The loss of most of the Los Gatos Boulevard car dealerships in recent years has dealt a blow to the town's sales tax revenues, but there is a bright side to the local automobile business. Los Gatos Luxury Cars is reporting increases in sales that give some indication high-rollers are spending money again.
The luxury car dealership's primary showroom at 66 E. Main St. is operated by the Qvale Auto Group, which took over the Silicon Valley Auto Group's Los Gatos operations in January 2010. "When the downturn came, that company had issues," Jeff Qvale said. "Those times were difficult."
The Qvale Auto Group also operates British Motor Cars in San Francisco. Qvale said the Los Gatos expansion was important to the company "because we were already the Bentley dealer in San Francisco and it gave us a nice tie-in. We like Los Gatos because it's a bedroom community for Silicon Valley. People knew [66 E. Main St.] had been a high-end store for many years, so this is a good place for us."
Operating as Los Gatos Luxury cars, Qvale reports that Bentley sales have increased 21 percent. Aston Martins have been moving, too, with Los Gatos now ranked third in the nation in terms of sales. Lotus sales have pushed that segment of the local dealership into fifth place nationally.
To put that into perspective, last year Los Gatos Luxury Cars sold 18 Rolls Royces. So far this year they've sold seven. According to Ovale, a basic Rolls s $246,000, and theytop out at around $525,000.
"The economy is getting better," Qvale said. "We did all right last year, and we're happy that we're doing OK when the economy isn't on all cylinders yet. It's going up, but it's not consistent every month."
Qvale thinks there has been pent-up demand for luxury cars, but that people who can afford them were being prudent. For one thing, it looks bad for a CEO to be driving a new luxury car and laying off employees at the same time. "We're seeing a lot of people coming out of the woodwork now," Qvale said.
To that end, in January Qvale reopened the 2,000-square-foot showroom at 47 E. Main St. that closed at about the same time the Silicon Valley Auto Group shut down the showroom at the corner of N. Santa Cruz and Bachman avenues. The 47 E. Main St. showroom now houses Lamborghinis, with the 66 Main St. showroom housing Bentleys, Lotuses and Aston Martins. The Rolls Royces are at 620 Blossom Hill Road with the auto group's service center.
The dealership also sells pre-owned luxury vehicles and takes consignments. "Consignments area good way to build business and maybe later the customer will come back and buy something," Qvale said.
Another way the auto group is trying to build business is by becoming involved in the community. In March, it hosted a fundraiser for the Friends of the Library that raised approximately $20,000. "We do a lot of events because event marketing is a good way for people to see the cars," Qvale said. "It helps the community and gets exposure for our cars, so it's a win-win."
Last week the dealer held a customer appreciation dinner at Testarossa Winery, where a few cars were on display. "We're re-establishing contacts with the community and prior customers who we hope will tell their friends and it will mushroom from there."
There are currently 54 cars on the dealership's lots, with two new Aston Martins scheduled to arrive in June. Los Gatos Luxury Cars employs 27 people.
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