Family-Run Car Business Expands Piece by Piece

128

Louis and Geraldine Morosan have long operated auto body and truck customization shops. But lately they’ve created an additional identity – manufacturer.

The shift from repair to fabrication was born of necessity, and while the Morosans said their nascent manufacturing business accounts for just 6 percent of their revenue, it is an area they see growing rapidly.

The husband-and-wife team opened L&G Enterprises, a collision repair and custom paint shop in San Dimas, 30 years ago. They added a business, Custom Truck Shop, which sells custom accessories and does installations, in 2001.

While the collision side of the business slowed during the recession as people put off spending money on repairs, the Morosans found that demand for customization remained strong. At first they fabricated parts individually on a made-to-order basis, but as demand grew, they created duplicates to build inventory.

“We’ve gone towards the manufacturing and customization side,” said Theresa Contreras, the Morosans’ daughter and a co-owner in the businesses. “People have money to spend on customizing their vehicle and we are noticing that it’s still a pretty large market out there.”

She said that they had been thinking for years about shifting their business more to manufacturing custom parts, but they waited until the economic recovery to test it.

They began in a market that was both deep and specialized: making bumpers and sidebars for the Ford F-150 Raptor pickup truck.

The F series is the best-selling automotive line in history, having sold more than 34 million units since 1948. The F series has already sold nearly 500,000 units this year, including more than 71,000 in August, a 22 percent increase from the same month last year, according to Ford Motor Co.

The Morosans are sill working on a small scale. Annual sales of custom parts generate about $100,000, about 6 percent of overall revenue. That’s not even a blip in the $31.3 billion spent in the United States on auto customization in 2012, according to the Specialty Equipment Market Association in Diamond Bar.

But the way they have begun manufacturing has changed significantly. In the past, each part was not only made to order, each one was an original fabrication. Now, the process in which they design, and make prototypes and their own jigs has been standardized, allowing them to repeat the process.

“It takes about half the time when you are making multiple of something as opposed to making one part,” said Contreras.

That standardization, which boosted the speed and consistency of the process, helped lift their profit margin as well. Now, in addition to the retail location, they have an active online presence that has helped market parts all over the United States as well as to Canada and Dubai.

Modest roots

The Morosans, who are in their late 50s, co-founded L&G Enterprises in 1982 as a collision repair and custom paint shop. Theresa and her sister, Sara Morosan, joined their parents in running the store about 15 years ago, with Theresa focusing on design and marketing and Sara on operations.

The two stores, L&G and Custom Truck Shop, employ nine workers, two in manufacturing, and have annual sales of between $1.5 million and $2 million.

Peter MacGillivray, vice president of events and communications at the Specialty Equipment Market Association, said he has seen collision repair businesses get more involved in the specialty equipment market, which focuses on products and technologies that enhance the style and performance of vehicles.

“We’ve seen a steady growth in this category, doing what we call crossover sales,” he said. “They are in one specific category and now they are crossing over into others.”

Part of the reason, he said, was that the culture of personalization has increasingly extended to the car industry over the last decade. More and more customers, especially young people, have embraced the notion of personalizing their cars. At the same time, repair and replacement businesses are trying to expand.

But still he finds what L&G has been doing unique.

“They are breaking the mold that they define their business on,” he said. “It’s cool to see that they have spotted an opportunity and changed their business to leverage that opportunity.”