What’s in store for West Ashley’s long stretch of car dealerships?
by Bill Davis | News Editor
Which way is West Ashley’s “Auto Mile” headed?
On one hand, over a hundred acres of dealership parking lots could shrink and be repurposed for other commercial uses as auto manufacturers begin side-stepping dealerships for direct-to-customer deliveries.
On the other hand, an experienced and massively successful car dealer is making a play to add a multi-million-dollar, two-story dealership on the Auto Mile’s back stoop.
So … which way is it going to go?
Big changes in the automotive industry could deeply and directly affect the future of West Ashley’s Auto Mile, which has been this part of area’s primary commercial feature for decades.
Jim Farley, the latest chief executive officer of Ford Motor Company announced earlier this year that his plan was to strip the sale of electric models from dealerships by selling and delivering them directly to customers.
Farley says that going through dealerships costs Ford an additional $2,000 in distribution costs per vehicle, compared to Tesla, a company seizing on the direct-to-customer sale model.
Last year, Ford projected that a full 40-percent of its worldwide sales will be electric vehicles by 2030. If anywhere near 40-percent of sales across the board skip the dealerships, then the Auto Mile could see massive downsizing over the next 10-20 years.
Farley says that going forward “the standards are going to be brutal” for dealerships wanting to stay within the Ford family.
Amazon created the paradigm, Carvana showed how it could be done, and Covid helped push customers to buy online. (Because, really, do you need to drive a Toyota Camry to know that it drives like every other Camry?)
Add to this, pundits and prognosticators foreseeing a day in the not-so-distant future where dealerships could shrink down to the size of a car rental lot. There, customers could come in and test drive a version of the car they want – kick the tires, so to speak.
Then the shopper would retire to the showroom where they could press a few buttons for the exact car they want and VOILA! a few days later, the make, model, and trim would be dropped off at their house.
Depending on who you talk to, the crystal ball-gazers are either dead-right or dead nuts. Time will tell.
In April, Ford announced that their sales of electric vehicles had grown by 139 percent, thanks to uber-popular Mach-E and F-150 Lightning models. Finding either one of those bad boys on a lot in the area is a tough, tough task as we will see.
But Ford dealerships aren’t the only ones that could be hit. GM had sold significantly more electric cars in America than Ford until the introduction of the Mach-E and the electrified pickup. And Nissan for years had the most sold EV in the world, the LEAF.
So, it looks like everyone’s bottom line could be on the chopping block.
It’s hard to think of West Ashley without the Auto Mile, especially after the drastic changes taking place at the Citadel Mall. But no one ever thought they would see the Auto Mile downtown on Morrison Drive going anywhere.
Until it did.
Add to that the ongoing renaissance of Savannah Highway, from Avondale’s shops to the Harris Teeter, and on up to the Whole Foods Market, which is a block short of the beginning of the Auto Mile.
Additionally, consider that a house is on the market in Ashley Forest behind Avondale’s shops that is being offered for $500 a square foot, and its first day of showings had BMW’s crawling all over it.
The wave is coming.
So, might there soon come a day where the highest and best use of the Savannah Highway-fronting lots could become office buildings and job centers?
Don’t get it skewed, car dealerships can make tons of money. But what if the dealers reckon the value of their obviously valuable spots could be better utilized?
Take for example Jimmy Palassis’s impressive bid to revitalize a 10-acre dormant car dealership spot along Savannah Highway, bordering Orleans and Dupont roads, with a massive seven-story luxury hotel and convention center with views of the Stono River.
Rumored to cost close to $50 million, the project is being hailed as the “Charleston Place” of West Ashley, with hopes of it having the same effect on local dining and retail options on our side of the river.
Palassis has already spent decades in West Ashley, raising his kids here and running successful hotels for nearly four decades here. His business acumen has also positively impacted that stretch of Savannah Highway with his Town and Country Inn Suites and Home2 hotels.
It’s hoped that this latest project, rumored to be on greased skids in County Council and zooming for approval, will turn a block of land blighted by inaction for years, into one of the centerpieces of West Ashley’s revitalization.
But Palassis isn’t the only one betting long on Savannah Highway. Graham Eubank is not only the president of Palmetto Ford Lincoln on the Auto Mile, but he’s also worked there for the 32 years since he graduated from Clemson
Eubank has known Ford CEO Farley for a long time. He says Farley overstated Ford’s plans going forward to “pacify Wall Street,” and that there was an internal correction on the future of EV sales with dealers.
Eubanks holds that EV adoption will be slower in South Carolina, due to issues like limited infrastructure and the cost of making batteries. Additionally, he sees peoples’ tastes every day.
“If I had 3,000 Raptors, I’d still sell out of them,” Eubank says. The Raptor is a muscled-up version of the F-150, with four-wheel drive, a massive grill, an equally large engine, and an aggressive cool trim package.
Right now, every dealership is struggling to fill their lots with new cars due to a computer chip shortage slowing worldwide production.
Like some of the other dealerships interviewed for this story, Eubank points out that selling new cars is only part of their business.
There’s the body shop – electric cars need to be fixed just as much after a wreck as a gas model.
There’s the used car lot, where customers are more insistent on seeing how the car feels before they sign the line that is dotted.
Eubank does say that the service department will take a hit going forward, as there are fewer “moving parts” in an EV.
Eubank also holds that reports like Tesla’s enduring problems with self-driving options and crashing will make local customers more skeptical.
Paul Canovali, the general manager at Hudson Nissan sees a more nuts-and-bolts problem with repurposing dealerships. And that is the technology buried underground that separates water from oil in the service department.
That sounds like a dirty job.
Canovali thinks that big chunks of the legacy car market will still want to come in, build a relationship with the dealer.
He also says that “anything is possible, but it is impossible to foresee.”
Robert Summerfield is not only the head of Planning, Preservation, and Sustainability department down at City Hall, he’s also an owner of one of those beefy Mach-E’s. But he had to search the internet and rely on luck to land his with a test drive.
How “beefy” is the all-electric Mach-E, a crossover of the venerable Mustang line and a small … SUV? Consider this: it’s 0-60 mph time is 3.7 seconds.
Remember the Ferrari that Tom Selleck drove in “Magnum P.I.?” Its 0-60 time was 7.5 seconds.
That means that the city’s director is TWICE as quick as Tom Selleck. And he’s got kids in there!
“I scoured websites for several months,” says Summerfield. “It was such a new model I wanted to drive it, sit in it, and see how it feels.”
Summerfield got lucky. Two Mach-E’s popped up on a Ford lot in Moncks Corner; one was the extended range and the other was the regular range. The extended range “sold three minutes before we got there.”
Once he saw that the regular-range model could move and handle like a Mustang of yore, and he could fit his daughter’s car seat in the back with plenty of room, he bought it.
Bonus: it didn’t cost between $70-$90,000 like a comparable Tesla.
Summerfield says the city just finished its next long-range plan, one that includes the street-front lots along Savannah Highway that dealerships have as some sort of “job centers.”
Not a job center like in the past, says Summerfield. Gone are light industrial uses for this strip of road, but something more akin to computer-driven businesses and boutique shops.
He says that if there is drastic change to the Auto Mile brought on by outside forces, dealership owners could “scale down while maintaining productivity in different ways.”
Summerfield recently sung the praises for Baker Motor’s proposed design for a new high-end dealership on a smaller boutique lot on Markfield Drive, across the street from Hendrick Honda of Charleston.
The dealership could carry auto lines like Rolls Royce and several Italian jobs.
With an estimated budget in the millions, it’s obvious that Baker Motor believes in the Auto Mile. Still, over the past few years, they’ve hedged their bets by sinking more than $10 million dollars on dealerships in Summerville and Mount Pleasant.
Representatives from both Baker Motors and the Hendrick group refused to comment for this story.
So which titan of the Auto Mile is right, the car dealer or the hotelier?
What if they’re both right and West Ashley gets the best of both worlds?
Apparently, the Auto Mile is still leading to a bright future.
