BEST PRACTICES
New England group marries online ordering with home deliveries
Berlin City Auto Group delivers a pickup to a rural customer. The dealership group has 80 drivers and 30 custom-wrapped chase cars, which bear the group’s one-word motto: “Easy.”
Gabe Nelson 
Automotive News
February 29, 2016 – 12:01 am ET
In the era of Amazon, customers are more comfortable than ever making big-ticket purchases online, as long as the experience is quick and easy and buyers are convinced the sellers won’t take advantage of them.
Berlin City Auto Group, a New England dealership group with eight stores across Maine, Vermont and New Hampshire, has used its mostly remote locations as an opportunity to deliver that experience.
Since its acquisition by a group of Colorado investors in 2007, Berlin City has built a formidable online-ordering business to complement a home-delivery service that began in the pre-e-commerce era. Of the 13,197 vehicles the dealership group sold in 2015, roughly 3,400 were delivered by the group’s 80 trained drivers and 30 custom-wrapped chase cars, which bear the group’s one-word motto: “Easy.”
“Our message is that whatever your perception of the car-buying experience, we can make it easier,” said Yegor Malinovskii, president of Berlin City, which charges $175 for door-to-door delivery service. “We can deliver a car in 24 hours, and we can offer you a lot of services at no charge or very fast.”
Malinovskii said rival stores have tried to imitate the delivery model, but haven’t made it a mainstay of their business.
“Anyone can do it for one or two deals a month,” he said. “That’s not a big deal.” But building a system that works with a 24-hour turnaround, a chase car and a driver “is hard to duplicate unless you’re fully committed,” he added. “Just like with anything, you need to put in the effort or it’s not going to stick.”
Malinovskii, 42, got into the business as a car salesman after migrating from Ukraine in 1993. After stints as sales manager and general manager at AutoNation stores in Colorado, he was promoted by the nation’s largest public dealership group to market president for Denver, overseeing 17 stores in the area.
In 2007, AutoNation veteran Bill Carmichael and entrepreneur George Gillett, a former owner of the Montreal Canadiens hockey team, put together a deal to acquire the family-owned Berlin City group and form Summit Automotive Partners. They offered Malinovskii a stake in the venture; he accepted and moved to Portland, Maine.
Summit, which also has stores in Colorado and Tennessee, ranked No. 41 on Automotive News‘ 2015 list of the largest U.S.-based dealership groups, with 19,430 vehicles sold new at retail and 40,500 sold overall.
Berlin City sells Kia, Fiat and Alfa Romeo vehicles in Williston, Vt., a suburb of Burlington. In rural Gorham, N.H., near the White Mountains, the group offers Honda, Kia, Nissan, Toyota, Chevrolet, GMC, Buick, Ford, Lincoln, Chrysler, Dodge, Jeep and Ram vehicles. In Portland and South Portland, Maine, it sells Honda, Nissan, Toyota, Scion and Lexus vehicles.
When Malinovskii arrived in Portland, Berlin City had a healthy business of reaching faraway customers through home delivery, fed largely by its long-standing practice of placing an advertising newsletter in local newspapers across New England every Thursday.
Berlin City’s Yegor Malinovskii: “For us, the future lies in mobile integration.”
The newsletter cost $2 million a year to distribute. Malinovskii’s team has since cut the newsletter spending in half, investing the savings into fresh websites and search engine marketing to draw faraway buyers. Within two years, Internet leads had surpassed phone leads; they now outnumber phone leads 3 to 1.
In Silicon Valley and across the United States, numerous startups — Drive Motors and Roadster for new cars, and Beepi, Carvana, Shift and Vroom for used cars — are racing to create a quick and seamless car-buying experience that includes home delivery. So is AutoNation, which announced in 2014 a $100 million-plus investment in its digital storefront.
Berlin City is trying to do the same on a smaller scale. With its delivery infrastructure built, the group plans to focus on the thorniest parts of the transaction: paperwork, trade-ins and financing.
“It’s super fast and convenient, but it’s not exactly Amazon,” Malinovskii said. “We still have a lot of snags in paperwork and the presentation of finance products. It can’t be done completely on your phone. But for us, the future lies in mobile integration. The complete process will be done on the phone.”
You can reach Gabe Nelson at gnelson@crain.com.
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