Automotive News - June 2, 2008 - (Page 40)

40 • JUNE 2, 2008 service & parts GM think tank works to boost service business Craig Trudell ctrudell@crain.com DETROIT — General Motors has gone underground in its effort to help its dealers attract and keep service business. From a nondescript but high-tech facility called Underground City at its headquarters in suburban Detroit, GM Service Operations shares with dealers its latest strategies for satisfying service customers. Last month, for example, the service division launched a program for communicating with dealers that relies on GM’s OnStar telematics system. OnStar notifies subscribers by e-mail when their vehicles are due for maintenance. Now GM conveys the same diagnostic information to the dealerships that sold those cars and trucks. The program will create 6.5 million service leads a year for GM dealerships, says Peter Lord, executive director of GM Service Operations. “Our dealers are beginning to connect the dots,” Lord told Automotive News. “The profit generator that parts and services are is more important to dealers as the vehicle market gets more competitive.” GM Service Operations also has launched a program aimed at resolving service problems within 24 hours. GM patterned the program, which is monitored from Underground City, on emergency response practices developed by the federal Centers for Disease Control. GM estimates that three in 10 buyers of its vehicles return to the dealership for maintenance or repair work. GM wants to boost that figure to four of every 10 customers in three to five years. If that happens, GM spokesman Tom Henderson says, a typical dealership’s overall profit could increase by 10 to 15 percent. Good service creates vital customer loyalty at a time of slumping new-vehicle sales, GM says. Henderson cites GM data that suggest a highly satis- JOE WILSSENS At its Underground City, left, General Motors shows dealers ways to satisfy service customers. Peter Lord, above, director of GM Service Operations, says dealers are starting to see the importance of service as a profit generator. fied service customer is as much as nine times more likely to buy another vehicle of the same make as a disgruntled customer is. And a dealership that boosts its parts and service revenue, Lord says, “can afford to do the really tight, marginal deal to sell a vehicle.” Tommy Brasher, a Chevrolet and Buick dealer in Weimar, Texas, says he expects the new OnStar notification program to create service opportunities at his dealership. Parts and service revenues cover about 65 percent of his dealership’s operating costs, Brasher says. “If you’re very good at selling cars, you have a lot of competition,” Brasher says. “If you’re very good at service, you have no competition.” c Toyota offers gas card as tire incentive Donna Harris dharris@crain.com Toyota Division is offering $50 gasoline cards to promote tire sales at its dealerships. But as fuel prices rise, some dealers suggest a more generous offer would attract greater business. Through June, owners of Toyota brand vehicles who spend at least $150 on four tires at a Toyota dealership get a form they can mail in to obtain the gasoline card, branded by American Express. The gasoline card is good only at filling stations that accept American Express credit cards. The promotion excludes Toyota Tire Centers in Alabama, Florida, Georgia, Hawaii, North Carolina and South Carolina. Toyota spokesman Bill Kwong says about 1,500 consumers have responded to the offer. Some Toyota dealers say they expect the offer to boost tire sales. “Everybody is gas-conscious right now,” says Chuck Snipe, parts manager of Ourisman Toyota in Chantilly, Va. Walker Toyota in Miamisburg, Ohio, ordinarily sells about 30 tires a month. The gasoline promotion has boosted the dealership’s tire sales by about 25 percent, says service manager Mike Jackson. Still, Jackson notes, a similar promotion a year ago was more successful. “The $50 card used to fill up a gas tank,” he says. “Now it doesn’t. It would take a $75 card to fill a tank.” A parts manager at another Midwest Toyota dealership predicts the promotion will have scant impact on tire sales. Toyota’s wholesale tire prices are not competitive, says the manager, who asked not to be identified because he fears retribution from the company. Gas for tires To qualify for the $50 gasoline card, Toyota customers must ■ Buy 4 tires at a Toyota dealership ■ Spend at least $150 ■ Mail in a rebate form with a copy of the sales invoice ■ Redeem the gasoline card at a filling station that accepts American Express credit cards Source: Toyota “There are people buying tires at retail for less than I can get them,” the manager says. “The $50 gas card in some cases does not make up for the price differences.” Other tire retailers are sponsoring similar promotions. Steve Parnow, service director at Grossinger Toyota North in suburban Chicago, says Firestone stores in his market have offered gasoline cards. But he thinks Toyota’s offer will help build his tire business. “Most clients don’t think of us as tire stores,” Parnow says. “This builds brand notoriety that we are a tire store. We are becoming quite aggressive.” c http://powerpusher.com http://powerpusher.com http://www.jcowansprotalk.com http://www.jcowansprotalk.com

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Automotive News - June 2, 2008 Gas prices fuel industry's new era Chrysler faces tricky dealer mergers Honda may crank out more Civics in N.A. Mercedes will move into Chrysler Pacifica studio Ford to offer hatchback version of Fiesta Prestige Automotive sells stores but keeps Black Enterprise top spot Dealership marketers take to text messaging Senate to hear personal pleas on roof crush rule Magazine: Chrysler, Fiat are talking Former Fla. dealer gets jail for bilking bank That guy Alfred had possibilities Ford will make next Mustang look smaller Pontiac subcompact may come to U.S. GM: Battery glitch cuts hybrid sales Porsche exec: CAFE 'will not change our nature' Japanese rivals race for lithium batteries Jatco boosts CVT capacity in Mexico for N.A. vehicles Mercury deserves a better chance Rising gas prices have changed the U.S. market Marketing and sales: Context and content Mexico's Nemak grows beyond North America Buyers didn't quit GM; GM quit on its buyers Brand perceptions change slowly Bloggers are journalists, too Nice HQ, Nissan, but where's Nobe? Chrysler's Chernoby: Growing up gearhead Picture this Mitsubishi hopes new gearbox widens Evo's appeal Openlane gets funds Obituaries Survey: Going green can get your auto ad noticed Inrix: Router can reduce traffic delays Mazda6 gets own platform for U.S. ... sort of Mazda6 set to take on mid-sized sedan heavyweights Troubled or not, the United States still beckons What's next? More transplant models headed this way Exports help as Mitsubishi sorts things out Irma Elder: 'This is one of the toughest times we have had' Fitzgerald: Dealers, consumers need alliance Can Bertone design a comeback? Family-owned business struggles for survival Some design houses fall on tough times Hughes: Not a subscriber? No problem American Axle lines up new non-U.S. business GM think tank works to boost service business Toyota offers gas card as tire incentive VW turns to common software to develop products Continental's Calif. office targets Asian carmakers ZF sees chassis, axle opportunities in N.A. Flex: A new Ford image ... or just over the top? Ford targeted Flex interior quiet, ride Ex-dealership managers say firings were over religion Dealers Genesis in Toledo: It's a long story Back woes sideline Nardelli GM: 19,000 take buyouts Panama to head Nissan Mexicana Wilhite jumps to Jumpstart Dauch sons move up, out Kozyra leaves Continental Ford to lay off salaried staff More small cars to arrive in 2009-10 Even on used market, big trucks go begging Auto advertisers adopt mpg mantra Industry to motorists: We're here to help Diesel prices hit suppliers' Mexico sites Can Camry catch F series? Leno's words of wisdom for automakers Nissan's carbon credits ease global warming guilt Automotive CEOs' pay pales next to peers' Year of the Small Car can't come too soon Foreign suppliers adding capacity in Southeast From cows to kimchi: Making Alabama sweet home for Koreans After light-truck push, cars are king again Mexican suppliers expect sales record in '08

Automotive News - June 2, 2008

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