May 15, 2014

Merced Toyota’s new look could be a good sign

The owner of Merced Toyota has poured about $2.5 million into upgrading his 30,000-square-foot showroom. He says Merced is on its way up, and he expects people to start buying cars again. That would be good news for Merced, which generated $2 million in tax revenue last year from the automobile and transportation industry, according to city records.

The dealer at Merced Toyota has poured about $2.5 million into upgrading his 30,000-square-foot showroom, and said he sees an improving economy in the region.

Bob Zamora, who bought the dealership in 2001, said the building on the lot was in need of a new facade. The roughly 30,000-square-foot showroom was renovated, he said, beginning the new year with a fresh face. The dealership celebrated a grand opening this week.

Zamora said Merced is positioned for recovery, so he was confident in investing so much money. “I’m very optimistic about the economy in the Central Valley,” he said. “It was hit harder than most, so we think it’s going to come back pretty strong.”

The showroom’s entryway is now consistent with new dealerships around the state. It has fresh furniture, lighting and tile. The dealership also added a place to receive maintenance customers, and a room for those looking for a Scion, which is part of Toyota’s brand.

“The facility that was here was adequate, but it was old,” Zamora said. “It needed updating. Toyota has a nice template to follow.”

Car sales have been improving during the last two years, he said, aided by the “pent-up demand” built by a lack of car sales in 2009, 2010 and 2011.

More and more, he said, dealerships lean heavily on their parts and service departments for income. With so many places online to find cheaper cars, dealerships have to keep sales prices and profits low.

Sales in the car industry are good for the city’s coffers. Of the $9.7 million the city made last year in sales tax revenue, $2 million was generated by the automobile and transportation industry, according to city records. The industry’s sales tax revenue, which grew by 10 percent from the previous year, was second in 2013 only to general consumer goods sales tax revenue.

And Zamora isn’t the only car dealer who sees light at the end of the tunnel for Merced’s economy. Merced Chevrolet owner Wil Dean finished his $1 million upgrade earlier this year. Merced’s economy has bottomed out and has nowhere to go but up, he said in April.

The city of Merced is playing it cautiously. Hinderliter, de Llamas & Associates, a tax consultant for the city, predicts a “softening” of big-ticket sales, like those for cars, in its reports to the city. “Although there will be vehicle sales, thank goodness, it’s just not going to be as robust as it has been in the last 18 months,” City Manager John Bramble said.

Merced has had other signs of an improving economy. A few new retail stores opened in the first part of the year: Panera Bread, Harbor Freight Tools and Chipotle Mexican Grill. A developer has plans to add an AutoZone at the corner of G Street and Olive Avenue.

Meanwhile, Merced Toyota has done well in the region. Dan Swartz, Toyota’s general manager for the San Francisco region, said the dealership sells cars at a better rate than the regional average.

The dealership is on about 5 acres and covered in roughly 350 cars on any given day. It employs 57 people, according to General Manager Mike Rutherford, and is looking for more employees for the sales floor and service center. To apply, go to www.mercedtoyota.com.

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