Victory Automotive Machine thrives by diversifying and tapping into muscle-car market
San Jose, Calif.-Like many automotive repair businesses, the genesis of Victory Automotive Machine took place in a high school classroom and shortly thereafter in a residential garage, Victory Owner Victor "Vic" Anderson said.
By working on his friends' vehicles at home and taking tech classes in high school, Anderson said he was able to build a decent clientele by the time he was 17 years old.
After receiving substantial exposure to the automotive industry through a work experience program at Los Gatos High School, Anderson said he began wrenching on cars at home while working at a gas station and later as a delivery driver at a parts store.
"Within six months at the parts store, I was a counter guy," Anderson, 50, said. "And by the time I was 20 years old, I was managing the place. I would sell parts from nine to five and then work on motors in my garage, sometimes until two in the morning. When I was 28, I bought my own parts store with a small machine shop in the back. Pretty soon, I had two parts stores and a larger machine shop, and that's how I got started."
More than two decades later, he said Victory is still going strong, surviving by adapting to a new business model that includes complete custom engine builds, installation, and every type of mechanical repair.
Victory also has a full-service paint and body shop that specializes in classic automotive restoration, Anderson said.
"We try to handle all of our customers' automotive needs," he said. "We will work with anybody, including walk-in customers, new-car dealerships, neighborhood repair shops, and weekend mechanics that require machining. We've succeeded by doing it all, and it's worked well for us."
Currently, restoring muscle cars makes up half of the revenue that comes through the door at Victory, while rebuilding engines for dealerships and retail walk-in repair work accounts for about a quarter each, Anderson said.
In 2001, he said he began to see that engine machining and rebuilding was going to be a diminishing part of his business.
"It's more cost-effective nowadays to replace the newer engines, which has caused this business to decline" he said. "When I started my machine shop, I had 60 competitors, and now I have roughly 12. The labor costs for pulling the cylinder heads off a motor are just too high, and it's relatively inexpensive to just swap them out. I tell people it's like a DVD player -- if it breaks, you just replace it, you don't try and fix it."
Better-built engines that hold up under heavy use is another reason why the machine shop industry has weakened over the years, Anderson said.
"Poor design led to the older engines breaking down around 100,000 miles," he said. "With the newer motors, we're seeing many of them running well at 300,000 miles, and that's untouched. Fuel injection, overdrive transmissions, and tighter tolerances have all contributed to better, longer-lasting engines."
The types of work that Victory does have changed over the years, but the muscle-car restoration aspect of the business has stayed fairly steady, Anderson said.
"The niche we've never seen change is the muscle-car work," he said. "We work on vintage cars from the '50s through the '70s, including muscle cars and hot rods. We've learned that boys will always want their toys, and it's been a reliable source of revenue, regardless of where the economy is. These muscle-car enthusiasts will neglect their daily driver, but at the same time they always seem to have enough cash to put into their hot rods."
Today, Victory operates out of a 2,800-square-foot facility with three bays containing more than $500,000 in engine machining and automotive repair equipment, and employs two technicians, Anderson said.
Anderson cited superior customer service as one of the reasons he's still around. "We go the extra mile in everything we do. You can look at all the letters of recommendation on our walls to see what our customers think of us. You can't make everyone happy, but we try. I know that I've cost myself tens of thousands of dollars over the years to keep some people happy, but I believe it's the price of doing business."
Turning every job around quickly is one of the hallmarks of customer service at Victory, Anderson said.
"We offer a 10-day turnaround from start to finish when we rebuild these classic muscle-car engines, in most cases," he said. "And the dealerships we work for need their cylinder head work yesterday. There are demands on their time--they have deadlines, too--and we're well aware of it."
Restoration customers can be particularly finicky, Anderson said. "It's a tough process, because these people expect perfection, yet they don't have any idea what it costs or how much work goes into completely restoring these classic vehicles. They just don't have a clue about what's involved, and one of the hardest parts of the job is educating them."
Unfortunately, Anderson said he doesn't see a bright future in either the machine shop or classic-vehicle-restoration markets.
"I'm very concerned because the kids today aren't as into these old cars as we used to be," he said. "They don't have the passion that we did; it's a different era with different vehicles. Heck, the new GTO looks like a Saturn to me."