One of the last opportunities in the modern dealership to make money is the reconditioning department. Unfortunately, most general managers don’t appreciate this function’s role in a well-run used car operation.
As we move into a market identified by slowing new car sales and used car departments awash with off-lease vehicles, reconditioning will play an increasingly important role in your dealership’s sustainability. When good times return, a highly tuned recon operation run by the numbers will:
- Ensure pro table used car margins
- Get vehicles frontline ready for less cost
- Increase inventory turn
Getting a dealership to this level of recon efficiency and profitability is a GM-level responsibility. General managers who understand how to move this important function into 2016 will get rid of ineffective whiteboards and spreadsheets. No recon manager I’ve talked to believes these tools do a good job in tracking recon processes and holding the crew responsible for getting all the details done on time.
The GM also has overall authority for the departments connected to the recon process — trades, auctions, service, parts, sublets and used car sales.
When asked about their recon cycle times, most recondition or service managers will say they’re at about five days. NADA says the goal is three. In reality, when we apply Time-to- Market (TTM) work ow so ware science to these dealers’ recon, they learn their cycle is not three days but more like seven to 12 days.
So the GM has another responsibility: deciding to drive down the dealership’s recon cycle to a more pro table, and very attainable, five days or less. This can be a high mountain to climb, however, without best-in-class processes in place to automate, monitor and improve work ow through recon to retail.
By not knowing for certain what your true recon cycle time is, your “recon plan” leaks time and money. That leakage is wrecking your retail gross and inventory turn.
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