Power Profiles

San Jose BMW – San Jose – Dec. 5, 2005

San Jose BMW
1886 W San Carlos Street
San Jose, CA 95128
(408) 295-0205
Chris Hodgson, Dealer Principal
San Jose BMW owner Chris Hodgson purchased the 4,000 sq. ft. dealership in 1992. The shop consists of a 1,500 sq. ft. showroom, 1,400 sq. ft. service area and parts and storage. Carries BMW motorcycles, along with Vespa and Piaggio scooters. The dealership has 10 full-time and two part-time employees aside from Hodgson.
“My greatest concern is the lack of young people coming into the sport,” says Hodgson. “And then we have a lot of dealers who don’t show much restraint on sales of bikes and they get these young guys coming in and they feel the need to sell them an R6. And these kids go out and splat themselves into the side of cars. When you look down the road, say 20 years from now, you wonder who we’re going to be selling bikes to.”
“In the BMW product line the GS have always been a strong seller,” says Hodgson. “Then, 1200R/Ts are next. After that, the new K1200S and K1200R, which I kind of lump together.” On the scooter side, Hodgson says that the Vespa GT200 is his top seller. “The Vespa has been climbing considerably. Every month I sell more and more of them.”
“Vespas appeal to one part of the populations, BMWs appeal to a totally different part of the population,” says Hodgson. “We sometimes transition people from Vespas to BMW, in fact, that’s fairly frequent, actually. And on occasion we go the other direction, but not very often.”
“Service is the breadwinner,” says Lisa Malachowski, operations manager. Parts, not so much, but when you talk about parts you’re really talking about accessories.”
“There is some pressure from the Internet in terms of accessory sales. There’s a lot of little manufacturers and little importers from Europe. There’s a lot of little stuff that is not easily obtained by the dealer at a reasonable markup, and we don’t want to inventory it. We do have the obvious stuff at the time of sale, saddlebags and those big-ticket items. Sometimes we have to put a grand or two of trinkets that they get from maybe 10 different vendors.”
“Primarily, [online] made sense, adds Malachowsky. “The BMW customer is very savvy about the Internet. They are prone to buy things on the Internet if they don’t have to touch and feel to make a decision.
“When you look at retailing overall, from let’s say over the past five years and into the future, obviously, there is a huge amount of change from traditional retailing to the Internet,” says Hodgson. “It is something that we are going to expand on dramatically on our Web site. There is almost nothing there and yet, we sell a surprising amount of stuff. It’s obvious that’s the direction we feel it’s headed.”
As for service, San Jose BMW has four technicians, a service writer and a service parts person. “In parts we have one parts counter person and one parts manager and then I oversee both service and parts as the director,” says Malachowsky. “Chris recognized the importance of having parts and service under a single line of management because they are so closely tied. In terms of technology, I’m a very computer savvy person because I came out of the IT industry, so we’re always looking at ways of using the data we have available to us to increase profitability.”
“We don’t do billboards,” says Hodgson. “We do mailings, we do e-mailings, we do open houses, and we do the standardized run of that stuff.
“Pennies can erode your profitability,” Hodgson said. “If you don’t attract and maintain the right types of employees to really manage the details you are going to find yourself basically ruining your business.
“If you do 95% of the stuff right and then drop the ball on your customer, he thinks you are not professional and his overall view of the industry is unprofessional as well. The devil’s in the details. Every last thing has to be done correctly so the customer experience is good and you retain those customers.”
—Blake Stranz
If you would like to share your story with the readers of Powersports Business, please contact Blake Stranz at bstranz@comcast.net.

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