Luxury auto dealer defies slump with Rocklin showroom
Published Saturday, Apr. 18, 2009
A reasonable mind might wonder: What in the world is George Grinzewitsch Jr. doing?
Motor vehicle sales are down statewide, many consumers remain reluctant to make big-ticket purchases, and more than a dozen auto dealerships closed in the Sacramento region last year.
And yet Grinzewitsch is opening a $22 million Mercedes-Benz dealership in Rocklin. With a restaurant.
The dealership is already selling cars at the I-80 location on Granite Drive and is ramping up its service, maintenance and detail operations. By the time the finishing touches are put on the 56,000-square-foot facility by midsummer, it will be as palatial as any car sales operation in California.
A spiral staircase with maple wood treads will catch eyes inside the main entrance, whose décor includes custom-built chandeliers, gleaming "Four Seasons Hotel-like" floor tiles and silk-draped light fixtures.
A nearby water feature will showcase the Mercedes-Benz logo, with beads of water descending from the second floor, offering the illusion of indoor rain.
By July, SRO Inc., whose local restaurants include 33rd Street Bistro and Riverside Clubhouse in Sacramento, will open Bistro 33 Rocklin inside the dealership. It will include a bar and interiors by San Francisco-based designer Blair Morgan.
Dealership officials say an independently operated restaurant inside an independently operated auto dealership is a nationwide first.
In addition, a longtime service center at the Rocklin site will become a detail operation. The service work will move into a new 35-bay, airplane hangar-size shop, which includes a fully computerized parts storage system.
Grinzewitsch said the complex was designed to be not just a dealership "but a destination."
But given the slumping economy and the serious struggles in the auto industry, is Grinzewitsch making a smart move?
"My answer to that is that this project was planned years ago, and we feel very fortunate to be here in Rocklin," he said. " … Yes, we have invested a lot of money and time, but when we first looked at this, we asked, 'Do we want a dealership for five years or 20?' We wanted 20."
The short-term success of the new dealership likely will be tied to the local economy.
The median income of Rocklin-area households is not as high as those surrounding his Mercedes-Benz of El Dorado Hills dealership – a likewise opulent store that opened along Highway 50 in 2003. But Grinzewitsch said the demographics of Rocklin area residents dovetail nicely with the typical Mercedes-Benz buyer, generally a high-income, middle-aged male.
The Placer County housing market has stayed relatively healthy with far fewer foreclosures and median home prices falling only half as much as those in Sacramento County the past year, according to researcher MDA DataQuick.
With Mercedes dealerships on both the Highway 50 and Interstate 80 corridors, Grinzewitsch hopes to draw prospective car buyers from a wide swath of greater Sacramento.
Still, as the economy sputters along, some auto analysts believe many consumers will delay pricey car purchases in favor of more economical cars, the kind offered in large numbers at the Roseville Automall, just a short drive from Grinzewitsch's new dealership.
The German automaker's lineup is stocked with pricey luxury autos in the $90,000 to $195,000 range.
Nevertheless, Grinzewitsch, a second-generation car dealer, said he's confident the auto industry will rebound.
Sales at Mercedes-Benz of El Dorado Hills were up in December and the first quarter this year, compared with the same periods a year ago, he said. The dealership sold 47 new vehicles in March alone, plus a record 91 used vehicles.
"Obviously, we've gone through some tough times, but we're seeing signs of improvement," Grinzewitsch said.
Jessica Caldwell, of Edmunds.com, the Santa Monica-based automotive Web site, said Mercedes-Benz has weathered the depressed U.S. sales market better than most.
"Mercedes-Benz is not experiencing the 40 percent-plus declines we've seen with other brands," Caldwell said.
She said the car company's U.S. market share in March was 1.8 percent, up from 1.5 percent a year ago.
"That's pretty good for a market that's generally down," said Caldwell.
She acknowledged the risk in building an expensive dealership in the current economic climate, but said the upside is "establishing yourself now and being in a good position when things get better."
The nation's high-end car market was the last to succumb to the recession's drag, but is "often the first to show improvement," Caldwell said.
Grinzewitsch will have plenty of competition for those high-end dollars at his new location. Mercedes-Benz of Rocklin is adjacent to the Niello Co.'s Land Rover dealership and within a stone's throw of Niello Porsche. Niello said it welcomes the new arrival.
"We're delighted to have George and Mercedes-Benz in Rocklin," said Rick Niello, president of the Sacramento-based company. "Mercedes is a great product and lends a lot of cachet to our little neighborhood in Rocklin. We think it will enhance our footprint up there."