Campbell Sells Nissan Agency as Sales Slow
Campbell Automotive Group, one of the largest new car retailers in the nation, has sold its Campbell Nissan-Buena Park dealership as part of a move to trim down in the face of a declining economy.
The purchaser, Marubeni Motor Service Co. in Los Angeles, is a Japanese-owned firm that handles the shipping of all Nissan cars to the United States. Marubeni is the third foreign-owned company to acquire sole ownership of a new car dealership in Orange County.
The small but increasing presence of foreign investment in local new car franchises is a clear signal that domestic funding is drying up as local dealers feel the impact of the economic slump, industry experts said.
Campbell’s sale of the Nissan dealership comes as dealers tighten their belts because of a prolonged sales slump. In Orange County, eight new-car dealerships have gone out of business in 1990 and dozens have changed hands in distress sales--and others are sure to follow.
“This is one of the strongest markets in the industry,” said Rod Alberts, executive director of the Orange County Motor Car Dealers Assn. “But this is the toughest time we’ve seen in years.”
Campbell Auto President John B.T. Campbell III agreed, saying that he expects the coming year to be “a very tough one.” He said Campbell Auto has laid off several administrative employees, is trimming employment at its nine remaining dealerships through attrition, and is considering selling or moving one other dealership it owns in Buena Park.
The firm’s Nissan dealership in Buena Park, formerly home of Campbell’s Porsche and Audi franchises, will be closed for about three weeks to enable the new owners to remodel and complete the state-licensing process, Campbell said. It will reopen as Nissan of Buena Park.
Marubeni officials could not be reached for comment. But Campbell said Marubeni also owns a Nissan franchise in Temecula and is better able to operate a marginal dealership because of its close ties with Nissan.
Campbell said that while business has been down for more than a year, “the drop has been especially noticeable since Saddam Hussein shook things up.” The Aug. 2 invasion of Kuwait by Hussein-led Iraq “created a bit of uncertainty,” Campbell said, “and people don’t make big-ticket purchases in uncertain times.”
There currently are 132 new-car dealerships in the county, down from 140 a year ago, Alberts said.
“Dealers already have been running with really tight profit margins for several years because of factory and competitive pressures, and with the economy tightening more and more, you are going to have some go belly up,” he said. “It is tough to stay alive out there.”
The most recent collapses occurred last week when Mazda of Santa Ana and Renfree Volkswagen in Orange were closed. Other local dealers that have gone under this year include Hix Pontiac in Costa Mesa, Tustin Pontiac/GMC and Garden Grove Nissan.
For Campbell Auto, well-capitalized through a $13-million cash infusion it received when a British investor bought 50% of the company in 1988, staying alive has meant reorganizing operations.
The Buena Park Nissan franchise was sold because “it wasn’t making money any more,” Campbell said. The dealership group shut down its Audi franchise on Buena Park’s Manchester Boulevard auto strip earlier this year for the same reason, and moved its only healthy Manchester strip operation, Campbell Porsche, to a newly acquired Lincoln-Mercury dealership in Anaheim.
Campbell still owns a Mazda and Volkswagen dealership on Manchester--they share the same facility--but the company’s officers are considering moving them or selling them.
The Buena Park auto strip houses the nation’s largest Mercedes Benz dealer, House of Imports, and a BMW dealership recently opened there, but the area “just hasn’t been a good one except for luxury cars,” Campbell said.
His group still owns one other Nissan dealership, in Huntington Beach, and he said there are no plans to sell it.
And despite his forecast of tough times ahead, Campbell is still looking for opportunities. The company will open Orange County’s first Saturn dealership next month in Santa Ana and plans to open a second one in Huntington Beach late next summer.
The new small car line by General Motors features fuel-efficient cars priced between $8,000 and $13,000, and Campbell figures they will sell even in a recession.
