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Hey everyone,
Really cool updates are happening inside Circles. Talked about the latest on LinkedIn this morning.
— CDG
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+34%: Net positive reading for F&I, the highest of any category in the survey. Parts and service came in second at +22%.
-29%: Net negative reading for new-vehicle grosses. Traffic was even worse at -38%.
46%: Share of dealers who said September month-to-date is their worst recent month for new-vehicle gross, vs. 27% for August and 27% for July.
(Source: Surveyplanet / Stephens Inc. Q3 Dealer Sentiment Survey)
Better F&I, parts, and service are topping dealers' list of positive surprises.
Over the last four to six weeks, dealers said finance and insurance, parts, and service were the “biggest positive surprises,” according to Q3 dealer sentiment findings from Surveyplanet and Stephens Inc.
Worse-than-expected traffic and lower new-vehicle grosses were the “biggest negative surprises.”
Here’s how the positives and negatives compared:
Sourced via Surveyplanet and Stephens Inc.
Adding to this, 58% of dealers said July was the best recent month for new-vehicle gross, 23% reported stronger gross in August, and 19% said September (month-to-date).
Similar findings popped up when dealers were asked about the worst recent month for new-vehicle gross.
46% said September month-to-date
27% said August
And 27% said July
NOTE TO DEALERS:
46% of dealers called September their worst recent month for new-vehicle gross, so I wouldn’t be surprised if October looks the same.
Thankfully: The back end has been carrying its weight for a while now, which is exactly why it's worth turning over every stone in F&I, parts, and service. Find where the extra dollar is, where the repeat customer is, and where you're leaving something on the table.
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Nobody's getting excited about new-vehicle gross these days… we know that much. We also know F&I and service are where a lot of stores are finding some breathing room.
Kareem Raposo, general manager at Kia of Port Charlotte (Morgan Auto Group), is one dealer getting that side right.
Here are some Dos and Don’ts based on his Sept. 28 Daily Dealer Live segment:
Do: Move used-car recon to its own shift so customer-pay work gets the daytime hours.
Raposo said his main techs drift toward reconditioning the store's own used inventory because those tickets are bigger and pay them more.
That leaves customers who came in for service waiting longer. His fix is a second shift that runs 3 p.m. to 11 p.m. and works only on recon. His service department is busiest between about 7:30 and 11 a.m., so he wants most techs on customer cars then.
"I could do a loss leader of a $20 oil change, but if they have to wait two hours, they're not coming back to me. All I did was... lose money on the first oil change."
Kareem Raposo
Do: Give service-to-sales its own manager and keep the approach low pressure.
Raposo has a dedicated service-to-sales manager who works only the service drive and doesn't desk any deals for the showroom floor. In that role, the manager leads a team of salespeople who also work out of the service department.
How it works:
The team wears different-colored shirts that identify them as part of the service advisor team.
They greet customers in the drive and ask whether they'd like a free trade appraisal or dislike anything about their car.
Some also double as valets, moving cars around.
He also said his team preps the day ahead using automotiveMastermind to see who's coming in.
So far: The store is on pace for more than 50 cars this month from a mix of service-sourced and incremental deals, Raposo said.
Don’t: Ding service advisors when a customer trades out of a car that needs repairs.
Sometimes a customer comes in for repairs but leaves in a new car, which means the repair work never gets done.
Raposo said that, at his shop, the advisor who wrote up that customer doesn't get dinged for it, so sales and service stay on the same side and don’t feel the need to compete with each other.
Time has always been money. What's changed is that it used to be something only some people really felt and enforced. With the level of instant gratification available out there, I don't know anyone who doesn't see their time that way now, or who's willing to waste even a second of it.
That's why Raposo's segment stood out to me. He knows a $19 oil change or matching a coupon doesn’t automatically win a customer if they're stuck waiting.
What matters more is that people feel like you respected their time, and that seems to be a theme he's building his shop around.
