Winnipeg’s Birchwood Automotive Group has embarked on a massive, multi-million-dollar expansion, adding three new dealerships, renovating three others and adding a new brand to the fold.
Expected to open in the summer of 2020 is Birchwood Lexus, while not far behind will be Jaguar Land Rover Winnipeg and Birchwood Volkswagen, the company’s first VW franchise, on Regent Avenue. The Jaguar Land Rover and Lexus stores will be neighbours facing Kenaston Boulevard.
Kevin McNeill, vice-president of operations, said Jaguar Land Rover and Lexus will benefit from having their own, stand-alone dealerships. Lexus currently shares space with Birchwood Toyota while Jaguar Land Rover is paired with Volvo Winnipeg.
Both the Toyota and Volvo stores will remain in their current locations in the Pointe West Auto Park.
"Lexus separation was initiated by Birchwood, while Jaguar Land Rover separation from Volvo was manufacturer-initiated due to a different ownership structure," McNeill said. "This initiative will allow for growth of both franchises.
"Birchwood has been working very closely with JLR and Volvo on the timing of this transition and we are excited with expanding our operations to meet the growing consumer demands for all three brands."
As vehicle manufacturers, Jaguar, Land Rover and Volvo once had common ownership under Ford’s Premium Auto Group, but when that split up, Jaguar and Land Rover merged and became part of India’s Tata Group. Volvo was acquired by China’s Zhejiang Geely Holding Group, commonly known simply as Geely.
Leading the developments will be McNeill, longtime automotive executive Rene Nicholson and Scott Stephanson, vice-president of True North Real Estate Development. Nicholson is responsible for the Kenaston Boulevard projects while Stephanson is leading what the company is calling the Birchwood Regent Campus.
The news is sending ripples across a wide swath of the city's economy.
"Investments in facilities such as these sends a clear message regarding confidence in the Winnipeg market," said Geoff Sine, executive director of the Manitoba Motor Dealers Association.
The local building trades are also celebrating, not only for what it means for workers, but also the positive effect it will have on recruiting, training and graduating new workers into skilled trades, said Sudhir Sandhu, chief executive of Manitoba Building Trades.
"It’s always great to see smaller projects coming up," he said, adding it’s important for the long-term future of Manitoba’s skilled trades given the need to graduate new tradespeople into the workforce.
It’s a point echoed by Winnipeg Construction Association president Ron Hambley, who has been another key figure in efforts to grow the ranks of the province’s skilled trades.
With the expected and/or forthcoming completion of True North Square, the Keeyask generating station, Waverley underpass and southwest transit corridor, having projects to backfill the gap is critical, he said.
"When you have a larger project wrapping up, if there’s not something there to replace it, it does interrupt their education," he said. "You want to keep these people fully employed between school visits to help them get their journeyperson status as soon as possible."
Projects the size of typical automotive dealerships will employ about 200 tradespeople over the course of construction, from heavy equipment operators at the start through to construction trades to specialized contractors for electrical, plumbing and heating and ventilation, Sandhu said.
The Volkswagen store will be between 22,000 and 24,000 square feet, while the Lexus store will be approximately 37,500 square feet and Jaguar Land Rover will be 36,800 square feet, McNeill said.
The VW store is expected to add 40 jobs, said Birchwood president Steve Chipman, while McNeill estimated employment at the two luxury dealerships will be between 70 and 80 new positions.
'We have seen the luxury auto mall concept in other cities. The clustering of brands is a natural progression of that concept in south Winnipeg.' — Geoff Sine, Manitoba Motor Dealers Association executive director
Landing the luxury brands on the southern end of Kenaston Boulevard creates a luxury-vehicle corridor, bookended by Audi Winnipeg and, soon, Porsche Centre Winnipeg to the north and Mercedes-Benz Winnipeg to the south. The Porsche dealership is expected to move from its current location on Pembina Highway by the end of the year.
The logic of the move was not lost on Chipman, but he said creating such a corridor was simply coincidental.
"It was just where we had the land. We’re full at Pointe West and there’s nowhere left on Regent," he said.
Birchwood has eight acres on Lowson Crescent with frontage on Kenaston between Luxe BBQ and Fort Garry Brewing. Previous occupants were Big Steel Box and Forbes Brothers Construction.
Intentional or otherwise, creating a luxury corridor is a trend that’s showing up elsewhere in Canada, Sine said.
"We have seen the luxury auto mall concept in other cities. The clustering of brands is a natural progression of that concept in south Winnipeg," he said.
Lexus Canada said it is "thrilled" to soon have a stand-alone dealer in Winnipeg, adding its location makes it well-positioned to service luxury customers, according to Robert Tsang, director of Lexus Canada.
Birchwood's closest neighbour, however, wasn't so quick to contain his excitement. "Absolutely," said Brian Lowes, president of Mercedes-Benz Winnipeg. "It’s great exposure for the businesses, brands and industry in an exciting part of the city that is experiencing loads of positive growth."
Birchwood Volkswagen will replace the original Keystone Ford, which now houses a Birchwood Certified Pre-owned store. That building will be demolished.
Volkswagen Canada had completed an analysis of the Winnipeg market and identified an opening for a third franchise, which Chipman said such was equivalent to issuing a request for proposals, which Birchwood submitted and won.
Volkswagen Canada spokesman Thomas Tetzlaff would not elaborate on the "top secret" process, but did say the company was excited to be in east Winnipeg.
"The north-east quadrant of Winnipeg has been closely monitored in recent years, and already includes an extensive network of established dealerships," he said.
"This addition will significantly enhance the Volkswagen brand presence in Winnipeg and elevate customer access and convenience."
Birchwood is also investing in facelifts to reflect new design directives from their respective manufacturers for Birchwood Hyundai on McPhillips Street and Birchwood Kia and Birchwood Ford (formerly Keystone Ford) on Regent Avenue.
Chipman and McNeill would not reveal the total amount of investment in the six dealerships, but Chipman did say automotive dealership construction is now priced between $250 and $300 per square foot. Such costs would put the ballpark cost of the VW store at between $5.5 million and $6.5 million, with the Lexus and Jaguar Land Rover stores between $9 million and $11 million.
Copy Editor, Autos Reporter
Kelly Taylor is a Winnipeg Free Press copy editor and award-winning automotive journalist. He's been a member of the Automobile Journalists' Association of Canada since 2001.
Updated on Monday, May 20, 2019 at 4:09 PM CDT: fixes deck, typo in story
4:19 PM: fixes typo
May 21, 2019 at 10:19 AM: removes missing info about franchise fee