Fixed Ops Journal - February 2020 - F24

FIXED OPS JOURNAL

RECON ARTISTS

As used-vehicle profits decline, dealers turn to software to speed up reconditioning

foj@autonews.com

oftware that helps dealerships' service departments prepare vehicles
quickly for sale on their used-car lots
has been around for about a decade.
But adoption of - and competition among -
these digital products continues to grow as
profit pressures impose a sharper focus on reconditioning cycle time.
Dealers' retail gross profit per used vehicle
declined from $2,415 in 2016 to $2,004 in
2019, the National Automobile Dealers Association reports. At the same time, average daily holding costs per used vehicle rose from
$32 in 2017 to $37 in 2019, according to the
automotive consulting firm NCM Associates.
Couple these factors with what Cox Automotive calls two years of high consumer demand and high wholesale prices for late-model used cars and trucks, and the importance to
dealerships of tracking and expediting the reconditioning process is ever more acute.
Established software providers such as Rapid Recon, ReconAdvisor and ReconTRAC face
challenges from newer competitors that claim
to offer dealerships additional capabilities
and advantages. In response, the market leaders are updating their products with what they
call easier-to-use features and greater customer support.
"We can't buy, transport or service our cars
any cheaper," says Jon Burkeen, corporate velocity manager for Hudson Automotive Group
of Charleston, S.C., which operates 18 dealerships from Ohio to Louisiana. "The only thing
we can do is try to cut down on our turn time."
He says the Hudson group uses software
from Rapid Recon to monitor each stage of
the reconditioning process. Hudson created
Burkeen's job in 2017 to enable him to work
with its dealerships to trim reconditioning
times. Hudson's best-performing stores typically get used cars and trucks ready for sale
within three to five days of their arrival, down
from seven to 11 days before he arrived.
Bridget Townsend, Rapid Recon's vice president of product development, says a turn
time of three to five days sets a high standard.
Five to seven days is "very good," she says, but
some dealerships are working to recondition
used vehicles in less than three days.
"The quicker I can get my cars sold, the faster my inventory will turn over and the more
cars I'm going to sell in a year," Townsend told

PAGE 24

Last month,
ReconVelocity
introduced a
module that
incorporates GPS
devices with its
software. This
lets the software
move a vehicle
from one task to
the next in the
reconditioning
process without
the need for
manual input.

ALEX KWANTEN

FEBRUARY 2020

Soft sell

These vendors are among the major providers of reconditioning
software to franchised new-vehicle dealerships.
COMPANY

YEAR LAUNCHED

MONTHLY COST

2011
2016
2013
2019
2014
2011

$395-500
$300-700
$399
$695-995
$399
$399

Rapid Recon
ReconTRAC
Recon Advisor
ReconVelocity
Simple Recon
iRecon
*Approximate

# DEALERSHIP CUSTOMERS*

1,600-1,700
200
216
265
50
Declined to say

Source: Companies

Fixed Ops Journal.
Townsend says Rapid Recon software now
enables reconditioning managers to track recommended, rejected and approved repairs. It
also provides more data to potential buyers
about reconditioning of a particular vehicle,
she adds, "which allows salespeople
to sell cars on the value added by the
recon work."

makes them more money."
Hathcock founded the automotive customer relationship management company
ELEAD1ONE in 1999 and sold it to CDK Global last year. ReconVelocity emerged from his
purchase of a smaller software company,
Trace Recon, in 2018. Hatchcock says
ReconVelocity's software can retrieve
repair-order and vehicle inventory
data directly from dealership management systems such as CDK.
Seat at the table
In January, the company anA new player in the reconditioning
nounced a module, VelocityLocate,
workflow software market is ReconVewhich integrates global positioning
locity. About 265 new-vehicle dealersystem devices with ReconVelocity's
ships are using its software, says comsoftware. This enables the software to
pany founder Hugh Hathcock. The cost Townsend: Fast
of the software ranges from $695 to turns, more sales move a vehicle from one task to the
next in the reconditioning process
$995 a month, plus a one-time fee of
when a dealership physically moves between
$1,000 to $3,000 that the company says covers
processes with no need for manual data input.
the costs of setup and training.
Rapid Recon said it would debut a similar
Hathcock warns that buy-in by dealership
Bluetooth-based locating system at the 2020
employees is essential to the success of any
NADA Show.
software product. "Software enables people
and process," he says. "But people only use it if
they can see how it makes their job easier and
see RECON, next page

Fixed Ops Journal - February 2020

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