Amid strong car sales, dealers rebuild the showroom

The Berwyn location of Volvo dealer Keystone Motors, last remodeled 15 years ago, was ready for a tune-up. That was clear from customer surveys, co-owner Irv Stein said.

Keystone, which also has a Volvo dealership in Doylestown, started planning a significant remodeling project that would have disrupted business for two or three months.

Then Volvo came out with a corporate program to make Volvo dealerships look alike, Stein said this week.

"You don't have to do it, but there is money tied to it. If you don't do it, you're giving away a large portion of the cost of doing the building," Stein said.

The project is in its seventh month and is costing five times as much as what Keystone had planned to spend, because it involved the razing of the showroom and the construction of an enclosed drop-off area for service, said Stein.

Stein, who owns Keystone with his brother, Jack, declined to provide financial specifics.

The Volvo look is a white building with high walls of glass. Honda has what dealers called a blue silo out front. Chevrolet has a box with blue trim.

The experience of Keystone Motors, which was founded by the Steins' father and has been a Volvo dealer since 1967, is not uncommon in the region and around the country.

"Manufacturers are requiring their dealers to conform to image requirements," said Stephen A. Moore, who is chair of the automotive dealership law group at McNees Wallace & Nurick L.L.C., in Harrisburg.

"They want new and modern facilities, done to their brand image," Moore said. "It's gradually picked up steam over time."

As the 2015 Philadelphia Auto Show opens this weekend at the Convention Center, auto dealers nationwide are basking in strong vehicle sales - 16.4 million last year, the highest level since 2006, according to the National Automobile Dealers Association.

Meanwhile, the number of dealers has dropped 18 percent to 17,665 from 21,495 over the same period. That means the average number of cars sold per dealer has jumped 21 percent, to 928 from 768.

That gain makes it possible for many dealers to reinvest in their properties.

Also at play is the desire of automakers, with a few exceptions, to have one brand per location, Moore said.

A new Audi store that opened recently in Devon was moved from what used to be a joint Audi-Volkswagen store in Newtown Square. The old location is now strictly Volkswagen, according to the website of owner YBH Auto Group.

FCA US, formerly Chrysler Group, is among the exceptions to the one brand per location rule.

Dodge, Chrysler, Jeep, and Ram are kept under one roof, but that doesn't mean the manufacturer has given up on a standard look for its stores, said David Kelleher, who owns David Chrysler Dodge Jeep Ram along Route 202 in Glen Mills.

Kelleher plans to have a grand opening for his store on March 12, and said he's happy with how the redesign, including signature arches in front, turned out, especially because the manufacturer allowed him to make some changes to the standards.

"When I did this renovation, all I had to do according to Chrysler was put a new front on my store, but I added 10,000 square feet, so my sales staff could grow from 11 to 18, so my service could go from 14 bays to 19 bays," he said.

Kelleher said he expects to sell 1,800 new vehicles this year, up from 1,600 last year. "That's why you don't mind building a new building," he said.

Not all auto brands place the same level of demand on dealers.

Subaru of America, based in Cherry Hill, for example, has requirements for colors and the type of flooring, spokesman Michale McHale said. "It's not as overt as some other makes," he said.

Volvo, on the other hand, defines everything down to the light fixtures on the ceiling, said Stein.

"They leave absolutely no room for self-expression," he said.

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