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Does Your 2013 Business Plan Include Used Car Turns or Lowering Average Reconditioning Expense?

2011 and 2012 were breakthrough years for dealers installing real-time reconditioning workflow advances. Similar technology
has been successfully implemented in the manufacturing sector, including automotive, to simultaneously reduce cost and improve quality and flexibility, while also increasing volume. Automated workflow management in reconditioning includes the integration of smartphones and tablets with real-time
used car manager repair expense controls. It provides a state-of-the-art tool to identify and resolve inefficiencies while creating a culture of accountability.Until now, the answer to improving recon
has always been human-driven, with more meetings, new team leaders, new procedures and a time-consuming manual-entry spreadsheet. After two or three months, users revert to ignoring spreadsheet updates and asserting accountability in favor of getting the actual work done.

This old-school rationale that recon can be efficiently managed with homegrown solutions no longer makes economic or business sense at any volume. With more than 180,000 cars processed in 24 months validating real-time recon workflow technology, this new technology is no longer an exclusive club for early adopters.

Systems can now be created using an individual dealership’s DMS inventory updates in only a few hours. These systems can be designed to work for groups of multiple stores with or without shared recon services, such as body, PDR or detail. In addition, vendors can participate on a controlled basis and their performance can be measured.

Established benefits include:

  • Transparency and Accountability — Fixed ops, body, parts, detail and marketing departments can defend, justify and improve their individual real-time performance to the GM, GSM and, most importantly, the used car sales manager.
  • More Selling Days — Mobile functionality has taken the used car manager’s approval or disapproval of repairs from 12 hours to 1.5 hours, increasing selling time and reducing parts and labor expense.
  • Lower Reconditioning Costs — The used car manager’s immediate response to the list of possible repairs limits unnecessary repairs or makes possible a timely decision to wholesale.
  • Accelerate Monthly Profits – Eliminating 2.5 days of recon time adds another inventory turn. For example: Dropping from eight days average to 5.5 days for 100 cars per month is an increase of 100 sales per year, or eight per month. At $1,750 per car, you add $14,000 in new gross profit each month for about five dollars per car, or an ROI of 28:1.

 

 

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