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Auto dealers' work boosts local economy


Renovations, new dealerships good signs in rebounding industry

After 56 years in business in Beaverton, the Herzog Meier Auto Group is making one of its biggest investments in the community: renovating its Volvo and Volkswagen dealerships at 4275 S.W. 139th Way.

The multimillion-dollar renovation includes the construction of a new building for the Volvo dealership and the extensive remodeling of its existing building into one just for Volkswagens. Construction has already begun on the new Volvo building, with the remodeling work scheduled to begin in April.

Chris Meier, president of the Herzog Meier Auto Group, says all of the contractors and subcontractors on the project are local. The overwhelming majority of the materials and furnishing will also be purchased locally.

“We’re doing as much as possible locally,” says Meier.

Across the nation, motor vehicle sales are rebounding from the Great Recession. Close to 15 million new vehicles were sold in 2012, the highest number since the economy flatlined in 2008. That’s good news for manufacturers and dealers, including those participating in the 2013 Portland International Auto Show that runs from Jan. 24 to 27 at the Oregon Convention Center.

But the increasing sales are also encouraging dealers to open new showrooms and expand existing ones. Four dealerships in Beaverton have recently either begun or completed major construction projects. The others are the new Mercedes-Benz of Beaverton dealership at 9275 S.W. Canyon Road, the new Sunset Audi dealership at 4050 S.W. 139th Way, and a major renovation at Beaverton Toyota Scion, 4300 Murray Blvd.

The Mercedes dealership was constructed on the site of the former Northwest Investment Cars Inc. building. It represents a vote of confidence in the region by Medford-based Lithia Motors, where sales began climbing in 2011.

“2011 was up over the last three years prior. If you look at a graph, it’s definitely going in the right direction — straight up,” says Terry Tallerino, general manager of Mercedes-Benz of Beaverton.

Gresham Ford is also involved in a series of major projects. It recently moved across the street into the former Gresham Mazda dealership at 1999 E. Powell Blvd. As part of the renovation, the company added eight new light-maintenance quick bays for servicing all makes of cars.

According to Gresham Ford General Manager Bess Wills, all of the work was done by local contractors and subcontractors, including construction-related companies that are regular customers at the dealership.

“We insisted that as many of our customers as possible get the work,” says Wills.

But that is just the start. Wills says the company is also planning to completely remodel the building, beginning in February or March.

The openings and expansions are boosting the already sizeable impact of new car and truck dealers on the state economy. According to WorkSource Oregon, the state’s employment department, more than 240 new-car dealerships in Oregon employed about 10,400 people and paid more than $847 million in wages in 2010, the most recent year for which annual figures are available.

That does not include associated businesses, like parts suppliers and trucking companies that deliver new vehicles.

Some of the recent construction work is being done to meet standards set by vehicle manufacturers. Known within the industry as “image upgrades,” they help ensure that each dealership has the same look and feel across the country. The costs are all paid by the local dealers, however, meaning they must be confident of staying in business at that location for years to come.

Meier says the coming Volvo and Volkswagen dealership buildings are essentially image upgrades. The new Volvo building will comply with the manufacturer’s “Next Face” standards, while the remodeled Volkswagen building will meet the manufacturer’s “White Face” standards. Meier says some minor changes can be negotiated to meet local needs. For example, he persuaded Volvo officials to include a fireplace in the center of their new showroom, a popular fixture at the Beaverton dealership for years.

“They said, ‘What do want a fireplace for?’ The answer was, we’ve had it for years and customers enjoy relaxing around it with a cup of coffee while their cars are being serviced,” says Meier.

Meier declined to say how much his company is investing, but some recent construction and renovation projects in Beaverton give an idea of the scope of such work. Bob Lanphere Enterprises moved its Honda dealership to 10760 S.W. Canyon Road as part of a five-year, $12 million master plan that included the opening of a new Infiniti dealership and the relocation of the company’s Kia dealership.

Wills says the upcoming remodeling project in Gresham will meet Ford’s image upgrade standards, too. She estimates all the work will ultimately cost more than $1 million, including city permit fees.

As for Gresham Ford’s former location at 1940 E. Powell Blvd., it will remain an automotive dealership. The Seaport used car company based in the Gladstone area is opening a second lot there.

The Beaverton Valley Times contributed to this story.