Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Richard Lupo, Fixed Operations Director at Apple Tree Automotive.
Together, we talk about why he’s training master techs from the ground up, how streamlining the online service flow drove a 10x jump in appointments, how Apple Tree goes toe-to-toe with powerhouse neighbors, and more.
Small dealerships are successfully competing against major automotive groups.
Apple Tree Automotive—located in Western North Carolina—is punching above its class, as a smaller dealership group facing some heavyweight competitors in its market.
“Our stores are located just south of Asheville, situated between Asheville and Hendersonville. We've definitely got a bunch of players, and we work hard to stay at or above their level.”
Apple Tree Automotive’s sweet spot in the market is that it’s the only Honda and Acura dealer points in all of Western North Carolina, backed by a 53-year reputation in the market.
Dealerships are becoming community anchors during crisis situations.
Being in the Asheville area has brought on some challenges of a different kind for the dealership over the past 12 months—most notably the historic floods.
“We…did have a couple of our associates—long-term associates—that were affected. We definitely had to put our arms around them and give them, starting with any time off that they needed, and then providing them with resources. “
Apple Tree’s three rooftops—which include an Acura store, a Honda store, and a pre-owned sales center—became a source of stability for the staff and the community, providing free inspection checks of vehicles potentially damaged by the storms.
Dealerships are maximizing their usable space.
Apple Tree Automotive’s pre-owned sales center—which is the group’s original Honda store—has become a central part of the group’s operations since it was repurposed 10 years ago.
“…we freed up the shops at our Acura and Honda store for main shop work and we funneled all of the express work through the service drives of the Honda Acura (stores)—but the work actually gets performed at that pre-owned center.”
The dealership group does its reconditioning at the center and has 14 dedicated bays at the location to do quick services that include 13 items, wiper blade replacements to tire rotations.
Pushing the envelope has its benefits.
Any upselling work that's found during the inspection process at the pre-owned center gets redistributed to the main shops—which has played a major role in Apple Tree’s growth.
“We really overhauled that…About two years ago, we revamped everything. It took a year of working with Honda and Acura to get the proper permits, the proper clearances to do the quick service work…because the Acura store is supposed to have the Acuras and the Honda (store is) supposed to have the Hondas.”
Having a shared service facility that's not within the four walls of the Honda and Acura rooftops took a lot of effort.
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The “Ed Roberts” approach to staffing works.
Richard—who is a friend of the well-known auto insider, Ed Roberts—has adopted many of his philosophies when it comes to staffing.
“…We co-opted some of his strategies and really put in an entry-level technician training program. We quit hiring and quit advertising for lube techs and express techs and things like that. And we developed an entire career path and started advertising for entry-level technicians.”
Over the last two years, Apple Tree graduated seven line-techs out of the program—and it has exponentially increased the throughput for the store.
Fixed operations transformations require total organizational commitment.
The first step to improving fixed ops is a high level of commitment—knowing that it’s worth the investment.
“You have to have the want to change and break that cycle, change the paradigm. And so, it starts with that. And then the planning. Like I said, it took almost a year to get Honda and Acura to sign off on it…, a ton of work to get that done. That (pre-owned) facility was built in the early 90s, so we had to go in and refurb the facility.”
A lot of resources and a lot of assets went into overhauling the facility in addition to the week-to-week expenses.
Getting the team to buy in goes a long way.
Staff members need to be able to see and understand the importance of fixed ops.
“The vision has to be disseminated for everyone: ‘So, here's what we're doing, here's why we're doing what we're doing, and this is what the future looks like.’ And everybody has to understand what that is so that there's a shared goal and people have a better understanding of why we do what we do and the timing of it.”
Without a vision—there is no direction.
Smaller dealerships are embracing "innovate or evaporate" mentalities.
Those words—a theme that Robert lives by in the business—encompass the vision that drives Apple Tree Automotive’s fixed ops department.
“When I came here about four years ago, (Apple Tree) was a wonderful business, solvent as anything, great family to work for—but the fixed operations side of it was much closer to clipboards and pencils…We looked at the areas that needed to be improved and just started checking them off the list.”
When you don’t have the resources of a company like Hendrick Automotive Group, you have to plan and be very intentional about your moves.
Complacency is a major pitfall.
Even though Apple Tree is in a very good position, the auto group is constantly reevaluating its processes to assess what can be improved.
“A couple of years ago, we overhauled our dispatching system. We use an electronic dispatching system for our technicians. And we've grown so much over the last couple of years that right now…, we have to blow our dispatching system up again and rebuild it because our volume has outpaced the parameters that we set a couple of years back.”
Apple Tree is constantly looking at ways to improve its tech—which is clearly going to drive the future of auto retail and fixed operations.
Maintaining a strong team is the formula for long-term success.
A great business culture starts with hiring the right people.
“When we bring entry-level guys into our express service, we're looking for people that want to be in the business. There are plenty of guys out there that will work at an oil change place for six months or a year and then work at fast food…We try not to hire those people. We were looking for people that are career-minded. Part B of that is, when we interview them, we look for automotive passion.”
Staff stability, consistency, and direction are pivotal.
