What does a car club do when the pandemic wreaks havoc on their activity calendar? They turn to video of course like so many other organizations. On Tuesday 3/23 the ///M Chapter of the CCA held a video conversation with influencer Eric Keller, founder of Enthusiast Auto Group (EAG) in Cincinnati, Ohio.
No one used the actual term influencer, that’s a phrase from my career in communications. But that’s definitely what Keller is. Some might even say a market maker. Most people into older BMWs know of EAG. They have built a position at the very top of the M car market – the most pristine, the best serviced and the highest priced models available anywhere in the country. Eric does a good job promoting these models on a very active YouTube channel.
You can feel Eric’s passion come through strongly on the videos. He said they’ve been in business for 21 years and have sold over 10,000 cars. Every EAG customer I’ve spoken to speaks highly of their experience. EAG is a quintessential example of taking your passion and building a successful business from it. You have to respect what he and his brother Evan have built.
Other examples of this in the enthusiast car market include Randy Nonnenberg at Bring a Trailer, Doug DeMuro at Cars and Bids and Ryan Schultz of E39Source. Those that find ways to live their passions remind me of Thoreau’s maxim “our truest life is when we are in dreams awake.”
Due to EAG’s position at the very premium end of the market it sometimes takes flak for driving M car prices beyond what anyone with a mortgage can afford. I don’t know if that criticism is fair. EAG is a business and of course you’re going to charge the highest price the market will bear. There are also fewer and fewer pristine M car examples out there every year, and there will always be a 1 percent audience that will pay top dollar for the very best.
In theory the rising market for M cars benefits every owner. That’s why I think how people feel about EAG is similar to how many feel about the real estate market. Many decry the escalating entry fee for buying a home, until they jump in. Then the increasing value of the property works to their advantage.
Interestingly EAG was introduced as a “BMW preservation” company by the moderator, not a used car dealer or service provider. Most of the conversation was straightforward conversation about the various generations of M3 cars. The examples of M cars in the EAG garage as Eric walked around describing them were incredible.
One I own – Evan’s E46 M3 ZCP
Here’s a link to the recording. The video is glitchy in spots, possibly due to ///M Chapter using Sharepoint. Some time stamps to help those who can’t spend the full 48 minutes:
- 6:00 – discussion of E30 M3
- 15:30 – E36 M3
- 20:45 – E46 M3
- 28:40 – general purchasing advice
- 37:45 – an incredible new M2 CS
- 44:15 – E31 850CSi
Having known of EAG for years though I found some of what Eric shared about the business even more interesting. He said that the rejuvenation (servicing a car back to good as new) business was a bigger piece than M car sales. He said there is a months long backlog for scheduling, and the average rejuve costs around $20,000. It wasn’t clear whether he was talking about the rejuves they do to prepare a car for sale – which are internal equivalency dollars – or the actual average rejuve cost charged to service customers. That’s a big difference.
Here’s a theory from a long time M owner and market watcher. I think EAG could be making a strategic pivot towards the service business. Some factors that might encourage this:
- Growth of auction sites like BaT and C&B give M owners a retail sales option, rather than sell wholesale to EAG. This could be making it harder to source pristine M cars.
- How much continued market growth can there be of buyers willing to pay $100,000+ for a 20 year old BMW, even in the modern winner-take-all US of A?
- Much better profit margins – dealers make far more money on service than on selling cars.
You heard it here first. Let me know if you agree or disagree, or if you’ve an EAG story to share. If you’re interested in a new hobby an older M car could fit the bill nicely. No one will ever build cars like these again – high powered, naturally aspirated, RWD, more mechanical than software in function. And maintained well they will probably go up in value.