B.C.’s largest automotive dealership group has taken over the only supercar dealership in Washington state.
The term “supercar” defies easy explanation but is usually applied to powerful elite sports cars or grand tourers, often from high-end makers such as Ferrari (Nasdaq:RACE) or McLaren, which appeal to vehicle enthusiasts and collectors with very deep pockets.
While Craig Stowe, founder of the Luxury and Supercar Weekend, dubbed Vancouver North America’s supercar capital in 2016 for having the highest number of supercars per capita, sales growth may have peaked.
Scotiabank’s (TSX:BNS) Global Auto Report released last month said luxury car sales in B.C. have grown 25% this year. But it warned that growth would moderate as B.C. provincial activity softens.
“I think certainly the growth trajectory has slowed,” said Dimitri Kotsalis, area general manager for OpenRoad Auto Group. “We’re not going to see the kind of increases we’ve seen in that last eight or 10 years. I think we’ll continue to see steady, slower growth but there’s still room to push the needle a little bit further in Vancouver.”
Expected slower growth in B.C.’s luxury and supercar market is causing OpenRoad Auto Group to look south. The group recently bought a Bentley, Lamborghini and Rolls-Royce (LON:RR) dealership in Bellevue, Washington.
Washington provides a newer market for the supercar industry, which has only recently started to develop significantly in that state.
OpenRoad saw Washington’s aging population with growing disposable incomes as a market it couldn’t pass up.
Despite the threat of increased trade barriers from the new U.S. president, Kotsalis is optimistic about the stability of the market based on the early days of the new administration.
“So far, what we’ve seen in early days is that the market continues to perform and seems like quite a stable market,” said Kotsalis. “Whether there will be any effect in the future remains to be seen, but for now we’re surely comfortable.”
Supercar sales in B.C. grew at five times the pace of all new car sales in 2016. That has not eaten into new car sales from lower-end brands, Kotsalis said, because supercars are usually bought in addition to, rather than instead of, other vehicles.
Blair Qualey, president and CEO of the New Car Dealers Association of BC, said low import taxes in Canada have contributed to Vancouver’s success in the supercar industry.
Countries like Malyasia and Indonesia have high import taxes to promote sales of domestic car brands. China and Hong Kong have luxury sales taxes that apply to supercars. Canada has neither.
“The supercar retail industry has been swinging way above [its] weight for some time now in the Lower Mainland.”