Honda Powersports of Crofton – Gambrills, MD – June 27, 2005

HONDA POWERSPORTS OF CROFTON

CONTACT
745 Maryland Route 3S
Gambrills, MD 21054-1313
410/923-4944
www.hondaofcrofton.com

OWNERS
Jim Paugels and Paul Zublionis

BUSINESS PROFILE
Paugels and Zublionis began working on the dealership in 1999, and opened the doors in 2001. “We both came from corporate jobs in the automotive industry, and Paul had been an avid rider for years, so we decided to join forces and go into business for ourselves,” says Paugels. Exclusively Honda, including power equipment. “We added watercraft in 2002-one of the first dealers.” Largest-selling segment is motorcycle. “We are one of the largest Gold Wing dealers in the mid-Atlantic area now.” 20 employees.

GREATEST CONCERN
Paugels's greatest concern is price discounting. “This is a pretty aggressive industry. As consumers become more educated, we have to find ways to build value besides just discounting.” Honda of Crofton doesn't stick to MSRP per se, “but we have a posted price that provides all the information up-front. We also have an in-house customer satisfaction program, and pay all our employees bonuses based on customer satisfaction. That keeps them focused on taking care of our customers.”

WHAT'S HOT?
Hot at Honda of Crofton: cruisers and Gold Wings. “Going into the Summer, our watercraft sales are about double for the year. We continue to sell a lot of CRF 250 and 450 dirtbikes, and we've been selling the heck out of the new TRX 450R racing edition ATV this month.” Where do folks ride ATVs? “We're an hour north of Bud's Creek, plus they ride in Pennsylvania.” Paugels calls Joe Rocket “a very good supplier for us,” and also deals with Tucker-Rocky for apparel and HJC helmets. “We sell a lot of Nolan helmets as well. For the Gold Wing we've devoted a huge amount of space to Kuryakin-handgrips, special shifters, and the Ring of Fire lighting system for wheels, to name a few.”

CUSTOMER BUYING TRENDS
“We've done several demographic studies, and our customer base is so widespread,” Paugels says. Our income levels are a bit higher than average-30% of our total customer base makes between $35,000 and $49,000, and 26% about $50,000 to $74,999.” Crofton is in the “Golden Triangle” of Washington, D.C., and Baltimore and Annapolis, Md. “We're largely a suburban market, and the growth is phenomenal. There's just no property available on the East Coast anymore.” Paugels says that customers previously used OEMs' credit-card programs to finance purchases. “They're going to more traditional financing through banks and credit unions with fixed-rate installment contracts. People now are pretty savvy consumers and know that those $39 per month deals really don't benefit them in the long run.”

ANTI-POWERSPORTS ISSUES
“Although some of the rural areas in Maryland have had issues, we've been pretty lucky here,” says Paugels. “We're actually in the middle of creating some legislation that will provide and protect more riding areas. We hope that will pass our state legislature in the next year.”

PARTS AND SERVICE
“We've done such a good job building the business, we now have a one-month wait in service,” says Paugels. “Our business does not slough off in the Wintertime. The service department has a total of six, including the service advisor and setup shop. We want to add another technician if we can fit him into our building. We have three parts counterpeople, but we're a bit different in that we have cross-functionality. Service writeup takes place at our parts counter. That works well because customers want the expertise of somebody with a parts background. At times it gets a little crowded at our counter, but customers seem to like it.”

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PROMOTIONAL HOME RUNS
“Last weekend we had a 30th anniversary party for the Gold Wing,” notes Paugels. “The open house and poker run drew hundreds of people. We display at a lot of bike shows and were the exclusive Honda representative at the Baltimore show this past January.” Charity rides that the dealership supports include Honda's Ride for Kids (to benefit the Pediatric Brain Tumor Foundation of the United States), the COPS (Concerns of Police Survivors) ride for families of people who've died in the line of duty, and the Ride for Pride in September to benefit the USO, which sends care packages to troops overseas. A recent tri-state Honda Rider's Club ride lured 80 motorcyclists north recently. “Because we're very close to the Chesapeake Bay, we have a lot of watersports aficionados,” says Paugels. “We'd promoted PWC initially through a lot of advertising-TV and newspaper ads, plus we put demos into service every year, and have gone to a few boat shows, too.” The Crofton dealership assists American Honda by providing courtesy deliveries of watercraft to the American Watercraft Association and the Personal Watercraft Industry Association, “so they have product down in Washington, D.C., for lobbying groups.”

WORDS OF ADVICE
“Have a consistent marketing message,” advises Paugels. “Try to build value through everything you do for your customer, rather than just discount prices. For example, we have a loyalty program so that when repeat customers buy units from us, we recognize and reward them with discount coupons and items like that.”

- Julie Filatoff

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