Thriving, not just surviving

Published 12:00 am Tuesday, September 23, 2014

Russ Humberston Jr. 's Toyota-Scion dealership in Beaverton.

Auto dealers are enjoying their highest sales since before the start of the Great Recession — welcome news for those who survived the economic turmoil that shook up the industry just a few years ago.

During the worst of it, the U.S. government pushed Chrysler and General Motors into bankruptcies, resulting in the closures of hundreds of dealerships, including several in the Portland area. Among them were Timberline Dodge in Portland, Russ Chevrolet in Tigard, and Alan Webb Dodge in Vancouver. Additionally, all the Hummer, Pontiac, Saab, and Saturn dealerships in the country closed when General Motors dropped the brands.

Now, however, personal vehicle sales are on the rise. According to researcher Autodata Corp., total sales could reach 17.5 million this year, the most since 2006, the year before the U.S. economy started to tank.

The increasing sales are especially important to those dealers who invested in new and remodeled buildings during the economic downtown, a gamble that is paying off with improved showrooms and service centers that are helping to sell more and more vehicles.

For Russ Humberston Jr., the risks mounted as he invested around $13 million in his Beaverton Toyota-Scion dealership during the past five years. Planning for the complete renovation began in 2008 and work started in 2010, about the time its Pontiac and Saturn dealerships were being phased out.

“We had some nervous moments,” Humberston admits.

But seeing the Beaverton Toyota project through is paying off with a state-of-the-art dealership that customers appreciate. Its new service center is LEED certified, and the new showroom and waiting room will be soon. It also includes a new car wash that recycles most of its water.

“The environmental features are important to our customers, especially those buying and services Toyota Prius hybrids,” says Humberston.

The waiting room also features a comfortable coffee shop and deli, with an espresso machine, sandwiches, salads and pastries. If also has free wifi to help pass the time.

“Like Starbucks, we wanted to create a third space between home and work where people won’t mind waiting,” says Humbertson.

A grand opening for the renovated dealership at 4300 S.W. Murray Blvd. in Beaverton will be scheduled soon.

The Ron Tonkin Family of Dealerships didn’t lose any of their 17 franchises during the recession. But the company had to

tighten its belt and work closely with its bank to achieve the top priority of vice presidents Ed and Brad Tonkin — not laying off any employees as sales plunged and revenues dropped. Decisions included reducing truck and SUV inventories in favor of lower-priced economy cars, moving janitorial and other services in-house, and cutting back but not eliminating advertising buys.

“Our employees are like family to us. That’s why we named the company the Ron Tonkin Family of dealerships,” says Ed. He and Brad are the sons of company founder Ron Tonkin, who passed away in January.

Ed also had a front row seat to the challenges confronting all dealerships across the country. During the Chrysler and General Motor bankruptcies, he was chair of the National Auto Dealers Association, which represents new car and truck dealers across the country.

As a result, Ed spent much of his time in Washington D.C. negotiating on behalf of the dealerships with the Obama Administration. He could not understand why the government pushed hard for Chrysler and General Motors to reduce the number of their dealers, which were not costing the manufacturers anything because of the structure of their franchise agreements.

“The government simply didn’t understand how the business worked. When the lists of dealerships to be closed came out, we were all shocked. Many people lost everything they had with a stroke of a pen,” says Ed.

During the economic downturn, the Tonkin brothers also had to decide whether to open a new Audi dealership in Wilsonville. They did, even as the business landscape was shifting under them. Brad remembers going before the Wilsonville City Council to get final approval for construction of the dealership and being the only person on the agenda.

“They approved it unanimously and after the vote, several councilors came up to me and asked if we really wanted to be building it then,” says Brad.

Since the economy has begun to approve, the company has remodeled almost all of its dealerships along 122nd Avenue in Portland, including the Chevy dealership at Burnside with the iconic Ron Tonkin sign. The dealership is managed by Ed’s son Adam, one of several Tonkin younger family members working for the company.

The brothers also moved forward on a long held dream, the recent move of the company’s Gran Turismo dealership into larger facilities in a renovated building at 25300 S.W. Parkway Ave. in Wilsonville. Brad says the new location honors his late father, who first began selling Ferraris in Oregon in 1966. He declined to say how much it cost, but noted that manufacturers like Ferrari and Maserati require a lot of their franchise holders.

Although the car business is highly competitive, the Tonkins are glad to see sales increasing across the board.

“We’re happy to see all dealerships doing well again. It stimulates the market, it’s good for the country, it’s good for everyone,” says Ed.