Like birds of a feather, auto dealers traditionally choose to congregate en masse on one street — “auto row.” Unlike some industries where proximate competition is the kiss of death (video stores, for example), dealerships clumping together on auto rows benefits both businesses and customers, says Jack Stanko, president of Reno’s Champion Chevrolet.

“It makes for a competitive market,” he says. “And the more advertising each one of the companies does draws more people to the general area.”

While auto rows are still the norm in smaller metropolitan areas, such as Reno and Carson City, bigger cities are seeing the development of a newer concept, the auto mall, where as many as two dozen dealerships will buy a huge plot of land and set up business in one location. The only auto mall in Nevada is located in Henderson, a prime spot for tapping the 2 million-plus people who live in the Las Vegas area. (Note: Fallon’s “auto mall” is a marketing moniker used by a family-owned business.)

In Northern Nevada, the need for more space is starting to have an impact on Reno’s auto row, Kietzke Lane, with some dealers, such as Reno Mazda/Kia, planning a move south along South Virginia Street.

Heading south

“I think you’ll see more movement out to South Virginia over the next few years,” says Wayne Frediani, executive director of the Nevada Franchised Auto Dealers Association. “Guys are wanting to build bigger stores. They just need more asphalt, and they don’t have enough room on Kietzke.”

As Reno Mazda/Kia builds its new dealership, it will adhere to guidelines set down by its parent company, in keeping with a trend to standardize the look and feel of franchises. It used to be that dealers could give vent to their creative impulses in designing their stores. Not any more.

“We are building two new buildings according to their specs,” says Dan Lucha, Sr., Reno Mazda/Kia’s general sales manager. “They give you floor plans and how they want the building to look. They want all their stores to look the same.”

Just as the gaming industry has seen huge consolidation in recent years, so has the auto industry, says Champion Chevrolet’s Jack Stanko.

“You’ve got a lot of public companies that are out buying dealerships — the mom and pop dealerships that made the franchise system strong years ago,” he says. “It’s probably going to end up with four or five major companies owning them.”

While 2006 was tough for some auto manufacturers — Ford, in particular, which posted a staggering $12.7 billion loss in 2006 — Stanko thinks Northern Nevada likely will escape the inevitable downsizing in dealerships that will occur as manufacturers look to save money.

“In Northern Nevada the market is not that big yet, where you have multiples of the same franchise in one area,” he says.

Plus, business has been very good for Northern Nevada’s auto industry (which includes dealers, repair shops, tire stores, etc.). A strong economy and steady influx of new residents has made the industry the second-highest generator of sales tax in the state, behind the casino industry. That gives auto dealers some serious clout in their communities, as demonstrated by Carson City’s deal last year with Dick Campagni, owner of four dealerships in the city. Campagni received $3.6 million in redevelopment funds to buy land for a new Toyota dealership on South Carson Street. In return, Campagni agreed to keep his dealerships in Carson City for the next 15 years.

Impact on Carson

“In Carson City, we have a very robust auto sales sector that represents approximately 30 percent of overall retail sales,” says Joe McCarthy, Carson City economic development and redevelopment manager. “Carson City’s auto sales sector is in the unique position that we sell twice as many cars per capita as other communities in the state. Dick Campagni is the largest generator of sales tax in Carson City.”

McCarthy says the city expects to recoup its investment from growth in sales taxes in a minimum of seven years. The policy is intended to keep Carson City’s auto dealers from relocating south of town across the Douglas County line, as several big box retailers have done. McCarthy also notes that Campagni, like most auto dealers, also is a major philanthropist in his community.

“That’s something a lot of people don’t realize,” says Wayne Frediani, Nevada Franchised Auto Dealers Association executive director. “Our auto dealers are very involved in community causes.”

While the future still looks bright for Northern Nevada’s auto dealers, they might experience a rare blip in ’07, Frediani says.

“I’ve been here 19 years, and our sales have gone up every year,” he says. “This year is probably the first year there might be a slight decline in new car and truck sales nationwide, but not big numbers — 1 or 2 percent.”

Frediani says customers are taking a longer look at smaller sport utility vehicles and hybrids — which the factories can’t make fast enough for the demand — but he doesn’t see Northern Nevadans changing their tastes radically. It’s still SUVs and trucks making up the majority of sales. At Champion Chevrolet, for example, sales of trucks outnumber cars four to one.

That leaves dealers like Stanko pretty optimistic.

“I just see our numbers going up; I don’t foresee any downfalls,” he says.

Reno Mazda/Kia’s Lucha agrees.

“Northern Nevada is unlike the rest of the country,” he says. “It doesn’t take the dips that the rest of the country takes.”