Automotive News Canada - February 2020 - v2 - F25

FIXED OPS JOURNAL

RECON

continued from previous page

Like other software providers, ReconVelocity
offers dealership clients training in the use of its
software, and guidance on broader reconditioning practices. Company trainers visit new
dealership customers for several days and return periodically for coaching and follow-up.
"We spend time with everybody who touches recon," Hathcock says. "We teach them
about holding cost and velocity turn. We make
sure they understand what it means to go from
12 days to six in recon."
ReconTRAC also integrates data through
dealer management systems "to help track vehicles from the moment of acquisition," says
Doug Grimaldi, president of Green Cloud
Process, which makes ReconTRAC software.
The company also provides training without a
setup fee.

Greater precision
Vernon Auto Group of Vernon, Texas, piloted ReconVelocity software at its three dealerships, says Chris Slaydon, the company's executive manager. The group previously estimated its dealerships generally were taking
five or six days to recondition a vehicle. But
after it used ReconVelocity software to connect its reconditioning data with its DMS, he
says, the group found its cycle time was actually 11 days.
"We tracked mechanical, detail, photos, but we
weren't tracking it from the moment of acquisition in the DMS," Slaydon says. Using the software "caused us to rethink our strategy. We're at
four days now, acquisition to front line."
The software also allows precise analysis of
costs and revenues from reconditioning each
vehicle, which affect the dealership's calculation of trade-in values, Slaydon says.
"If you come in $20,000 under your estimated
recon costs for the month, some people would
celebrate," he says. "But that $20,000 could have
gone into trades or deals we may have lost."
Slaydon says he considers reconditioning a
revenue source as well as a dealership expense. In effect, he says, a used-vehicle buyer
benefits from the shop's labor and pays for it
in the purchase price. "Used vehicles are our
best repair customers," he says.
Workflow data generated by the software has
helped make every employee who participates
in reconditioning cost-conscious, Slaydon
says. Recon managers get bonuses based on
gross profits from used-vehicle sales, vehicle
turn times of no more than five days and reconditioning costs that remain within 10 per-

Dealership groups debate the value
of centralized reconditioning facilities

ALEX KWANTEN
foj@autonews.com

ealership groups differ on the
value of maintaining centralized, standalone facilities to
handle reconditioning work for
multiple stores.
Some groups have moved away from
centers, preferring to incorporate recon activities into individual dealerships' service
operations. Other groups say that consolidating recon work at a central location can
offer substantial economies of scale.
The 12-dealership Stanley Auto Group,
headquartered in Dallas, closed its standalone facility about two years ago, says
Brian Thacker, the company's executive
manager. Many of its dealerships were
more than an hour's drive from the recon
center, he notes.
"A few years ago, when used-car values
began to really rise, it pushed up the logistics cost of moving the cars around,"
Thacker told Fixed Ops Journal.
The group's dealerships now exert direct control over reconditioning costs and
are individually accountable for such
measures as turn time to prepare used
cars and trucks for sale, Thacker says.
"We typically have a three- to five-day
turn now," Thacker says.
By contrast, Auffenberg Auto Group, in
O'Fallon, Ill., built a reconditioning center
for its eight dealerships in 2015, says Jeff
Haynes, the group's general manager of
pre-owned vehicles. The dealerships are
within 6 miles of each other, he says.

cent of estimates. Service technicians and detailers are paid more if they keep the time they
spend on each vehicle to less than two days.
"Now we have detailers talking to used-car
managers and asking, 'Hey, what's our gross
today? What's our turn like?' " Slaydon says.
The Hudson group's Burkeen says that getting the most out of Rapid Recon's software requires designating a "team captain" of reconditioning who works with dealership service
and sales managers and oversees the process.
"The software offers the kind of accountability the industry never had before," he says.
Burkeen, a former reconditioning manager

Before the center opened, Haynes says it
took as long as 10 to 12 days to prepare
used vehicles. Today, Auffenberg dealerships sell about 500 used cars each
month, with a typical turn time of five or
six days for reconditoning. It plans to
open a new reconditioning center in 2021.
Geography is key to centralized reconditioning, says Matt Vollmers, an instructor at the National Automobile Dealers
Association's Dealer Academy.
"If a group is processing more than 250
vehicles a month, all within 5 to 10 miles
of each other, it might pencil out," Vollmers says. But company managers must
closely monitor the costs of logistics, employee salaries and real estate related to
reconditioning, he adds.
Individual dealerships can reduce turn
times by assigning service technicians exclusively to reconditioning work, Vollmers says. Pulling techs away from recon
duties to handle customer-pay jobs slows
down the process, he says.
At market-competitive wages, Vollmers
calculates, "173 hours of paid repair work
per month supports one full-time technician." A dealership with that much reconditioning work "can afford a dedicated recon tech," he says.
Vollmers also recommends that dealerships hire a reconditioning manager.
"That might cost you $75,000 to $160,000
a year," Vollmers says, but he adds that
much of that compensation can come in
the form of performance bonuses tied to
reconditioning productivity. 
for two other dealership groups, says he began hiring recon managers for individual
Hudson stores last year. Half of the company's
dealerships now have such managers.
His most successful hire, he adds, had no
previous automotive experience but managed
logistics at a warehouse. "It's all about knowing process," he says.
Burkeen says he expects further breakthroughs in product development.
"New ideas are going to push everyone to be
better," he says. "The only way we can make
more money is to push costs and turn times
down." 

FEBRUARY 2020

PAGE 25

Automotive News Canada - February 2020 - v2

Table of Contents for the Digital Edition of Automotive News Canada - February 2020 - v2