Automotive News - September 21, 2020 - Best Practices Supplement - S14

14 | SEPTEMBER 21, 2020
LEWISVILLE AUTOPLEX, LEWISVILLE, TEXAS

SPARKING BUSINESS

Dealer sells Teslas and
customized trucks to
fight margin squeeze

Published in Automotive News Feb. 10, 2020
Laurence Iliff

liliff@crain.com

esla doesn't have dealers, but at least
one Texas dealer is getting known for
having Teslas.
The upstart all-electric brand is a key
component of the growing - and high-margin - used-vehicle business at Lewisville Autoplex, the showpiece Mitsubishi store northwest of Dallas.
Like many dealers coping with compressed
new-vehicle margins, the Baum family has
turned to used vehicles for volume growth
with better profits. And it's found particular
success with lifted or customized trucks as
well as Teslas.
It started with good, old customer service.
In 2013, a friend of David Baum Jr., the general manager and third-generation auto dealer, wanted to buy a Tesla Model S. The pricey
sedan had been on the market for only about
a year, but Baum said he would try.
"I went out and bought him a Model S, and I
was so impressed with the car," Baum said in
an interview. "This car - by far - is the best
vehicle I've ever driven myself. And so from

On the showroom floor:
A 2014 Dodge Viper GTS, a
2018 Chevrolet Corvette Z06
and a 2016 Mercedes-Benz S63

Lewisville Autoplex seeks out used
Teslas to meet consumer demand in
the Dallas area.
3/4 of the used-vehicle inventory is

unusual vehicles, including many
lifted pickups and Jeeps.
The dealership also now modifies

trucks itself to capture more of the
added value, instead of outsourcing
the work.
Used-vehicle sales have jumped

more than 20% and prices are
higher than for new models.

there, I said, 'We're going to start stocking
these.' "
While the California-based automaker
chooses to sell its new EVs directly to consumers, Texas law prohibits company-owned
stores. So buying Teslas in the state can be a
hassle, said Baum, 35.
"But there's still huge demand for them," he
said. "I see them all over the road, all over Dallas. So we're carrying late-model Teslas, 1- to
2-year-old Model S, Model X and the Model
3."
Baum said the average Tesla stays on his lot
for only eight days. Supply comes from auctions of off-lease cars and loaner vehicles.
"The demand is there, we just can't keep
them on the lot," he said. "I think it's a great
value for someone not to have to pay adver-

tised price on a new one."
To support the used-vehicle specialty, the
store has six Tesla electric charging stations:
two in the front for customers, two in the service drive and two in the vehicle-delivery area.
The Baum family's store off I-35 was the first
U.S. dealership to complete Mitsubishi's new
Dealer Visual Identity Program with all the
bells and whistles - at a cost of $13.5 million.
Brand dealers and executives have come from all
over the world to see the
ground-up facility.
But in the current retail
market, it needs to do
more than invest in the rebirth of the Mitsubishi
brand.
Lewisville Autoplex does Baum Jr.: Teslas
sell more-commonplace don't last on lot
used autos, such as Ford
Explorers and Toyota Camrys, but those are only
about a quarter of the inventory. Another quarter are exotics or less-common vehicles such as
Teslas, and half are customized vehicles such as
lifted Jeeps and pickups, Baum said.
"Our average sales price on a used car is now
$43,000. In comparison, our new-car average
sales price is $25,000," he said. "The margins
on our lifted vehicles and custom trucks are a
lot better. It definitely keeps us going. At the
same time, we're building those trucks inhouse, so that's money to the dealership as
well. Service, parts and sales all benefit."

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