Request for assistance in managing multiple segments of used car inventory

by dpollak on 01/25/2010 · 8 comments

Last week I spent some time with a very smart woman named Betty Ballantyne, the Used Car Manager at Chris Irwin’s Ford and Toyota store in the Northeast.  Betty has quite a bit of frustration due to the fact that she’s trying to manage several different types of used cars from her single location. For example, she’s trying not to pass on easy selling “as-is” cars, trying to maintain a mainstream used car operation, as well as supporting a certain inventory of CPOs.  Throw on top of that a few sub-prime vehicle sales, and what you’ve got is pretty much of a management nightmare.  With each segment of vehicle sales there are differing strategies for reconditioning, pricing, advertising, warranties, etc.  Keeping the policies straight for each and a common understanding thereof among the sales staff is proving to be very difficult.  

I personally believe that a business should focus its operations on its core strengths, however today the used car business is so difficult, that it’s very hard to suggest that Betty just focus on one segment of the used car market.  I found myself with very few practical suggestions for Betty, but I promised to put this issue on the blog, and hopefully get some input and advice for Betty.  I would appreciate any constructive advice.

Thank you

  • http://stradaautostore.squarespace.com/ Strada

    Must be 2 stores with different mindsets, and then a few used car businesses (BHPH,as is, mainstream, CPO) sounds like a recipe for errors, misunderstanding, confusion.

    Ideally from the franchised locations it should be 1-mainstream 2-CPO from an alternate location it should be 1-BHPH 2-as is.

  • redmond

    I feel the same dilemena in deciding what to do at Santa Margarita Ford. I put together a 3 part plan this year – CPO, “as-is”, and commerical alternative vehicles to new. Because the building industry is so strapped and contractors trucks still break down, this is one area that I felt we could move the needle. Dale, that one segment hasn't worked out well for us over the last 13 months. So, my answer is continually monitor the situation and look for buys under the 10K range to move the vehicles fast

  • http://www.lotvantage.com/ Andrew Compton

    I try to avoid cliches, but it's “easier said than done”. The saying “our employees are our most important asset” is true for Betty. She might consider developing SME's {Subject Matter Experts} for each business segment. Then a process of delegate and automated that she can measure. I would not try to “reinvent the wheel” but remember, it if was “easy everyone would be do it”.

  • http://www.dalepollak.com Dale Pollak

    Redmond…I really respect the fact that you are trying different things, even if they don’t work out. I believe that the test of a true winner is the willingness to take risks and the ability and agility to adjust. Thanks for your short note, I think it’s very inspirational.
    Dale

  • http://www.dalepollak.com Dale Pollak

    Strada – I really agree, however, what do you do when you don’t have the luxury of alternate real estate locations? Do you focus on one particular segment or go broad? Thoughts?
    Dale

  • http://www.dalepollak.com Dale Pollak

    Andrew,

    Great points. Thank you.

    Dale

  • nathanlindstrom

    Dale,

    Thanks for all of your team's help implementing the new velocity philosophy at our stores.

    After the first month, we are proud to say that our stores have make some big strides with reducing our average aged inventory and we are starting to build momentum for what we expect to be another great month! Our Chevy store had it's best month in the history of our ownership and it was the first month on V-Auto!

    One of our main focuses for this month is going to be getting our vehicles online within 72 hours of ownership; however, we are finding this to be a very big challenge. Whether it is transportation delays, detail shop delays, or waiting for a transportation bid, we seem to keep falling short. Any best practices from anyone who is meeting this challenge would be appreciated.

    Thanks again Dale,

    Nate

  • http://www.dalepollak.com Dale Pollak

    Nate,

    Congratulations on your amazing progress and initial implementation of the Velocity strategy. Frankly I'm not surprised with guys like you, Ron and the Florida crew.

    I'm not sure if you know it or not, but your vAuto system has something called Life Cycle Management. This allows you to establish milestones and timelines for getting cars to both the virtual and physical front line. The system then measures and reports on your performance in each phase of the process. Remember that the first requirement of managing anything is the ability to measure it.

    Nate, I would encourage you to contact Andy Wright of Lehigh Honda in Pennsylvania. Andy's email address is andy@vinart.com. He is one of the best about getting cars through the process quickly. Two other masters that come to mind immediately are Bill Pearson of Finish Line Ford in Peoria, Illinois, and John Chalfant of Edmark Superstore in Boise, Idaho. As always, let me know how I can be of additional assistance. Congratulations and keep up the great performance.
    Dale

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