KELLOGGThe biggest auto dealership in the Inland Northwest is getting bigger.


Dave Smith Motors, both marveled at by admirers and despised by rivals for the high volume of sales it conducts from this old mining town, says it soon will begin selling the Jeep line in addition to the nine other vehicle nameplates it already carries. In addition, it will start work in several months on a new showroom and an expansion of its service department.


Company President Ken Smith says that as part of the expansion, Dave Smith Motors plans to hire 30 to 40 additional employees in the next year, which would bring its workforce to nearly 300. The company already is the largest retail employer in Shoshone County, the Idaho Department of Labor says.


And those arent all the changes afoot at Dave Smith Motors.


Smith, the son of company founder Dave Smith, says the company will build its own body shop within the next six to 12 months; launch several new web sites next January; begin marketing nationwide a proprietary spray-on truck-bed liner; and open an apparel shop.


Its all part of the promise Smith made to the companys employees when he took over the reins of Dave Smith Motors in 1994, after his father died in a snorkeling accident in Belize.


I told them Id continue on with dads philosophy and grow this company, Smith says. He has: The company had 240 employees at the end of 1999 and gross sales of $210 million last year, compared with 45 employees and sales of $45 million in 1994.


Adds Smith, I think we have a lot more growth to do.


Renovating old school


One of the most visible signs of that growth will be the companys new showroom.


Smith says its always been a problem that people cant see Dave Smith Motors well from Interstate 90; in addition, the companys operations are squeezed in its current facility.


To solve both of those problems, Dave Smith Motors recently bought the former Sunnyside Elementary School building a few blocks from its current campus at 210 N. Division. The company plans to renovate the 30,000-square-foot school building to house its Chrysler, Dodge, and Jeep vehicle lines, freeing up room at its current facility for the General Motors products the company sells, including Buick, Cadillac, Chevrolet, GMC, Oldsmobile, and Pontiac. Architects West PA, of Coeur dAlene, is designing the renovation, and construction is expected to begin within the next three or four months.


As it is, a customer who didnt know that Dave Smith Motors sold autos might think theyd stumbled into a stock brokeragealbeit a Bavarian-themed onewhen they entered the companys main showroom.


There is only one car in the showroom, and its flanked by rows of desks, behind which sit many of Dave Smith Motors 48 salespeople.


The salespeople are responding to Internet inquiries and fielding telephone calls, which is how a good deal of Dave Smiths high-volume, no-haggle business is done. Together, the sales force sold slightly more than 6,500 new cars, trucks, vans, and SUVs last year, and Smith says the goal is to sell 7,500 new vehicles this year.


By no-haggle, that means Dave Smith sells new vehicles at or near invoice price.


In addition, the company sold about 2,400 used cars last year from its Kellogg headquarters and its only satellite office, Dave Smiths Frontier Leasing & Sales, in Coeur dAlene. Those overall numbers put Dave Smith Motors among the top dealerships in the U.S., Smith asserts.


Were ranked No. 11 out of 26,000 dealers in the U.S., he says. The company claims to be the worlds largest Dodge truck dealer, and Smith says General Motors informed him that the Dave Smith was the top GM dealer in the five-state Northwest region in March.


Dave Smith is much, much bigger than a typical auto dealership, confirms David Duryee, a principal in the Seattle headquarters of the accounting firm Moss Adams LLP who specializes in serving auto dealerships. Duryee says the average dealership has total sales of about $20 million to $25 million a year, and sells about 1,000 to 1,200 vehicles.


His particular situation, as far as I can determine in my practice, really is unique, Duryee says of Dave Smith Motors. There really is no one else out there doing what hes doing.


The companys business style, however, has angered other dealers, especially its Inland Northwest competitors.


Two years ago, a group of dealers from Eastern Washington, North Idaho, and Montana threatened to boycott Chrysler Corp. unless it agreed to cut back the number of vehicles allotted to Dave Smith Motors, newspapers reported at the time. The Federal Trade Commission intervened and prevented such an action.


Thats just the way the business works, Duryee says. Its what we call turn and earn. Turn the inventory and you earn more as far as allocations concerned, he says.


Still, most dealers resent Dave Smith Motors, Duryee says.


Theres no prohibition against selling outside a territory, he says, but theres some kind of feeling that hes got predatory marketing practices.


400 lbs. of hamburger


Some of the companys business activities seem far removed from the business of selling cars, but theyre integral to the way Dave Smith Motors operates.


After all, Smith says, Why would people want to come to Kellogg (to buy an auto)? We want to make it fun.


For example, the company barbecues 400 pounds of hamburger every Saturday for employees and customers, and people who are waiting for their cars to be serviced are provided with free passes to ski at Silver Mountain or to see first-run movies at a theater across the street. The company owns a 15-passenger shuttle van that will drop service customers off to golf, fly-fish, or take a gold-mine tour while they wait.


Dave Smith Motors also has obtained a franchise for E-bikes, an electric bicycle thats the brainchild of former auto executive Lee Iacocca, Smith says. The company envisions eventually installing, at its own cost, battery-charging stations along the planned Mullan-to-Plummer trail so customers can go biking while they wait, he says. The company also will sell the E-bikes, he says.


Customers come from all over the U.S. to buy at Dave Smith Motors.


We have them on a regular basis come from Alaska to California, with the majority of the companys customers coming from west of the Mississippi River, Smith says. However, We have diehard people who buy from us every year from as far away as Florida, he says.


Smith and the seven other members of his extended family who work at Dave Smith Motors want to help their hometown in other ways, too.


For example, Dave Smith Motors will open in the renovated schoolhouse an apparel and accessories shop, which will carry more than just auto-related merchandise, Smith says.


Itll carry Levis and a couple lines of tennis shoes, he says. Since the (Bunker Hill) mine closed down, theres no place to buy clothes in Kellogg.


There also will be a day-care facility in the building for the dealerships employees as well as for customers who want to leave their kids while they shop for autos, he says. Behind the school, the company will construct a park and name it in honor of Smiths late father.


Schueman, who owns the Super 8 Motel in Kellogg, says most business-people there appreciate Dave Smith Motors efforts to promote the Silver Valley.


I get some business off of them, and the other motels here do also, he says. Theyre a good business generator and a good neighbor in the (Silver) Valley.


Started with Chevy


Dave Smiths car business didnt start out as an auto colossus.


The elder Smith bought a Chevrolet dealership in Wallace in 1965, then moved it to Kellogg five years later. Business was good until the Bunker Hill mine shut down in the 1980s, plunging the Silver Valley into economic depression.


Dave Smith adopted his one-price, no-haggle pricing as a defensive strategy, Smith says. We decided we had to close the doors or figure out another way to do business, he says.


We saw a need for non-confrontational selling. It was my Dads philosophy that he didnt want any part of a deal that wasnt good for the customer and the dealer.


The economic hard times devastated the auto industry in the Silver Valley, but because of the changes hed made in his business, Dave Smith Motors was able to grow, Smith says.


We kept picking up (other brands) as dealers were going out of business, he says.


Today, the company is spread out over 14 acres across Kellogg. Besides the main showroom and lot, Dave Smith Motors acquired a seven-acre vehicle-holding lot three years agoa move necessitated, Smith says, because there had been six to eight semi-trucks a day unloading trucks and cars on the street outside the showroom, clogging traffic. The company operates a busy auto accessories sales and installation business nearby, owns smaller auto lots and storage facilities in several locations in town, and sells truck campers, a franchise the company bought last year.


This summer, Smith plans to raze two apartment buildings he owns adjacent to the dealerships showroom and sales lot and use that property to add eight to 10 auto service bays to the current 14 in the service department. He also is scouting sites for a new body shop, which he wants to build sometime within the next year.


Smith also plans to introduce a new spray-on truck-bed liner at upcoming auto-industry trade shows, and will market that product nationwide, he says.


Dave Smith Motors also will launch two or three new web sites next year, Smith says, one for dealers and two for consumers. He declines to provide more information about the sites, saying theyre still being developed.


Smith says he often takes calls from auto manufacturers who want to know if hell add their vehicles to his business.


Beyond adding the Jeep franchisehe says hell begin selling Jeeps within 30 days, before the new showroom is readyhe wont say.


Still, looking over at the former elementary school thats soon to become a part of the Dave Smith empire, Smith says, We have quite a few things that were going to announce. Were going to have some pretty big expansions here.