Fixed Ops Journal - October 2021 - F20

FIXED OPS JOURNAL
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foj@autonews.com
ith the COVID-19 pandemic
steamrolling toward the twoyear
mark, demand for used
vehicles remains strong as
dealers grapple with parts shortages and newcar
inventories ranging from slim to none.
In this supercharged market - and faced
with competition from digital portals such as
CarG urus and Carvana - dealerships know
reconditioning is crucial, both for quick sales
and customer satisfaction and retention.
Most dealerships are able to recondition vehicles
in four to fi ve days, while some of the quicker
stores can turn around a car in three days or
less . Experts say this requires teamwork between
the fi xed ops department, which favors
lucrative customer-pay work, and used-vehicle
managers who are anxious to get inventory
readied and on the lot as soon as possible.
How much a dealership spends reconditioning
a vehicle depends on its age and
whether the car will require cosmetic detailing
or major repairs. It costs a dealership
about $42 a day to keep a vehicle until it is
ready for resale. So the quicker a vehicle is reconditioned,
the higher the profi ts.
Record setting
Longo Toyota, of El Monte, Calif., east of Los
Angeles, was on track to move 500 pre-owned
vehicles in September. Th at would break its
all-time monthly record of 463 .
Paul LeBlanc, Longo service director, says
the dealership's recon operations have reJEFF
YIP
Ruben Perez of Jeff Haas Mazda checks for
leaks, damage and tire and brake wear while
reconditioning a vehicle .
mained pretty much the same - averaging
about 350 recons a month despite the surge in
pre-owned sales.
" I wish there were more pre-owned cars, "
the 18-year Longo veteran says.
About 40 employees are involved in reconditioning
at Longo, LeBlanc says. A core group
of eight technicians handle recon and safety.
Other team members are assigned to bodywork,
cosmetic repairs, paintless dent removal,
detailing and wheel repair.
Longo Toyota relies on software it develTeamwork
can speed reconditioning as used-vehicle demand remains strong
JEFF YIP
oped in-house to track the status of vehicles
being reconditioned.
Double time
When it comes to reconditioning, it's all
hands on deck at Jeff Haas Mazda in Houston,
one of the largest Mazda dealers in North
America.
It boasts a modern 32-bay, climate-controlled
shop. Techs are turned loose
as needed and have been completing about
125 recons per month, double the typical
number. Th e recon process usually takes about
four days per vehicle, but Service Director
Keith Cline says he likes to push for 48 hours.
To be sure each pre-owned vehicle is in meticulous
condition when sold, the dealership
will farm out certain work - such as repairs
that require proprietary software or tools or
need hard-to-get parts. " European cars can be
a challenge, " says Todd Crabtree, Jeff Haas general
manager. " We had a Jaguar over a month
because we were waiting for an [ electronic
control module]. Th ey don't have the parts. "
Silver linings
Fernando Somoza, president and managing
partner of Central Houston Nissan, notes that
while tight supplies of new vehicles means
some customers wind up paying top dollar,
those who won't pay or can't aff ord premium
prices just keep driving their existing vehicles.
" Our parts business is way up, " he says.
" People are holding on to their cars longer
and fi xing them. "
If there's a bright side to the shortage of new
product, it is that pre-delivery inspections are
Manheim centers boost dealer recon capacity
F
or a franchised dealership considering
outsourcing some or all of its reconditioning
work, Manheim is one
option for this vital service. Th e auction
giant says it has refurbished more than a
half-million vehicles for retail since 2015,
whether those cars, SUVs or pickups were sold
on traditional car lots or online.
With today's " huge appetite for used vehicles, "
Manheim is committed to help dealers
" stock the shelves, " Patrick Brennan, Manheim's
senior vice president of marketplace,
told Fixed Ops Journal. From 2020 to 2021,
PAGE 20 OCTOBER 2021
Manheim saw a 60 percent jump in its retail
reconditioning business.
Th e Atlanta-based company began ramping
up its recon operations before the COVID-19
pandemic, opening a San Francisco-area facility
in 2018 and bringing an Orlando center
online the following year. With more than 50
retail reconditioning centers, 70-plus wholesale
facilities and 900 certifi ed technicians,
Manheim says its recon operations can boost
dealers' effi ciency, capacity and profi ts.
Th e turnaround for recons at Manheim is
one to 25 days, but most recons take nine days
or less . Charges vary widely based on factors
such as the original condition of the vehicle
and the dealers' goals or instructions.
A $30 million software upgrade last year
streamlined the company's reconditioning
operations and boosted technician productivity,
said Paul Halsch, Manheim's vice president
of reconditioning. Th e company also is
planning for the future to ensure techs can repair
electric vehicles, advanced driver-assistance
systems and other emerging technologies
and mobility solutions.
- Jeff Yip
Fixed Ops Journal - October 2021

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