Fixed Ops Journal - April 2018 - F14

FIXED OPS JOURNAL

FIXED OPS JOURNAL ILLUSTRATION

A

ALYSHA WEBB
foj@autonews.com

s new-vehicle sales - and profits
- slump, franchised dealerships
are placing greater emphasis on
selling used cars and trucks. Inevitably, that also means a renewed focus among service departments on
cutting the time and cost of reconditioning
used vehicles for sale, from cosmetic detailing
to major repairs.
"Reconditioning is absolutely essential,"
says Scott Greer, director of used-vehicle services at Birchwood Automotive Group, which
operates 16 dealerships from its headquarters
in Winnipeg, Manitoba. "Reconditioning cars
properly adds to retention, and to people
coming back to us and buying the next car."
The process isn't cheap. The estimated annual cost of reconditioning used vehicles for the
average U.S. new-vehicle dealership more than
doubled from 2009 to 2017, to $635,453, the National Automobile Dealers Association reports.
Part of the reason for that increase, warns
Joe Lescota, an industry consultant in the Atlanta area who specializes in remarketing, is
that "no one is watching the clock. Where
gross is made is in speed."
Nearly two-thirds of the money a dealership
invests in reconditioning gets recovered as
gross profit, Lescota estimates. Yet recondi-

PAGE 14

APRIL 2018

FLEET
AROUND

TURN
THE

 Service departments face renewed time,
cost pressures to recondition used vehicles

tioning is a regular source of conflict between
service departments, which often prefer to
concentrate on lucrative customer-pay work,
and used-vehicle managers who want to get
inventory prepared and on the lot as quickly
as possible.
Lescota told Fixed Ops Journal that three
days is the "drop-dead max time" a dealership
should take to recondition a vehicle. "Your
better-run operations push 48 hours to maximize inventory turn and profitability," he says.
Yet a 2016 Cox Automotive study concludes
that dealerships that recondition cars and

Recon rise
The estimated annual cost to the
average U.S. new-car dealership of
reconditioning used vehicles more
than doubled between 2009 and last
year.
2013 $483,245
2009 $288,479
2014 $481,190
2010 $283,335
2015 $547,070
2011 $402,697
2016 $598,595
2012 $416,601
2017 $635,453
Source: National Automobile
Dealers Association

see FLEET, Page 16



Table of Contents for the Digital Edition of Fixed Ops Journal - April 2018

Contents
Fixed Ops Journal - April 2018 - Intro
Fixed Ops Journal - April 2018 - F1
Fixed Ops Journal - April 2018 - F2
Fixed Ops Journal - April 2018 - Contents
Fixed Ops Journal - April 2018 - F4
Fixed Ops Journal - April 2018 - F5
Fixed Ops Journal - April 2018 - F6
Fixed Ops Journal - April 2018 - F7
Fixed Ops Journal - April 2018 - F8
Fixed Ops Journal - April 2018 - F9
Fixed Ops Journal - April 2018 - F10
Fixed Ops Journal - April 2018 - F11
Fixed Ops Journal - April 2018 - F12
Fixed Ops Journal - April 2018 - F13
Fixed Ops Journal - April 2018 - F14
Fixed Ops Journal - April 2018 - F15
Fixed Ops Journal - April 2018 - F16
Fixed Ops Journal - April 2018 - F17
Fixed Ops Journal - April 2018 - F18
Fixed Ops Journal - April 2018 - F19
Fixed Ops Journal - April 2018 - F20
Fixed Ops Journal - April 2018 - F21
Fixed Ops Journal - April 2018 - F22
Fixed Ops Journal - April 2018 - F23
Fixed Ops Journal - April 2018 - F24
Fixed Ops Journal - April 2018 - F25
Fixed Ops Journal - April 2018 - F26
Fixed Ops Journal - April 2018 - F27
Fixed Ops Journal - April 2018 - F28
Fixed Ops Journal - April 2018 - F29
Fixed Ops Journal - April 2018 - F30
Fixed Ops Journal - April 2018 - F31
Fixed Ops Journal - April 2018 - F32
Fixed Ops Journal - April 2018 - F33
Fixed Ops Journal - April 2018 - F34
Fixed Ops Journal - April 2018 - F35
Fixed Ops Journal - April 2018 - F36
Fixed Ops Journal - April 2018 - F37
Fixed Ops Journal - April 2018 - F38
Fixed Ops Journal - April 2018 - F39
Fixed Ops Journal - April 2018 - F40
Fixed Ops Journal - April 2018 - F41
Fixed Ops Journal - April 2018 - F42
Fixed Ops Journal - April 2018 - F43
Fixed Ops Journal - April 2018 - F44
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