LEWISTON, Maine —VIP Discount Auto Center, the family-owned automotive aftermarket specialist chain based in Lewiston, has broadened its business base by expanding its wholesale activities and entering the commercial tire arena.
The company, which operates most of its 49 retail stores in Maine and New Hampshire, also is turning its expansion sights to Massachusetts, where it has only one store so far, and Vermont, where it has none, CEO Thomas O. Auger said.
As for the commercial expansion, VIP saw an opportunity to expand its business by servicing farm vehicles and logging trucks used in the northern part of Maine, Mr. Auger said.
"It was a good move for us. We picked up a bit more volume," he said. The business, for now, is limited to commercial accounts in Aroostook County, Maine, but the commercial activity generated about 5 percent of the company's total sales last year, or nearly $4 million in new sales.
Nonetheless, Mr. Auger said he doesn't foresee increasing that end of the business for the next year or two, because it is a limited market.
VIP also boosted its wholesale revenues from 3 percent of 1998 sales to 10 percent in 1999 by supplying tires to car dealerships, Mr. Auger said.
However, supplying to Ford dealerships has proved costly of late due to the Firestone tire recall. Mr. Auger said his suppliers want him to supply replacement tires to Ford dealerships, but the transportation costs and drain on his inventory result in very low profit margins per tire, he said.
During the past year, the company opened four stores in New Hampshire, each with five or six service bays, while also closing one of its original stores in Maine, primarily because it lacked service bays. Automotive service represents 25 percent of the VIP's retail business.
Mr. Auger said VIP is planning four store openings in the coming year, most likely in Massachusetts—or Vermont. The company has saturated Maine and New Hampshire, Mr. Auger said, where it has 31 and 15 stores, respectively.
VIP's sales last year climbed 16 percent to $73.3 million, and it projects a further increase to $81.5 million in revenues this year.