Auto dealer on fast pace for expansion

GREELEY — Weld County car dealer John Chamberlain has accelerated plans to build his Champion Auto Group into a regional powerhouse.

Chamberlain is near transactions that would add three more car franchises to his Northern Colorado holdings. Furthermore, he’s about to close on two dealerships in the Kansas City, Kan., market.

Currently, Chamberlain and partner Roger Wiebel own Champion Dodge in Greeley and Champion Chevrolet in Windsor, which together gross about $110 million in annual sales.

Deals are in the works for Champion Auto Group to win Greeley-area rights to both Mazda and Hyundai franchises, Chamberlain confirmed. In addition, Champion is close to bringing Greeley Kia, 717 6th St., into the fold.

“We’re just waiting to close” on the Kia deal, Chamberlain said. Under terms of the deal, current Greeley Kia owner Dean Juhl would keep partial ownership of the franchise.

The expansion plans are in step with Chamberlain’s other grand venture — construction of a first-of-its-kind auto mall in Windsor. Chamberlain has previously announced plans for a 60-acre development to house up to eight different car franchises at the interchange of U.S. Highway 34 and Colorado Highway 257.

“It looks like everything is on schedule for us to break ground in September,” Chamberlain said. On that basis, the auto mall would be ready to open by the spring of 2005.

As planned, the first phase of the auto mall will start with four Champion dealerships.

Chamberlain intends to relocate Champion Dodge, 2501 35th Ave., and Champion Chevrolet, 9050 Colorado Highway 392 in Windsor, to the auto mall site. The new Mazda franchise would also set up at the auto mall.

The fourth occupant hasn’t been decided. Chamberlain’s considering moving the new Hyundai franchise into the existing Champion Dodge location, in which case the Kia dealership would shift to the auto mall.

Chamberlain’s also showing ambitious plans in other markets. Already the owner of a dealership in Indianapolis, Ind., he’s taking over the current Jay Wolfe Chevy Chrysler Jeep dealership in Kansas City, Kan. Daimler-Chrysler has also picked Chamberlain to start a new Chrysler franchise in nearby Olathe, Kan.

And he’s seeking more opportunities, often when manufacturers want to match him with dealerships that are on the market.

“I’ve looked at eight stores in the last 60 days,” he said.

Loveland auto mall on tap

The auto mall trend has also captured the attention of McWhinney Enterprises in Loveland. The developer has set aside 30 acres for a car complex at the north end of the Centerra development, near the interchange of Interstate 25 and Crossroads Boulevard.

As planned, construction on the site could start by the spring of 2005.

“We don’t have any written letters of intent (for specific dealerships),´ said Peter Coakley, vice president of real estate for McWhinney. “We’re working on one right now.”

Coakley expects a blend of existing dealers who would relocate to Centerra, as well as new brands which aren’t located in the Fort Collins-Greeley-Loveland vicinity.

“Clearly, having the exposure along I-25 is a benefit,” Coakley said. “Sixty-thousand cars a day are going by on any particular day.”

Coakley believes the auto mall site could accommodate up to six dealerships.

The auto mall concept differs from the common practice of auto clusters, in which various dealers intentionally build close together.

Auto malls feature park-like settings, and are designed for pedestrian access between dealerships. The Champion Auto Group project, for instance, calls for ponds and heavy landscaping. Other malls have test tracks for customers to simulate off-road conditions.

The mall concept “is much better than 20 or 30 years go, when all they (car manufacturers) cared about was big show rooms and lots of cars out front,´ said Bill Barrow, executive director of the Colorado Automotive Dealers Association.

Chamberlain expects the mall approach to help him economize on costs such as advertising, and back-office operations.

The industrywide average for net earnings, before taxes, is 1.8 percent. “These (auto mall) dealerships do 3 percent,” Chamberlain said.

The primary difficulty for developing an auto mall is attracting dealers.

Chamberlain would seem to have part of that solved by rolling up his own family of dealerships. But independent dealers may not be eager to relocate.

The concentration of existing dealerships on South College Avenue in Fort Collins already provides some of the customer convenience that auto malls aim for, said Mike Dellenbach, owner of Dellenbach Chevrolet.

“If we were miles apart, there may be a difference,” he said.

In addition, dealers are cautious about risking the investment they’ve already put into existing facilities, Dellenbach said.

Also, franchise boundaries are delicately managed by the manufacturers, which makes relocation problematic.

“A whole bunch of questions need to be asked,” Barrow concurred.

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