A Santa Monica company that operates an online car-buying site has reached profitability nearly five years after it first started its engines – and after surviving the collapse of Detroit.

Privately held Zag.com Inc. has reached profitability on the strength of consistent sales growth this year, according to founder and Chief Executive Scott Painter.

Customers bought 68,294 cars through the Zag.com site as of early September, up more than threefold from the 21,322 sales between January and September 2008.

Last month, when customers rushed to take advantage of the Cash for Clunkers program, 8,000 cars were sold through Zag, up from about 2,400 sold in August 2008.

But even in July, when customers didn’t have access to the big federal rebate checks, Zag reported 25 percent month-over-month sales growth and a 77 percent increase compared with July 2008.

Zag allows customers to research and comparison shop for vehicles, and then buy them through a participating dealer at a discounted fixed price. The dealers in the network, which numbers about 2,200, don’t pay Zag for leads, as is typical on other car shopping sites. Instead, Zag gets a fee of $300 to $400 for every new and used car sold.

“I’m excited to finally see Zag reach profitability at a time when that seems like the last word you’d hear in the auto industry,” said Painter, 40, who declined to release a specific earnings figure. “During a downturn, it’s helpful to have a product that helps save people money, but in order to be successful you have to have operating discipline.”

Zag’s site is not open to the general public. Instead, customers must be members of affinity groups such as the American Automobile Association or those run through financial companies, including American Express and Capital One.

Among the institutions that have an agreement with the site is USAA Federal Saving Bank, a San Antonio-based institution serving more than 6 million military personnel, military retirees and their families.

“Our focus is on providing USAA members with a hassle-free car-buying experience that saves them money, and Zag helps us do that,” said Tim Booker, USAA’s vice president of consumer lending, in a statement. “Our members have already saved over $85 million off of the manufacturer’s suggested retail price.”

Painter, who has founded 28 companies, said his next goals for Zag include growing the number of participating affinity groups and expanding options on the Web site, such as allowing customers to buy car accessories or even get financing.

Constructing Terminal

Santa Fe Springs construction company Griffith/Dutra Joint Venture has won a $48 million contract from the Port of Los Angeles for the controversial expansion of the China Shipping terminal.

Griffith/Dutra will construct wharfing, provide additional berth space and pave backland at the terminal. Port officials said the construction spending will create the equivalent of 537 direct and 357 indirect full-time jobs within the five-county region.

China Shipping Group, based in Shanghai, has signed a 40-year lease with the port through 2045. The Chinese government-owned shipping line has attracted lawsuits from environmentalists and local homeowners over the past few years.

Most recently, the city of Riverside in February filed a lawsuit against the L.A. port claiming that an environmental impact report on the project failed to study the effects of additional cargo train traffic in Riverside.

The expansion approved by the port in December would double the shipper’s terminal size to 142 acres by 2030 with the ability to process up to 75 percent more cargo.

Railing for Ideas

The Port of Long Beach is mulling a proposal that would promote the use of rail to ferry cargo around the port.

The project, called the On-Dock Rail Support Facility, would involve redeveloping and expanding a 179-acre rail yard in the port’s northern section. The facility would stretch from Ocean Boulevard where containers are received to the Alameda Corridor where they head out by rail to destinations nationwide.

Currently, the existing rail yard is not able to handle larger trains, and its design does not allow the smooth flow of trains, port officials said.

The port recently released a notice of preparation, the first step in the environmental review process. But it has not disclosed a price tag or time line for completion.

The port will hold a public hearing on the project 6 p.m. Wednesday at facility headquarters, 925 Harbor Plaza.

News & Notes

Valley Power Products Inc., a City of Industry engine retailer and maintenance service provider, has opened a new location in Long Beach. … Michael Feldman has been hired as deputy executive director of facilities management by Los Angeles World Airports. He started his career at LAWA in 1981 as an assistant city planner but most recently was deputy managing director of aviation facilities and environmental programs at Seattle-Tacoma International Airport.

Staff reporter Francisco Vara-Orta can be reached at [email protected] or (323) 549-5225, ext. 241.