Vehicles

How To Make Exotic Vehicles Move Your Numbers

Posted on November 23, 2015 by

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Abraham Mulugeta recently bought this new Mercedes-Benz Maybach S600 for his five-star clients. The Maybach interior has fully adjustable power rear seats with built-in massage, calf rests, and motorized footrests that extend from the back of the front seats. Amenities include a sunroof, LED mood lighting, temperature controlled cup holders, and two articulated tables stowed in the rear center console.
Abraham Mulugeta recently bought this new Mercedes-Benz Maybach S600 for his five-star clients. The Maybach interior has fully adjustable power rear seats with built-in massage, calf rests, and motorized footrests that extend from the back of the front seats. Amenities include a sunroof, LED mood lighting, temperature controlled cup holders, and two articulated tables stowed in the rear center console.
Rolls-Royces and Bentleys command a universal appeal, with each sedan customized for top-shelf luxury and quality experience. But at starting prices of $250,000, the premium sedans can pressure the profits of limousine services.

Although such sedans are rare in the limousine industry, a segment of operators use these high-profile vehicles to capitalize on their attention-grabbing brand names. They keep these shining beacons in their fleets year-round and profit from consistent runs.

“It’s very simple; it’s an expensive investment,” says Alex Darbahani, owner of KLS Transportation in Los Angeles, which stocks two Rolls Royces, a 2014 Ghost and a 2013 Phantom. Darbahani markets the cars through hotel connections, foreign and domestic clients, weddings, and special events such as on-screen movie work. He says the expensive vehicles take a lot of planning to work out financially.

New Ghosts and Phantoms start at about $320,000 and $480,000, respectively. Vehicle down payments and finance costs are compounded by expensive maintenance overheads. Operators must have enough capital and a clear game plan for how they will market the vehicle.

“You can make money in exotic vehicles but you have to have good credit and good money, and you have to have a business plan,” Darbahani says. “Scratches on the bumper and fixing flat tires can run up repair costs. But if you have the money to keep it during the low season, you will get a return on your investment. The market is huge.”

Alex Darbahani, CEO of KLS Transportation in Los Angeles, with his 2013 Phantom. Darbahani services many Hollywood celebrities and books the vehicle extensively during awards season. He also rents it out for film and on-camera production work, advising other operators to opt for extra insurance on such gigs to protect against camera scratches or other possible damage to the vehicle from lighting equipment.
Alex Darbahani, CEO of KLS Transportation in Los Angeles, with his 2013 Phantom. Darbahani services many Hollywood celebrities and books the vehicle extensively during awards season. He also rents it out for film and on-camera production work, advising other operators to opt for extra insurance on such gigs to protect against camera scratches or other possible damage to the vehicle from lighting equipment.
Only Game In Town
Having an exotic vehicle in the fleet gives operators something unique to offer and separates them from competitors. The move into exotic vehicles should come after you build a foundation of industry-standard-priced chauffeur services in more accessible vehicles, says Ryan Williams of Five-West Chauffeurs in Chicago, who runs a fleet of 13 vehicles, most being Rolls Royces, Bentleys, and Mercedes-Benz.

“You have to establish the clientele and the rapport. If the market for a high-end, $500 an-hour vehicle is there, you go there slowly. You don’t start with one MKT and then go buy a Bentley. You have to establish the relationships first.”

Williams connects with promoters, concierge departments, wedding planners, entertainment figures, and pharmaceutical industry reps to promote his Bentley and Rolls Royces. He saw demand growing for exotic vehicles when he started as a chauffeur.

“During the midst of my corporate airport runs I noticed this market of entertainers, CFOs, and CEOs, who did not want to ride in a Town Car or SUV, and would pay serious money to have something special,” he says.

Operators he had worked with helped spread the word around town about his high-end sedans, which gradually grew his business, he says.

Getting The Word Out
Darbahani reports that his connections to hotels and parking the vehicles out front garnered him foreign clients who pay top-dollar for the vehicles and chauffeurs — no matter the place. “I’ve had clients who wanted these cars for $2,500 a day flat rate, but in San Diego and Santa Barbara for four days [miles away from Los Angeles]. I put the car on a tow truck and the chauffeur in a hotel,” and made a sizeable profit despite the costs, he says.

Williams says demand for these sedans comes in seasonal waves, but can be profitable. “Here’s the kicker: These vehicles are very seasonal and very specialty, but they do pay for themselves because they come with a premium price. They can work for two months and bring in yearly six-figure revenues.”

As the economy improves, Darbahani and Williams have boosted marketing. Darbahani created a Rolls Royce SEO keyword campaign for KLS Transportation and Williams has a Five-West Instagram page showing slick photos of the shiny fleet vehicles throughout Chicago. Both report more leads and growth.

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