Steven Ribet joins Automotive News in Shanghai Salaried workers face the ax Asbury to challenge verdict Lutz wants loan guarantees VW passes Ford as No. 3 global seller in 1st half Suzuki in disguise Dodge hopes smooth ride of coil springs will distinguish Ram Candidates split on union organizing bill Check in the mail? Toyota, Ford can tell 10 CTS stays true to concept GM shifts some vehicle design work to U.S. Infiniti may add cars, big and small BMW slashes production of big engines Toyota cuts sales forecast Chrysler: Viper lures suitors Honda hybrid plan bets big on small cars Ford starts L-M consolidation meetings Obama renews aid offer — industry wants it now Honda taps rainwater to create wetlands U.S. loans could make sense, but can't be a bailout Wanna buy a car? Wanna buy a brand? PPG story recalls Exner's Imperial Toyota goofed on Scion; is Prius next? Editor grows up; import vet pleased Field reps blamed for GM's problems Honda Insight engine isn't noiseless Trucks, Vette fine; rest of GM, blah Reynolds to dealers: Replace aging servers by year end Saddle up! Dem delegates honor slain Arkansas dealer Kia makes a mark of its own Koreans step up; Indians step cautiously; Chinese step back The next batch of new Hyundais: Smaller, more fuel efficient To give fuel economy a boost, Hyundai spends big on r&d U.S. plans fizzle for most Chinese vehicles Mahindra delays U.S. retail launch until 4th quarter of '09 Dealers Personnel Despite tough times, Galpin profits by pimping rides Web service leads grow Uh, I didn't mean to say you should retire Remembering Phil Hill, racing's modest giant Mulally to speak at gadget show GM picks Volt battery supplier Split verdict in fraud case July auto output was up in Japan Bob Fisher Dems reopen the CAFE Hummer, king of the desert? MG remains a no-show in North America Mustang silly Protests could bring ta-ta from Tata The politicians (and I) need a new road map Welburn's design journey began in Philly Automotive News - September 1, 2008 Automotive News - September 1, 2008 - (Page Intro) Automotive News - September 1, 2008 - American Axle to grow outside U.S. (Page 1) Automotive News - September 1, 2008 - American Axle to grow outside U.S. (Page 2) Automotive News - September 1, 2008 - Suzuki in disguise (Page 3) Automotive News - September 1, 2008 - 10 CTS stays true to concept (Page 4) Automotive News - September 1, 2008 - 10 CTS stays true to concept (Page 5) Automotive News - September 1, 2008 - Chrysler: Viper lures suitors (Page 6) Automotive News - September 1, 2008 - Chrysler: Viper lures suitors (Page 7) Automotive News - September 1, 2008 - Obama renews aid offer — industry wants it now (Page 8) Automotive News - September 1, 2008 - Obama renews aid offer — industry wants it now (Page 9) Automotive News - September 1, 2008 - Honda taps rainwater to create wetlands (Page 10) Automotive News - September 1, 2008 - Honda taps rainwater to create wetlands (Page 11) Automotive News - September 1, 2008 - Field reps blamed for GM's problems (Page 12) Automotive News - September 1, 2008 - Field reps blamed for GM's problems (Page 13) Automotive News - September 1, 2008 - Trucks, Vette fine; rest of GM, blah (Page 14) Automotive News - September 1, 2008 - Saddle up! (Page 15) Automotive News - September 1, 2008 - Dem delegates honor slain Arkansas dealer (Page 16) Automotive News - September 1, 2008 - Koreans step up; Indians step cautiously; Chinese step back (Page 17) Automotive News - September 1, 2008 - To give fuel economy a boost, Hyundai spends big on r&d (Page 18) Automotive News - September 1, 2008 - Mahindra delays U.S. retail launch until 4th quarter of '09 (Page 19) Automotive News - September 1, 2008 - Personnel (Page 20) Automotive News - September 1, 2008 - Web service leads grow (Page 21) Automotive News - September 1, 2008 - Web service leads grow (Page 22) Automotive News - September 1, 2008 - Web service leads grow (Page 23) Automotive News - September 1, 2008 - Web service leads grow (Page 24) Automotive News - September 1, 2008 - Uh, I didn't mean to say you should retire (Page 25) Automotive News - September 1, 2008 - Uh, I didn't mean to say you should retire (Page 26) Automotive News - September 1, 2008 - July auto output was up in Japan (Page 27) Automotive News - September 1, 2008 - Bob Fisher (Page 28) Automotive News - September 1, 2008 - Bob Fisher (Page 29) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 30) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 31) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 32)
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