Lux­ury auto sales rev up in Hous­ton

Lux­ury car em­pire, grow­ing with Hous­ton’s wealth, serves cus­tomers ‘where bud­get is not a fac­tor’

Houston Chronicle Sunday - - FRONT PAGE - By Dy­lan Bad­dour

‘Dis­ney­land of Porsche’ lat­est in fleet of high-dol­lar car dealer projects.

TODD Blue, a former real es­tate de­vel­oper and ex­ec­u­tive at a fam­ily busi­ness, started col­lect­ing clas­sic cars about 15 years ago, which soon sparked loftier au­to­mo­tive am­bi­tions.

On Satur­day, he opened the doors on a new com­pany head­quar­ters for his 14-store, Hous­ton-based group of lux­ury car deal­er­ships — a two-story Porsche store des­ig­nated by the Ger­man brand as one of six U.S. flag­ship lo­ca­tions.

“This is lit­er­ally like the Dis­ney­land of Porsche,” he said re­cently, strolling the 60,000-square-foot fa­cil­ity in a blue Ital­ian suit as work crews at­tended to fin­ish­ing touches. Blue built his new won­der­land next to the Lam­borgh­ini deal­er­ship he also owns, the top-sell­ing Lam­borgh­ini deal­er­ship in the coun­try, ac­cord­ing to a rank­ing of 47 deal­er­ships by the brand. And Blue, the 48-year-old CEO of indiGO Auto Group, en­vi­sions greater growth ahead.

Even the in­ces­sant oil slump hasn’t taken the edge off Hous­ton’s mar­ket for high-end toys — and the new Porsche North Hous­ton comes amid sev­eral high-pro­file, high-dol­lar lux­ury car projects emerg­ing across town.

The na­tional deal­er­ship em­pire Sonic Au­to­mo­tive plans to build a midrise, multi­brand lux­ury show­room on U.S. 59, across the street from its seven-story Audi deal­er­ship. The Post Oak Ho­tel, un­der con­struc­tion near the Gal­le­ria, also plans to

fea­ture a glass-cased twos­tory show­room with Roll­sRoyce and Bentley brands. Hous­ton’s Helf­man Auto Group re­cently fin­ished a new Maserati deal­er­ship on the Katy Free­way and is pre­par­ing for a to­tal ren­o­va­tion of its Su­gar Land Fiat lo­ca­tion to in­cor­po­rate the Maserati brand.

“That’s a pretty good in­di­ca­tor of what the lux­ury car mar­ket has been and what we an­tic­i­pate it will be,” said Steven Wolf, CEO of Helf­man and pres­i­dent of the Hous­ton Auto Deal­ers As­so­ci­a­tion. “Seems like ev­ery­thing is mov­ing in the right di­rec­tions.”

It’s a mar­ket for the top tier of spenders in Hous­ton, a city noted for Amer­ica’s fastest-grow­ing pop­u­la­tion of mul­ti­mil­lion­aires in 2014 at the height of the shale boom. Boom gone, wealth re­mains, and the high­est level of in­come earn­ers has seen dis­pro­por­tion­ate growth in re­cent years.

In Har­ris County, 7.3 per­cent of house­holds took home more than $200,000 per year in 2015, the lat­est year with avail­able data, ac­cord­ing to the U.S. Cen­sus Bureau. That was more than dou­ble the rate of 10 years prior, 3.5 per­cent in 2005.

Over that same pe­riod, Hous­ton’s me­dian house­hold in­come grew 30 per­cent to just $56,629, and the largest sin­gle in­come block re­mained those earn­ing be­tween $50,000 and $75,000, con­sti­tut­ing about 17.5 per­cent of county earn­ers in both 2005 and 2015.

The me­dian earner prob­a­bly aren’t the ones fu­el­ing the mar­ket for lux­ury cars.

“We have ser­vices for the cus­tomer where bud­get is not a fac­tor,” Blue said. “It’s Hous­ton busi­ness­peo­ple. You take care of them and they’ll take care of you.” Blue be­gin­nings

Blue’s affin­ity for au­to­mo­biles sprouted far from the lux­ury sec­tor, at a fam­ily owned Ken­tucky steel mill, in con­stant com­pany of heavy metal and in­dus­trial ma­chines. As a kid, he watched as auto plants sold scrap steel to be melted down at his fam­ily mill.

The fam­ily busi­ness was sold in 1998 while Blue was ex­ec­u­tive vice pres­i­dent, so he took the money he made and bought some clas­sic cars. It started with a 1976 lim­ited edi­tion Bi­cen­ten­nial Cadil­lac El Do­rado and a 1969 Maserati Ghi­bli Spy­der, and Blue paid a va­ri­ety of spe­cialty shops to re­store the en­gines, the bod­ies and the in­te­ri­ors.

“I said to my­self, ‘To af­ford this hobby, I bet­ter make it a busi­ness,’ ” Blue said.

He auc­tioned off the re­stored Maserati for a profit, and the busi­ness was born.

Blue founded indiGO Clas­sic Cars in 2006, buy­ing rides and even im­port­ing them from Europe, then sell­ing them at auc­tion. But he set his sights on a store­front.

So Blue posted a clas­si­fied ad on the on­line fo­rum of the Young Pres­i­dents Or­ga­ni­za­tion, a club for chief ex­ec­u­tives. He was look­ing for a high-line deal­er­ship in a big-city mar­ket, he wrote. A mem­ber from Atlanta, who had re­cently bought a port­fo­lio of stores, an­swered his ad. He of­fered a store he’d ac­quired in Hous­ton but did not want. So Blue bought it.

In 2010 Blue moved into a 13,000-square-foot Porsche store on the North Free­way, about 2 miles south of the bud­ding Grand Park­way.

“Hous­ton hap­pened by ac­ci­dent, and I’m grate­ful it did,” Blue said. “There’s some­thing in the wa­ter that is cel­e­bra­tory of the en­tre­pre­neur and of busi­ness­peo­ple that take a risk. Other cities are not like that.”

Upon ar­rival, Blue called Kelly Wolf, a mem­ber of the tight-knit lux­ury au­to­mo­tive clique in Hous­ton whom Blue had met at a Porsche brand meet­ing in Ger­many. The two got to­gether,and Blue out­lined his vi­sion to ex­pand his newly ac­quired deal­er­ship into a na­tional group.

“I thought, clearly he’s a dreamer. I had a lot of ques­tions about his plan,” said Wolf, 39, and now the chief op­er­at­ing of­fi­cer of indiGO. “If I hadn’t taken that chance, I’d have re­gret­ted it for­ever.”

In 2011, indiGO Clas­sic Cars be­came the indiGO Auto Group with the pur­chase of the Lam­borgh­ini deal­er­ship just down the highway. Blue tapped an­other lo­cal lux­ury auto in­sider, Zack Lawrence, as gen­eral man­ager. He shook up the staff and brought an­nual sales there to 78 ve­hi­cles in 2016, up from 12 in his first year. Never say no

To­day, Lawrence, now 37, is look­ing for a spike in sales next year after Lam­borgh­ini re­leases its first SUV in two decades. At the deal­er­ship, cars go for be­tween $200,000 and $600,000.

“We don’t just sell cars — we sell a lifestyle ,” Lawrence said.

IndiGO ap­plied that phi­los­o­phy on­ward, turn­ing its stores into a cus­tomer ex­pe­ri­ence where no buyer is told no.

In 2013, indiGO bought a nine-store group in Ran­cho Mi­rage, a sub­urb of Palm Springs, Calif., which in­clud­edRolls-Royce,Bentley, As­ton Martin, Maserati and more. In 2015, the com­pany bought and con­sol­i­dated both Porsche deal­er­ships in St. Louis, and in 2016 bought BMW of Palm Springs.

The com­pany sticks with Porsche as an an­chor tenant when it starts in a new city, Blue said, be­cause Porsche “has found the per­fect equi­lib­ri­um­be­tween sup­ply and de­mand. Porsche al­ways builds one less car than there is de­mand.”

That en­thu­si­asm in part earned indiGO a des­ig­na­tion as a rare Porsche flag­ship, a store with ex­tr­a­close fac­tory ties, ac­cess to pre­mium lim­ited lines like the Porsche Man­u­fak­tur divi­sion and ex­tra op­tions for cus­tomiza­tion.

“The all-new Porsche North Hous­ton will be one of the largest Porsche deal­er­shipsin the U.S .,” Porsche Cars North Amer­ica said in a state­ment. It will“be a pro­to­typ­i­cal deal­er­ship, which show­cases Porsche’s lat­est de­sign scheme.”

Con­struc­tion of a flag­ship deal­er­ship re­quired metic­u­lous de­tail aimed at con­sis­tency of the Ger­man com­pany’s self-pro­fessed cor­po­rate im­age. Spec­i­fi­ca­tions de­tailed down to the tile, paint and the Alu­cobond alu­minum ex­te­rior pan­els.

The fa­cil­ity will in­clude two sto­ries of show­rooms, a Porsche sim­u­la­tor, a cloth­ing and ac­ces­sory bou­tique and a cus­tomer wait­ing room with glass win­dows over­look­ing an air-con­di­tioned, 26-station ser­vice shop that more re­sem­bles a hos­pi­tal than a garage. Blue hopes to build a stand-alone car wash on site, too.

“It’s just an­other great sign of re­ally pos­i­tive eco­nomic de­vel­op­ment in the area,” said Greg Simp­son, pres­i­dent of the North Hous­ton District, who put the deal­er­ship sec­ond in terms of scope only to Ama­zon’s new North Hous­ton ful­fill­ment cen­ter among re­cent busi­ness projects in his district.

Blue said he aims to con­tinue buy­ing deal­er­ships around Hous­ton and the nation and will re­main“dis­ci­plined and fo­cused on stay­ing in the lux­ury seg­ment .”

Michael Starghill Jr. pho­tos

Todd Blue shows a Porsche 918 Spy­der and a Porsche 1600. He cred­its Hous­ton for his suc­cess: “There’s some­thing in the wa­ter that is cel­e­bra­tory of the en­tre­pre­neur and of busi­ness peo­ple that take a risk. Other cities are not like that.”

Michael Starghill Jr. pho­tos

The new Porsche North Hous­ton will in­clude two sto­ries of show­rooms and an air-con­di­tioned, 26-station ser­vice shop that more re­sem­bles a hos­pi­tal than a garage.

Porsche “has found the per­fect equi­lib­rium be­tween sup­ply and de­mand. Porsche al­ways builds one less car than there is de­mand,” Todd Blue says.

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