Dealer-owned auto mall taking shape in London

LONDON, ONT. – For Chris Leavens, move-in day can’t come soon enough.

The owner of Leavens Volkswagen said his operation – which expects to retail 800 new and used vehicles in 2013 – has woefully outgrown the spot his store has sat of for nearly 60 years.

But unlike some dealers that need to expand their business borders, Leavens set his growth aspirations a little higher.

“I knew that Brian Semkowski and Rick Baker at London City Chrysler needed a new store and we certainly needed a new location so we started talking about getting together as a group. There is really no auto mall in London and the city is growing,” he said. “We thought getting together in an auto mall would be a good move. We were able to buy the land at the right price and the whole thing penciled nicely.”

By we, Leavens means fellow London dealer principals Ken MacMaster and the aforementioned Baker and Semkowski. Roughly three years ago the four formed a group company and bought 37 acres of farmland on the east edge of London, Ontario near the city’s fast-growing airport. They had initially wanted to build to the north closer to new residential sprawl but the municipality rejected the idea.

Following some rezoning and additional bureaucratic red tape, recent construction at the London Airport Automall is taking shape.

Rooftops for Volkswagen, Mazda, Chevrolet and Chrysler are confirmed but there is room for six dealerships on the site. (The Mazda store will be a new point. Leavens Volkswagen, London City Chrysler and MacMaster Chevrolet Cadillac Buick GMC will be new facilities for existing operations).

The land adjacent to the plot is home to Minaz Shanji’s London Airport Kia store. Shanji also owns a large parcel of land behind the store that connects to the auto mall property that Leavens said could provide room for two more stores meaning the block could eventually hold nine.

“Toyota is a question mark as they might want to go north,” he said.

The ownership is leaving three to four acres of frontage to develop commercial properties including an Esso, which has tentatively confirmed a location on the spot.

“The gas station will be accessible by back road in the auto mall so dealers can get fuel.”

Construction firms Hyde and Bremore are each building two stores on site. The plan will see the VW and Chrysler stores be move-in ready by mid-December with grand openings planned for early spring of weather reasons. The Mazda and GM points should be about three to four months behind depending on the severity of London’s winter.

Independents Acting Like a Group
Though auto malls are commonplace in Canada, what makes this project somewhat unique is how four independent stores have joined together not only as developers and landlords but also as an unofficial dealership group.

Leavens, who also partnered with dealer Chris Pfaff to build London Porsche, said the idea was to make the auto mall concept work as though they were a larger group so they could all reap the benefits.    

“Our accountants will meet on a monthly basis and look for cost savings and revenue opportunities. We can share expenses like vehicle delivery, garbage removal, insurance, security, snow removal and advertising,” he explained.

He expects to have a landing page for the auto mall online soon followed closely by an awareness campaign.

“Our business plan has us acting like a group even though we’re independently owned. The benefits of that economy of scale work to our advantage.”

The relationship could even get down to software, he said, noting that timing is everything when it comes to leveraging deals from system providers.

When asked about those who feel the Internet has helped remove the need for need for auto malls as most shopping and comparing is done before the customer steps foot on the lot, Leavens said proximity and profit were not the only goals with this project.

“Our goal is to have a stronger voice in the London market. Building a destination here ahead of predicted urban growth while also motivating people to make the trip to the east end when they may not have considered it in the past for just a single store will benefit us all. I am convinced of it.”