A German geared up to help cars run right in Houston
Hans Richter grew up in a small German town just across the Rhine from Basel, Switzerland. He was raised on a farm, but he earned a master’s degree in mechanics, taught auto mechanics in Africa and eventually managed the service department at a Mercedes-Benz dealership.
There he met a German living in Houston who spent six years trying to convince Richter to open a repair shop with him. After visiting Houston twice — never in the summer — Richter came to the U.S. in 1992, speaking very little English but with big dreams. With the help of immigration attorney Charles Foster, Richter received a green card in 14 months, bought an empty lot, built a shop and in 1994 opened Texas-German Autohaus on Edloe Street with a German winetasting party catered by Spec’s.
In this edited interview, he talks about his business. Q: How did you come to Houston?
A: I was in my very early 40s, and my adventurous inner self said: “If you’re going to change your life again, you need to change it now.”
I bought a ZIP code list from a business in Austin that had the number of Mercedes and BMWs registered in each ZIP code. I made a map and right in the middle is where we had to be. I chose an area where we would be within an 8- to 10-mile radius of 58 percent of the Mercedes and BMWs registered in Houston.
We had no parts on the shelf and no credit, but we wrote checks for every 30-cent gasket. We built a parts room over a few months. It was very exciting for me. Q: Were there times when you thought about going back to Germany?
A: Oh, many times! It was not always easy. We lost a lot of money in the beginning. We were too big for the number of cars we had. We had spent a lot on advertising, and we had printed a newsletter. We bought addresses and pushed ourselves into the market. It took 13 years before we took a penny out. Q: Has the slower economy this year hurt your business?
A: Yes, I think this year was the first year we didn’t grow. I talk to customers; they are the perfect advisory board. They are teachers, lawyers, engineers, everybody. I have seen a lot of them lose their jobs, and they are struggling right now. Some are in their mid- to late 50s, and I’m not sure they are going to start over again.
Most of the German auto shops help each other, and we talk. I’d say we have 8 percent to 10 percent less in sales this year.
I can downsize a little bit, but not too much. I need 1.5 parts men, but there is no such thing, so we have two. We need 1.5 service advisers, so we have two. So we’re high in overhead, but I have won- derful employees, so I’m good. Q: Are American car owners different from European car owners?
A: In my old dealership, they would bring in their car, you do what’s needed and they pay the bill. It’s an honest, straightforward system.
Here, you have to call. You have to explain what needs to be done. And you have to give options. That’s a good thing. I’m an advocate of giving my customers the big picture every time they are here.
Over there, they blow out their engines much more. That’s unheard-of here, unless the owner does something unusual like drive without oil or overheat it too much. In Germany they blow their motor on the autobahn going 150 miles per hour! Q: What’s the biggest challenge in doing business in Houston?
A: It’s finding good people, which I’m blessed with. There’s no training system like an apprenticeship here that teaches the basics. Guys here learn hands-on while working on cars. But cars are a nice piece of engineering, and you should understand that engineering. There’s a chemical process in the combustion. The mixture needs to be right. There is physical load, there is leverage, and electronics now. Q: What advice do you have for someone who wants to start a business? A:
People who start businesses are the risk-takers in the modern world. They take risks with finances, they take a risk with the people they employ. They need capital to survive without a profit for at least three years. If they make money from the first day, I am happy for them, but that never happens. The costs are always more than you think.
I think Houston is one of the best places to do business. The city is growing, and we have been growing for 20 years. Chris Tomlinson is the Chronicle’s business columnist. His commentary appears on Sundays and Wednesdays. He also posts a daily news analysis at HoustonChronicle. com/Boardroom. chris.tomlinson@chron.com twitter. com/cltomlinson