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As Stars Align, Auto Group Races Into Town

CALIFORNIA EUROPEAN AUTO GROUP

President: David Murphy.

Revenue: $165 million in 2010.

No. of local employees: 30.

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Investors: The Hickingbotham Family, David Murphy, Gary Whitaker.

Headquarters: Rancho Mirage.

Year founded: 1996.

Company description: Luxury auto dealer with stores in the Palm Springs area, Orange County and San Diego.

Key factors for success: Maintaining a clear focus on the customer’s needs, wants and desires; providing an exhilarating experience for the customer.

In a move that’s betting on a rebounding economy, San Diego European Motorcars Ltd., which deals in Aston Martin, Jaguar and Lotus, has opened for business in Kearny Mesa.

It is the third location for the privately held California European Auto Group, which has its other stores in Rancho Mirage, near Palm Springs, and Newport Beach. The group reported $165 million in sales last year, Vice President Gary Whitaker said, which is down from the exceptional years of 2005 and 2006, when sales hit $220 million.

It seemed the stars aligned to make a third dealership open its doors in July at the corner of Balboa Avenue and Convoy Street. Some three and a half acres of real estate, which formerly housed a Saturn dealership, became available at an affordable lease rate. Also available were the Jaguar and Aston Martin franchises for San Diego. And the nation’s economy sputtered with signs of life. “It feels like it’s toward the bottom of the economic downturn,” Whitaker said.

He said that the business owners wanted to be part of automotive product launches planned for the next 18 months.

The owners, who include Whitaker, hope to have $20 million in sales during the second half of 2011. Within 18 months they’re aiming for $100 million in yearly sales, Whitaker said. The owners hope to grow from a current 30 employees to 100. Gary Sorter is general manager.

Though the asphalt is thick with luxury cars, San Diego European Motorcars’ main office is starting out in a trailer. “The whole facility will be completely revamped,” Whitaker said.

The owners’ first step was establishing a service department, which received a $650,000 investment. Upgrades included 10 new lifts.

The other buildings are waiting for work. Salesman David Irving said the building housing Aston Martins will get an extensive remodel with a good deal of glass, in the spare architectural style of Ludwig Mies van der Rohe.

Filling a Niche

San Diego European Motorcars fills a need among local Jaguar enthusiasts, said Stick Holmes, president of the San Diego Jaguar Club, which has 180 members.

At one time Penske Automotive Group Inc. operated a Jaguar dealer in Kearny Mesa. Then Penske — a publicly traded company based in suburban Detroit, with 327 franchises — made the decision to convert its Jaguar store into a Mini dealership.

Jaguar drivers were without a convenient sales and service spot for about a year, Holmes said. Then family-owned Hoehn Motors opened Jaguar Carlsbad. For East County residents such as Holmes, however, it was still a long drive. So the owner of two Jaguars, including an older model, was gratified to hear a new Kearny Mesa store had opened.

Jaguar and Aston Martin business is “definitely there,” reported Matt Guerrero, service manager at San Diego European Motorcars. “Lotus business is slowly coming in.” But it is indeed there. A visit to the department showed all bays occupied, and a bright orange Lotus parked near the waiting room, its rear engine compartment yawning open.

The dealership sells high-end used cars, too. As of last week a 1991 Rolls Royce Corniche with just two owners was on the lot.

Some of the used cars came to San Diego from California European’s desert store, Irving said.

It was a matter of necessity.

“When it’s 120 degrees,” the salesman said in his Yorkshire accent, “you don’t sell many black cars.”

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