Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
Page 44 of 62
dealership spotlight / service Kimberly Long
Fixed Ops Goes From Life Preserver to Profit Powerhouse at Lupient Chevrolet
t many dealerships around the country, the service department became something of a life preserver during the recession, keeping a dealership afloat while vehicle sales were down. At Lupient Chevrolet, the service department morphed from a life preserver in 2009 and 2010 to a profit power- house in 2011.
A
Lupient Chevrolet General Manager Tom Schmitz said the service department's performance in 2011 was the result of several things, what he called a "perfect storm" in fixed ops. The outcome of that perfect storm was an annual increase of roughly $900,000 in profit for fixed ops and a more-than 20 percent improvement in the service department's CSI scores.
The storm began brewing in 2009 when Lupient Chevrolet, located in Bloomington, Minn., was slated by General Motors to lose its franchise along with hundreds of other dealers. Schmitz, however, was unwilling to let that happen and began an aggressive campaign to not only appeal the manufacturer's decision but also keep things moving in sales and service in order to show their customer base "that we were not going away." He said, "We went out and we actively purchased brand-new cars from other dealers at broker prices," and sold the
42
nearly-new vehicles as used on Lupient's lot.
Although keeping inventory on the lot while they had ap- pealed GM's decision was a large factor in keeping the store alive, ramping up busi- ness in the service department was also extremely important during that time. In addition to purchasing vehicles from other dealers around the country during the intended wind- down period, Schmitz said, "We were doing everything we
could to be sure that we kept the service department up and running because we knew that we did not want to send the message, contrary to what our competitors were mailing, [that the dealership was shutting down]."
A boon to the service department during that time was that fact that, despite GM's intent to take away the dealership's Chevrolet fran- chise, the store was named an authorized service provider for
Saturn after that particular GM brand met its demise in late 2009. "That was a big, big push for our fixed [ops]," he stated. "We embraced it. We were aggressive with trying to recruit Saturn owners to come to this store for service. We also … were able to retain a number of key Saturn employ- ees that were from the other stores, so that when the Saturn owners came here, they had a familiar face." He added, "The Saturn owners tend to be very religious on their
In 2009, Lupient Chevrolet received notice that General Motors was revoking its franchise. Instead of winding down its new-car operation, management forged ahead by purchasing new vehicles from other GM dealers to resell, and the dealership ramped up business in service to help stay afloat. Ultimately, the dealership's franchise was reinstated, and the service department is now a profit powerhouse.
