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The Honolulu Advertiser
Posted on: Monday, March 24, 2008

Beverly Hills dealership tops in Rolls-Royce sales

By Ken Bensinger
Los Angeles Times

LOS ANGELES — Rolls-Royce normally transports new cars from Chichester, England, to Southern California by sea.

But if there's a particularly impatient customer at O'Gara Coach Co. in Beverly Hills itching to plunk down $350,000 for a Phantom, Rolls has been known to line up a jet, tout de suite.

Such are the advantages of being No. 1.

O'Gara has been the world's top-selling Rolls-Royce dealership for five years running. It's also tops worldwide in Bentley sales and numero uno in North America for Bugatti and Aston Martin.

But nothing compares to its Rolls-Royce juggernaut. Last year, O'Gara sold 58 Phantoms and Drophead Coupes — that's about 15 percent of all Rolls-Royce sales in the U.S. and nearly 6 percent of its sales worldwide.

In the competitive business of car sales, a single dealer with such a large market share is practically unheard of. And, yes, there are perks: private audiences with Rolls-Royce management and influence over the company's designs; exclusive rights to sell a limited "Beverly Hills" edition of the Phantom, with custom features such as illuminated door sills and mother of pearl inlays and a price tag of $398,510, compared with the normal Phantom sticker of $345,000. (The standard Phantom is the model of choice for O'Gara customers such as Shaquille O'Neal, who had his converted into a convertible.)

And there's the crown jewel: better, and more, inventory, hugely important for models like the Drophead Coupe, which has a sticker price of $412,000 but a waiting list of nearly two years, allowing dealers lucky enough to get them to mark up the price by as much as $200,000. That juicy profit is an O'Gara privilege.

"When you're No. 1, the factory extends special opportunities," said Bruce Frederick, president of O'Gara. "If there are certain favors you need to call in, they'll do it."

IN A SWEET LOCATION

A huge portion of O'Gara's success, Frederick acknowledges, is thanks to location, location, location. Nearly all his customers are Beverly Hills residents, and being right next door is a big advantage when competing against dealers in Pasadena, Newport Beach and Rancho Mirage and, for that matter, the rest of the nation. After all, with a fuel economy rated at 14 miles per gallon for the 12-cylinder, 453-horsepower Phantom, who wants to idle on the freeway?

The typical Rolls buyer, the carmaker says, is someone with $20 million to $30 million in liquid assets. And unlike in the Middle East and Asia, where the majority of Rolls-Royces are driven by chauffeurs, owners in California overwhelmingly drive their own. In addition, Frederick said, 30 percent of his buyers, who are predominantly executives, athletes, actors and recording artists, return to buy a second Rolls. And, with the introduction of the convertible Drophead last year, many choose to own both at once.

The 90210 ZIP code is unquestionably one of the nation's wealthiest, although with median household income at $126,589, according to market researcher Claritas Inc., it's not even the wealthiest in Los Angeles County. But it is the leader in bling, and nothing has more of that than a two-tone Rolls with a brushed aluminum hood.

"I don't know about the U.S. market. I know only about 90210," said Thomas O'Gara, owner of the dealership, which also sells exotic Lamborghinis and Spykers.

He has been selling Rolls-Royces in Beverly Hills since he opened his dealership in 1997, but business really picked up with the arrival of the current generation of designs, coupled with aggressive marketing tactics that include taking cars to the homes of prospective buyers —high in the hills, of course.

GIVING BACK TO ROLLS-ROYCE

So much success, though, isn't just handed out on a silver platter. In exchange for all the favors, Rolls-Royce expects O'Gara to invest heavily in its showroom and facilities. Under pressure from the company, the dealership is in the process of acquiring property to house expanded service operations, an important revenue center for the manufacturer.

In February, Ian Robertson, chairman and chief executive of Rolls-Royce Motor Cars, which is owned by BMW, flew in to present the dealership with a sales trophy. Over a champagne toast, he lauded his salesmen.

"These guys did just short of 60 cars for us, and other U.S. dealers did only 10 at best," he said, leaning up against a bespoke Beverly Hills-edition Phantom, one of only six made for the current model year and offered only to O'Gara. "Of course there's special allocation here."

Other dealers can only dream of such close ties.

For decades, dealer-manufacturer communications were one-way, with carmakers doing all the talking, and dealers humbly selling whatever they were sent.

But in the late 1990s, American Honda Motor Corp. paid a $316-million settlement for soliciting kickbacks from dealers in exchange for better allocation of inventory. The scandal sent a chill through the industry and led many carmakers to adopt a more egalitarian stance toward their dealers for fear of being accused of playing favorites.

Toyota's president of U.S. sales, Jim Lentz, recoils at the thought of extending privileges to some dealers over others, and he emphasizes that they all receive the royal treatment, mentioning dealer trips to golf outings in Colorado and elsewhere. "I don't think any one dealer is that much more important than any other for the most part," Lentz said.

SPECIAL INVENTORY

Then there's O'Gara. Bentley just flew O'Gara's sales manager to Finland for an ice-driving event and offered the dealership a first look at its much anticipated Brooklands model. For the dealership, which sold 338 Bentleys in 2007, or 3.3 percent of the English carmaker's worldwide sales, such privilege is expected.

Rolls, luxury leader that it is, takes things up a notch. With a waiting list more than a year for the Drophead, Beverly Hills residents can rest assured that more will come here than any of the company's 79 other dealerships.

That goes for future models as well. Rolls-Royce has been consulting with O'Gara on the design of its RR4 model, a $250,000 sedan set to debut in 2010. And in late February, Rolls-Royce flew out its new 101EX model so O'Gara could give customers a sneak peek a week before the company officially unveiled the car at the Geneva Auto Show.

The car won't hit showrooms until the end of the year, but when it does, "we'll be getting more of them than any other dealer," Frederick said.

Fewer than 300 shopping days until Christmas, so better start saving.