Fixed Ops Journal - August 2017 - 33

FIXED OPS JOURNAL

REVENUE
continued from Page 32

increase from 2015.
Howard Hakes, the group's president, requires his service managers
to conduct careful reviews of missed service appointments and sales to
try to bring customers back. The group also aims to give customers
good reasons to spend more time at its dealerships.
Its Toyota dealership in Puente Hills, Calif., includes a Subway sandwich
shop and a movie theater that attracts 60 or more patrons some weekends.
"On Saturday, getting people to leave is a problem," Hakes says.
Online sales account for a growing share of Hitchock's parts business. Through its own websites and on an eBay site, the group offers a
large selection of Toyota Racing Development parts that appeal to
sport enthusiasts, he says.
Wholesale parts account for about 20 percent of the Hitchcock dealerships' overall parts sales volume. Hakes says he aims to turn his parts
inventory every month and to get discounts by ordering fast-moving
parts in bulk.
"Inventory control is huge," Hakes says. "In parts and service, you
have to be numbers-driven."

Accessories, amenities
Vehicle customization and accessories sales helped Galpin Motors
Inc. in Southern California average $16.6 million in parts and service
sales at its seven dealerships last year.
Galpin Auto Sports, which tricks out cars for these dealerships, adds as
much as $500,000 a month to the company's revenue, says Beau Boeckmann, president of Galpin Auto Sports and vice president of Galpin Motors. Galpin operates a huge parts warehouse and a thriving wholesale
business, with 20 trucks delivering parts throughout its market.
Another major dealership group in Southern California, Fletcher
Jones Automotive Group of Newport Beach, averaged $15.96 million in
parts and service revenue in 2016 at its 17 dealerships.
Garth Blumenthal, general manager of Fletcher Jones Motorcars in
Newport Beach, the group's flagship Mercedes-Benz dealership, cites
the group's Preferred Owner Program as a key to service customer loyalty and retention.
Anyone who buys a vehicle from Fletcher Jones is enrolled in the program. Service benefits include free loaner vehicles, airport shuttles at
its Newport Beach and Ontario, Calif., Mercedes-Benz stores and free
car washes Monday through Saturday.
Such amenities have enabled Fletcher Jones to build relationships
over generations with families of customers, Blumenthal adds. "If they
need their car serviced, they think of us," he says.
Don Tipton, an automotive retail consultant in Jacksonville, Fla., counsels dealerships that seek to boost their parts and service revenue to perform a daily review of repair orders to look for missed opportunities.
That process can acquaint a dealership with the mix of service work it
is attracting and the extent to which customers are declining repair recommendations, says Tipton, president of DTC Retail Consulting Inc.
"Just looking at numbers without analysis is dangerous," he adds.
As vehicle sales plateau, service departments will need to do even
more to keep customers in order to maintain dealership revenues, says
Steven Szakaly, NADA's chief economist.
"Part of the strength of the diversity of the dealer retail body is they
can have different approaches to how they run their service area,"
Szakaly says. "One-size-fits-all does not work." 

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AUGUST 2017

PAGE 33

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Table of Contents for the Digital Edition of Fixed Ops Journal - August 2017