Now that more of the vehicle sales process is online, dealers can consider different approaches to in-person purchases and can find exciting opportunities in malls. The challenges can include architectural limitations or service needs.
Triple Five Group entered into a rental agreement in 2020 with Edmonton-based Prestige Auto Group for a 118,000 square foot Toyota dealership currently under construction. Mayfield Toyota is slated to open in September and will occupy two floors in a location previously occupied, in part, by a Sears department store. The site will include a 72 bay showroom and after-sales service.
One person said reproducing a similar design in their US malls would be problematic, but modifications are possible.
“The challenge with Mall of America is the space we have on the third floor of the building. It’s not accessible to get in and out, and American Dream is similar,” he said. “Creating a facility as we built it in Edmonton would be a challenge for us in the other two locations, but that doesn’t mean we wouldn’t consider some sort of variable. “
The person said Triple Five was in talks with “a number of luxury brands” for the New Jersey mall and also with a large US dealer group for central Minnesota. He refused to elaborate.
Dealer associations interviewed by Automotive News has seen both benefits and challenges for retailers who envision a mall as their new home.
“I’m not sure exactly how that would work to maintain and sell vehicles, but as long as malls need a few more tenants, it’s not a bad delivery model,” said Scott Lambert, president of the Minnesota Auto Dealers Association.
“There will always be questions about parking, but it seems like a pretty natural solution. I think it’s a definite possibility. It makes a lot of sense.” He added that two- and three-story dealerships are nothing new to the state.
“It’s not such a unique floor plan for dealerships, but fitting into a flagship store or once a flagship store in a mall is a good use of space,” he said. -he declares. “It’s probably a little cheaper for a dealership to renovate than to build a new facility. “
While the underutilized mall space might be a good choice for automotive retailing in theory, it won’t necessarily work in practice, said James Appleton, president of the New Jersey Coalition of Automotive Retailers.
Displaying large numbers of gasoline-powered vehicles in a shopping mall could create a fire hazard, requiring a major safety upgrade, Appleton said in an email, although that may not be a problem for electric vehicles.
Depending on how it’s done, he warned, the move to shopping malls could go against the demands of franchisors.
“Most automakers will not allow reserved spaces for sale,” he said. “While mall locations may be suitable for sale, they would not be suitable for service.”
But if the architectural issues can be solved, partnerships between malls and dealerships could become a trend, said Michael Kehoe, broker / owner of Fairfield Commercial Real Estate Inc. in Calgary, Alta.
“The synergistic benefits of traffic between a car dealership and a shopping center are perfectly aligned,” he said.
“The service visit lasts at least three hours, which provides a great shopping opportunity for the mall. There is great potential for cross-buying there. “