Pohlad auto group expanding past metro

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: October 15, 2012 - 9:28 PM

Twin Cities Automotive is breaking ground today on a new $2.8 million home for a dealership it bought in Chisago County.

The automotive division of the Pohlad Companies is on the move again, this time with a new dealership and a soon-to-be new showroom and service center in North Branch.

Twin Cities Automotive (TCA), the 4-year-old collection of car dealerships assembled by the family business whose holdings include the Minnesota Twins, will break ground Tuesday on a $2.8 million facility for North Branch Chevrolet in a high-traffic location just off Interstate 35 in the Chisago County city of 10,000.

North Branch Chevrolet, formerly known as Central Chevrolet, is TCA's second venture outside the Twin Cities and its second with a domestic manufacturer. It currently has a Hyundai dealership in St. Cloud and a Chrysler, Jeep, Dodge and Ram dealership in Coon Rapids.

TCA quietly bought the North Branch dealership over the summer as it also was expanding its presence in the luxury automotive market with the pending acquisitions of Carousel Audi and Porsche in Golden Valley and Audi, Mercedes-Benz and Porsche in Maplewood. When those deals close, which is expected by the end of the year, TCA will have 10 dealerships in Minnesota.

"We're trying to put together a balanced portfolio," said TCA President Jay Hulbert in an interview Monday. "We want a balance of luxury and mainstream, European and domestic, and metro and rural."

When the North Branch store opens next spring, it will be the newest location for a Chevrolet dealership that's been part of North Branch since 1931. TCA acquired the dealership when the previous owner decided to leave the market.

Minnesota's outstate markets provide good opportunities for sales and growth in the car and truck business, said Scott Lambert, executive vice president of the Minnesota Automobile Dealers Association.

"The outstate market is strong. The Minnesota economy is definitely bouncing back," Lambert said.

But there are other factors that make this a good time to be in a relationship with a domestic car manufacturer and to be locating dealerships beyond the metropolitan area.

"Franchises anywhere have become a pretty valuable commodity," Lambert said. "In 2009 and 2010 there was a pretty big contraction in the number of franchises and the remaining ones became more valuable."

Hulbert said U.S.-made vehicles sell well in outstate Minnesota.

"Broadly speaking, there are good growth opportunities and under-served communities out there," he said. "There's not the number or quality of dealerships available in those markets and people are forced to travel to the metropolitan area to find the vehicle they're looking for."

There is also the factor of land availability when it comes to locating a dealership. Land is cheaper outside the metropolitan area, and local governments are considered more flexible when it comes to land use issues, such as zoning variances and construction permits.

"Your costs are less. The hurdles they put in front of you are less and the local community values us being involved," Hulbert said.

The new dealership location for North Branch Chevrolet will mean more showroom space for vehicles, jobs for its current 38 employees, and maybe some new hiring and equipment for the service department.

"I'm just thrilled," service manager John Farrier said. "I guess I've seen my share of peaks and valleys in my 25 years in the business."

Farrier, a third-generation auto employee whose son now works for him, said the new location will make North Branch Chevrolet easier to see and easier to find as it sits sandwiched between competing Chevrolet dealerships in Cambridge and Forest Lake.

"We've been promised a new location three times, and this one is finally going though," Farrier said.

David Phelps • 612-673-7269

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