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Old 01-13-2008, 11:54 PM   #1
XDCX
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Default Bob Lewis Volkswagen files for Bankruptcy

Reports indicate that Bob Lewis Volkswagen filed for Chapter 11 bankruptcy with assets of $5.7 Million and debts of $7.0 Million. The largest unsecured creditor was California's State Board of Equalization with a debt in excess of $200,000.

The family owned dealership was at one time the largest new car dealer in the Silicon Valley as well as being the #1 Volkswagen Dealer in the U.S. New car sales, which reached peaked in 2001 with over 5,500 units, have fallen to less than 600 units based on the most recent data available.

The dealership is still open for business and the owners indicate that they are evaluating whether they want to sell or reorganize the business.

Here's a link to the most recent news report: http://www.bizjournals.com/sanjose/s...7/daily81.html

I wonder if the dramatic decrease in sales volume is more of a reflection on Volkswagen's strength or the soft economy in Northern California?
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Old 01-15-2008, 08:53 AM   #2
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I can tell you that our dealerships numbers have declined just as thiers have. I wasn't here but I've been told by some guys that were, that we used to do 150+ cars a month. Now we're at around 40-70/month.

VW is somehow trying to beat out Toyota by 2010 in the US. With rates and residuals where they are and a brand that can't seem to figure out where it fits between highline and standard markets ($50K for a Touareg 2 V8), I don't know how they are gonna make it.

All we can hope for is that the Tiguan is a hit and the Diesels show up.
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Old 01-29-2008, 08:59 PM   #3
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Volkswagen has struggled to find their identity. They've been super successful in the U.S. with the Beetle, the Rabbit and then the new Beetle. Yet, despite that success, they seem determined to try to move "up-market."

It appears that Hyundai is trying the same thing with some of their new product offerings - it will be interesting to see how it works.

I still think of VW as being the Apple Computer of the car business - cool cars and cool commercials. The market place doesn't seem to agree.

Any other VW Dealers have any comments - is it the market or is it the product?
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Old 02-05-2008, 08:00 AM   #4
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Having lived two miles from Bob Lewis and Working intimatley with the VW dealers in the Bay area as a District Manager with JM&A who handles VW's service contract business I can tell you the problems in the bay area for VW are varied. VW in the bay area suffers from dealer over saturation, there is a VW dealership every 4 miles down the peninsula from San Rafeal to San Jose. Another issue is that customers are seeking the deisel models that VW is unable to sell in the California market. Then there is the Toyota juggernaut that is fueled by the Prius and their other hybrid models. The demographics in the bay area with a vast majority of the population coming from asia and india also preffer other asian brands over VW.

Bob Lewis's problems also result from being in an auto mall that as a whole is in decline. Just 4 miles away is Stevens Creek Blvd. on which almost every manufacturer is represented. Also stevens creeks dealers are all spending money on new facilities to bring in more business. Stevens creek also has the biggest mall in the area and Santana row which is a high end shopping row with upscale housing adding to the whole area. The VW dealer on Stevens creek just spent millions on a new facility and is experiencing huge sales growth.
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Old 02-07-2008, 11:39 AM   #5
Rod Barajas
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Quote:
Originally Posted by okcarl View Post
Having lived two miles from Bob Lewis and Working intimatley with the VW dealers in the Bay area as a District Manager with JM&A who handles VW's service contract business I can tell you the problems in the bay area for VW are varied. VW in the bay area suffers from dealer over saturation, there is a VW dealership every 4 miles down the peninsula from San Rafeal to San Jose. Another issue is that customers are seeking the deisel models that VW is unable to sell in the California market. Then there is the Toyota juggernaut that is fueled by the Prius and their other hybrid models. The demographics in the bay area with a vast majority of the population coming from asia and india also preffer other asian brands over VW.

Bob Lewis's problems also result from being in an auto mall that as a whole is in decline. Just 4 miles away is Stevens Creek Blvd. on which almost every manufacturer is represented. Also stevens creeks dealers are all spending money on new facilities to bring in more business. Stevens creek also has the biggest mall in the area and Santana row which is a high end shopping row with upscale housing adding to the whole area. The VW dealer on Stevens creek just spent millions on a new facility and is experiencing huge sales growth.
Hey you ever work with VW dealers in Stockton? I think a friend of mine is a GSM at a VW store over there.
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Old 02-07-2008, 01:44 PM   #6
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No I handled from San Luis Obispo to Santa Rosa up the peninsula. Who is it though I may know him as many of the guys in the VW stores moved around.
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Old 02-07-2008, 03:57 PM   #7
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No I handled from San Luis Obispo to Santa Rosa up the peninsula. Who is it though I may know him as many of the guys in the VW stores moved around.
Doug Powell
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Old 02-07-2008, 07:03 PM   #8
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Quote:
Originally Posted by okcarl View Post
Having lived two miles from Bob Lewis and Working intimatley with the VW dealers in the Bay area as a District Manager with JM&A who handles VW's service contract business I can tell you the problems in the bay area for VW are varied. VW in the bay area suffers from dealer over saturation, there is a VW dealership every 4 miles down the peninsula from San Rafeal to San Jose. Another issue is that customers are seeking the deisel models that VW is unable to sell in the California market. Then there is the Toyota juggernaut that is fueled by the Prius and their other hybrid models. The demographics in the bay area with a vast majority of the population coming from asia and india also preffer other asian brands over VW.

Bob Lewis's problems also result from being in an auto mall that as a whole is in decline. Just 4 miles away is Stevens Creek Blvd. on which almost every manufacturer is represented. Also stevens creeks dealers are all spending money on new facilities to bring in more business. Stevens creek also has the biggest mall in the area and Santana row which is a high end shopping row with upscale housing adding to the whole area. The VW dealer on Stevens creek just spent millions on a new facility and is experiencing huge sales growth.
Wow, excellent commentary.

I forgot about California's Emissions Laws and how that could have an impact on VW's sales results.

Toyota is red hot in Southern California - there's a post on this forum about a Toyota Dealer in San Diego that tore down a four-year old Sav-on Drug Store because he needed the room. What other franchise is so strong that they can spend that kind of money upgrading their facilities?

Concerning an Auto Mall in decline, I've seen that a couple of times and it gets real ugly for the last guys standing. They reach the point where sales have dropped so far that they can no longer get a loan to move their facility to the better location - they're in a classic "lose-lose" situation.

Thanks again for the post - great insight.
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Old 07-10-2008, 06:20 PM   #9
okcarl
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Just found out that Bob Lewis sold the store to the Del Grande auto group and it is now called Capitol VW. Here is a link to their site.

http://www.capitolvolkswagen.com/
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Old 07-11-2008, 07:40 AM   #10
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Just found out that Bob Lewis sold the store to the Del Grande auto group and it is now called Capitol VW. Here is a link to their site.

http://www.capitolvolkswagen.com/
Thanks for the update.

It's great to hear that they found a buyer for the store and kept the point open. It seems like most of the stores that reach the bankruptcy point just end up closing down.

It will be interesting to see how the new owner does with the franchise.
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