The McKevitt auto dealership at 2700 Shattuck Ave. in downtown Berkeley is doing a reverse course – of sorts.
Starting March 1 it will stop selling Volvos, ending the existence of the longest continuing Volvo dealership in the United States. Instead, it will sell Chrysler cars like Jeeps, Dodge and Ram – much as the dealership did when it first opened in 1926.
The owner of the dealership, Fred Lavery of U.S. Auto Group, said Volvo sales have been in steep decline for years while Chrysler sales are booming. Switching from Volvo to Chrysler cars will mean higher tax revenues for Berkeley. Car dealerships produce more sales tax revenue per square foot than any other category of retail, he said.
“Volvo has been on a 10-year slide,” said Lavery, whose Detroit company owns eight dealerships around the country. “Their sales have been down 10 years in a row. That has resulted in losing 80% of their business in northern California – that’s new car sales. It’s a lot. It’s very sad.”
Lavery thinks the dealership will sell about 800 Chrysler cars a year. In recent years, they have only sold about 120 to 150 Volvos a year.
Part of the problem is that the ownership of Volvo has changed twice in the last decade, and each owner put off making new investments in technology, said Lavery. So the cars are not as coveted as before. Ford sold its Volvo division in 2010 to a Chinese firm for $1.8 billion, according to the New York Times. Ford had paid $6 billion for Volvo in 1999.
In contrast, Chrysler sales are booming in northern California, said Lavery.
“Chrysler has almost doubled its market share in California since the bankruptcy,” said Lavery. “It is substantially outperforming the market nationally.”
Chrysler is doing well nationally. Its January sales were up 8%, to 127,183 cars the best since 2008, according to USA Today.
H.W. McKevitt opened his car dealership in Berkeley in 1926 and started selling Chryslers, said Lavery. In 1956, he started to sell Volvos. Lavery purchased the dealership from the McKevitt family in 1984. In 2006, the McKevitt Volvo dealership received a commemoration for having been in business for 50 years.
The economic downturn that started in 2008 forced the Oakland Chrysler dealership on Broadway out of business, said Lavery. Chrysler started to look for a new location and struck a deal with Lavery, which had started to sell Fiats (the parent company of Chrysler) in 2011.
“Chrysler wants to be in Berkeley,” said Lavery. “They think it’s a good, vibrant market. They could have easily done this in Oakland or some other place, but Berkeley is where they wanted to be.”
The Chrysler dealership in Richmond protested the proposed Berkeley dealership, but relented after the carmaker negotiated a payment, said Lavery.
Volvo has a long association with Berkeley. In 2011, when Berkeleyside surveyed readers to find out what was “the most Berkeley car ever?”, the Volvo was the clear winner — a ’70s or ’80s Volvo station wagon to be precise, made in Sweden and probably orange.
Those with older model Volvos will still be able to get them serviced at McKevitt, but those still under warranty will have to go to Lavery’s San Leandro McKevitt dealership, which will continue to sell and service the car.
“We can see from sales tax receipts that Volvo sales have dwindled so we are very pleased to have a new Chrysler dealership at 2700 Shattuck,” said Michael Caplan, Berkeley’s economic development manager. “This dealership will be serving both Oakland and Berkeley so sales should increase.” Caplan also noted that the transition to Chrysler preserved auto technician jobs and offered the prospect for new hires. “Fiat’s investment and European design appears to be revitalizing a longstanding American car manufacturer, so we are optimistic for the larger national implications as well.”
Fiat dealership to take over old Nissan space on Shattuck (09.15.11)
What is the most Berkeley car ever? We have a winner (09.21.11)
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