Land prices and computers are putting the kibosh on auto rows, those legendary stretches of highway, such as Rte. 7 near Tysons Corner, that are lined with new-car showrooms and used-car lots on either side.
Office-building and housing developers want those properties as much as, if not more than, consumers want the cars and trucks that fill them. And the developers are willing to pay big bucks to get what they're after.
How big? Ask Steve Horvath, owner of a nearly 3 1/2-acre site that supports his Tysons Toyota dealership.
"I bought this land for $600,000 in 1971. Now, I have people coming around offering me as much as $6 million," Horvath said.
It's happening all over the Washington metropolitan area, and all over the country, according to officials at the McLean-based National Automobile Dealers Association, which represents most of the franchised auto and truck dealers in the United States. These real estate pressures may dramatically change new-car sales -- reducing the number of dealerships and eliminating car lots filled with a wide selection of new cars.
"The great auto rows of the past have changed," said a 1985 NADA report on auto retailing in this country. "Today, suburban dealers, and even those in smaller metro markets, face a new fact of life: The real estate on which they are located may be worth more if used some other way," the report said.
Partly as a result, smaller auto dealers are selling out and closing up. Dealership ranks nationwide, beset with the growing cost of doing business in a high-risk industry, are shrinking.
Of the 29,600 new-car dealerships that were open in the United States in 1975, an estimated 24,725 remain, according to NADA figures. Some 50,000 new-car dealerships were operating in this country in 1950.
Urban car dealers, who face some of the highest land costs, have been decimated. For example, there were 34 dealers in the District in 1966. Nine dealers remain in the city today, according to figures provided by the Automotive Trade Association of the National Capital Area. Survivors of the Shakeout
In all, an estimated 185 dealers now are selling cars and trucks in the Washington metropolitan area, according to ATANCA officials. That number, too, is likely to decline in keeping with the national pattern, ATANCA officials said.
Survivors of the long-term shakeout most likely will be multifranchise dealerships, which sell vehicles made by a variety of manufacturers. The multifranchisers typically have two or more showrooms in different locations within a metropolitan area. But, typically, those showrooms are becoming too expensive to maintain.
Many multifranchise dealers, like Horvath, are considering building or buying into auto shopping centers to stay in business. Some local examples of that approach, the Montgomery County Autopark in Silver Spring being chief among them, now exist.
The auto park is exactly that -- a place where customers can shop for a number of makes and models, as well as have their cars serviced or repaired, all on one self-contained plot of land.
Other dealers are studying a more radical solution -- splitting off their service facilities and reestablishing them in less costly locations, and selling their cars and trucks, via computer, in department-store settings in general merchandise shopping malls.
General Motors Corp. and Ford Motor Co. are investing millions of dollars in pilot programs to test the so-called "satellite dealership" option, the department-store strategy.
Ford has four demonstration department-store projects, operating in Florida, Illinois, California and North Carolina. GM wants to set up 15 similar projects in large and small towns, including some in the Washington-Baltimore area.
Ford and GM officials said that the aims of their satellite dealerships are nearly identical. They say that they want to increase the quality and speed of new-car delivery to buyers and that they want to help their dealers trim operating costs, which often are passed on to consumers in the form of higher prices.
"The manufacturers are trying to clean up their act" in the area of product quality, said Louis Ross, executive vice president of Ford's North American Automotive Operations. "But what good is it to improve the quality of your product if the customer is going to run into problems in the delivery of the vehicle?"
GM, Ford and other auto industry officials said that they are aware of the after-sale problems affecting the domestic auto industry. They said that in the future, manufacturers will try to eliminate those complaints by reducing the barriers between the manufacturer and the customer.
That means manufacturers will increase control over how their cars and trucks are sold, Ross said. Initially, that will mean more computerization of both sales and dealer service operations. Traditional vehicle distribution patterns, how and to whom new cars and trucks are sent for retail sales, also will be affected, Ross said. Forcing Dealers Off Their Land
It may be economics that forces dealers to do what the manufacturers can't make them do, said Donald W. Hudler, GM's executive director of sales and marketing. "It just doesn't make economic sense to keep automotive sales and service operations on expensive real estate," he said.
Skip Jones, sales manager of the sprawling JKJ Chevrolet dealership on Rte. 7, agreed. "Land out here is going for $100 a square foot. How long can you maintain a car dealership in an environment like that? It's ludicrous," Jones said.
An auto park, under those circumstances, "becomes a very viable idea. I think you're going to see more of that kind of thing in the future," Jones said. But, Jones added, "You also will find dealers moving into existing" general merchandise shopping malls.
The department-store auto outlets mostly will resemble high-technology catalogue stores, Jones said, adding, "You probably won't have any cars there."
Instead, buyers of cars and other vehicles will be able to go to a department-store car sales room, consult some brochures, talk to one of a small number of available salespeople, and then use a computer to order a vehicle built to personal specifications, according to Jones and others.
"With the tremendous amount of people walking through the malls, this could be a good selling point," Jones said.
But most area dealers and their representatives disagree with the notion that traditional dealerships will disappear altogether.
"How comfortable would you feel walking into a 'department store' showroom and punching your request into a computer? I don't think people are going to like that, because it's too impersonal," said Herb Gordon, who has four franchises in the Montgomery Autopark.
That is not to say that Gordon or other auto-park dealers, or, for that matter, dealers throughout the Washington area, oppose computers.
JKJ Chevrolet recently installed a $2 million system designed to improve its control over inventories and its communications with GM. Steve Smith Pontiac in Fairfax is installing a similar system. Computers Streamline Sales
Tischer Autopark, which sells BMW, Porsche, Audi and Subaru cars in the Montgomery Autopark, has installed a computer system that keeps "repair case histories" on individual cars serviced at the dealership. And Gordon has computerized nearly every conceivable function in his four auto-park stores and related facilities.
The computers can be used to streamline dealer operations, thus offsetting real estate and other operating costs. The instruments are also crucial in the battle to improve quality and customer convenience, said Rudolf Tischer, owner of Tischer Autopark.
"You can make so many mistakes doing things by pencil and paper," Tischer said. "That creates customer aggravation, and that loses sales.
"With the computers, we can get many more things right the first time. They help our people do a better job of helping our customers. We still have some problems, but not nearly as much as we used to," Tischer said.
Tischer said he does not see the eventual elimination of dealerships, per se. But computers could, and should, help reduce the land use of dealerships in the future, he said.
"Computer shopping for cars will gradually come, because it's a necessity," Tischer said. "There is no need to store 200 cars on a lot when, maybe, with computers, you might only need 50."