Used-Car Chain Seeks Approval for Oxnard Site
Hoping to secure a prime location off the Ventura Freeway, representatives of the fast-growing AutoNation USA chain of huge used-car stores are scheduled to meet with Oxnard city officials tonight.
AutoNation--founded by Florida-based business mogul H. Wayne Huizenga--wants to open a 1,070-car store on 20 acres directly south of the Oxnard Auto Center.
The city and some other car dealers are eager to go along for the ride, despite some fears it could drive small used-car dealers out of the city and further drain business from downtown.
The location is one of five planned Southern California sites for the AutoNation chain, which aims to entice used-car buyers with a radical approach to sales and service.
By eliminating the traditional haggling with fixed prices, offering limited service warranties and return policies, and providing a massive selection of cars, the chain boasts of revolutionizing the used-auto industry.
“We’ve based this on research on what customers like and don’t like about the used-car business,” AutoNation spokesman Jim Donahue said. “And what they don’t like is the negotiation, the lack of a warranty and the poor selection. We’ve solved all of those.”
In fact, many analysts view AutoNation as the Wal-Mart of the used-car industry--a comparison Donahue accepts.
Small used-car dealers across Ventura County can expect stiff competition from AutoNation, he said.
“The small company that focuses on customer service, price and selection will do just fine,” Donahue said. “The company that fails to focus on what the customer wants is going to be in trouble.
“Wal-Mart did not come to be because Wal-Mart said the world will be this way. Wal-Mart came to be because customers wanted it. Wal-Mart offers a large selection and low prices in a friendly shopping environment. That’s what we’re doing.”
AutoNation has opened 24 stores, mostly in the southeastern United States. Now the push is in Southern California.
Aside from the Oxnard store, which the company hopes to open in 1998, AutoNation plans to open dealerships in Rancho Cucamonga, Irvine, Long Beach and Los Angeles.
“We would not look at Oxnard in isolation,” Donahue said. “We’re looking at the entire L.A. market.”
With the promise of a sales-tax bonanza from another major auto retailer, city leaders say they are eager to see Oxnard become part of the company’s expansion.
Officials at the city’s Greater Oxnard Economic Development Corp., for instance, said that AutoNation officials project $100 million in annual sales. That would translate into $1 million a year in sales-tax revenue for Oxnard, development corporation officials said.
“I think this is the next big thing for cars, and the city needs to be a player,” City Councilman Dean Maulhardt said.
Auto industry analyst Chris Cedergen of Nextrend, a Thousand Oaks consulting firm, said new-car dealers are the least vulnerable to AutoNation.
But some of the $100 million in expected AutoNation sales will certainly come at the expense of local, traditional, small-lot used-car dealers. Such losses at small lots would reduce the projected $1 million in annual sales-tax revenue from AutoNation, he said.
The small used-car dealers along Oxnard Boulevard and Thompson Boulevard in Ventura have the most to fear, Cedergen said.
“I think the weaker ones run the potential of being displaced,” he said. “I still think they can compete by focusing on niche markets. Some actually specialize in people with bad credit, and older, much cheaper cars.”
At Bob’s Used Cars on Oxnard Boulevard, manager Jose Ordas said he expects to survive if AutoNation comes to Oxnard.
Ordas said customers like the service at his 55-space lot, where most of the cars are older than those AutoNation sells.
Huizenga founded two Fortune 500 companies and Blockbuster Entertainment, and his Republic Industries is the parent company of AutoNation.
