Trade News

We know tire and wheel services are convenience offerings that help keep dealership service customers from drifting away to independent shops. But balancing and rotating tires, fixing flats and selling replacement tires traditionally yield little to no fixed ops profit.

It doesn't have to be that way.

Tire and wheel services can — and should — be profit centers at most stores. But, as with most revenue-boosting fixed ops strategies, increasing profits from these services takes investment in modern, automated equipment and a commitment to establish processes that service advisers and techs follow 100 percent of the time.

Here's one reason why fixed ops directors should give investing in a state-of-the-art tire shop serious consideration: In the electric vehicle era, selling a customer a set of new tires and a four-wheel alignment may consistently be the highest-dollar repair ticket a shop writes other than body work.

Wit…

One element of the Quantum5 training program is to make service advisers advocates for their customers, a term likely to raise eyebrows at some dealerships because it sounds like giving money away.

But to Joel Tanner, the fixed operations director at Donley Automotive Group, it means building a customer relationship based on trust. As a result, when customers call a dealership for service, they will ask for someone by name.

"Everybody wants a car guy or car girl they can call and say, 'Hey, I need brakes,' or 'It's time for a new [vehicle],' and they want one point of contact," Tanner says. "We want our advisers and our sales team members to be that [person] and build a long-term relationship. Not only do they know my name, but they find value in me."

The Donley group, which has four Ford stores in central Ohio, put service advisers through the Quantum5 in-person training in early March.

Tanner spoke with Fixed Ops Journa…

A class-action lawsuit accusing Sonic Automotive Inc. and a number of its Houston-area stores of violating labor laws will proceed, a Texas federal judge has ruled.

The decision rejected Sonic's bid to dismiss the case filed on behalf of porters, valets, car washers, detailers and shuttle drivers. The suit accuses the dealership group and the stores of failing to pay minimum wage and overtime and failing to pay for all the hours the employees worked. Sonic has disputed the allegations in court filings, arguing it wasn't the workers' employer for purposes of the wage and hours law.

The plaintiffs were employed through now-defunct Rascoa, which had a supply and service agreement with Sonic, the Feb. 25 decision said. They claim they were assigned to individual stores and received uniforms or badges with the dealerships' individual logos, and that Sonic and Rascoa "had joint authority to hire and fire them," jointly controlled their pay rates and …

Dealership parts managers face a daily challenge akin to a double-edged sword: Make sure technicians have the right part for the right vehicle at the right time to achieve same-day service, but without accumulating excess parts inventory, which can drain working capital.

A technology known as remote inventory management can help dealers find a balance between the two competing priorities — and in the process boost off-the-shelf fill rates, reduce lost sales, minimize parts obsolescence and ratchet up revenue. It also gives parts managers more time to focus on things easily neglected amid the day-to-day grind, such as training staff and touching base with wholesale customers.

Remote inventory management also can plug the knowledge gap left by a chronic lack of training for less-experienced parts managers, says Brian Crossin, an instructor at the NADA Academy.

"Parts managers generally receive little training on how to properly inve…

Of the 12 costliest hailstorms in Colorado history, nine have taken place since 2008. Caught directly in the crosshairs of No. 8 on the list — a June 2018 storm that resulted in $276.4 million in damages — was Denver-based Schomp Automotive Group.

"That month we purchased three new dealerships on the east side of Denver, and within a 10-day period they were hit with hail three times," says Michael Dunlap, vice president of business development at Schomp, which operates nine dealerships in the Denver area. "We had cars that were damaged, repaired, put back onto the front line and then damaged again."

The group's 2018 hail losses totaled nearly $200,000, prompting Schomp to start looking at protective solutions.

That same year, insurers began backing away from offering Dealer Open Lot coverage because of the increasing severity of hail damage. Zurich NA also decided not to renew hundreds of policies in hail-prone areas in 2018 citing…

Traffic at dealership body shops should slowly return to pre-pandemic levels in 2021, though it may not be until the following year before the numbers are back to normal.

That's the view of Susanna Gotsch, director at CCC Information Services, a collision software provider. She says most shops reported a 15 to 20 percent decline in business last year — recovering from the first few months of the pandemic when some saw business drop by half.

"Our expectation is that we will continue to see people start to get out more, we'll continue to see improvement" in collision repair numbers, she says. "The second half of the year could be pretty healthy from a volume perspective. Well above where we were in 2020 and maybe only slightly down from where we were in 2019."

Traffic levels — as well as accidents — plummeted during the pandemic as many people worked from home and rarely ventured out. Gotsch says CCC research indicates typical bone-shaped driving routes …

Jason Trevisan took over the top role at vehicle-listings company CarGurus shortly after the year began.

The former finance chief, who succeeds company founder Langley Steinert as CEO, will steer CarGurus through the continuing pandemic while also expanding beyond its core listings business with new retail and wholesale tools — most recently, with the acquisition of wholesale trading platform CarOffer.

The Cambridge, Mass., company is testing new capabilities that allow consumers to build online deals with "penny perfect" pricing, and will allow dealers to use CarGurus' platform to complete tax, title and registration information on transactions involving out-of-state buyers.

"We want to be able to provide whatever retail features consumers and dealers are looking for," Trevisan said. "Some consumers are looking to do the whole thing, soup to nuts, online. Others want to do some things online and some things in the dealership. And…

Waymo duo will double down on AV expansion

Dmitri Dolgov believed from the beginning. A member of the Stanford University team that finished second in the DARPA Urban Challenge in 2007, he was captivated by the early promise of self-driving technology. Soon after the race, he became an original member of Google's self-driving car project.

"That got me hooked," he said. "It became very clear to me that this is the most important thing I could be working on, and the most impactful, exciting thing I could be doing."

Tekedra Mawakana arrived with an outsider's trepidation. A Columbia Law School grad who practiced telecom law and led teams at eBay, Yahoo and AOL, she joined Waymo in March 2017 as the company's global head of policy. She viewed autonomous-driving technology with the same lens as ordinary citizens.

"That healthy skepticism is important, and I think it just led me to ask all the right questions," she said in October 2…

Big and bigger.

That's becoming the norm for nameplates adorning the newest crossovers, SUVs and even minivans.

Already routine on pickups, a fierce segment where owner loyalty runs deep, big, bold badges are now gaining popularity on other light trucks.

Call it pride. Or just Marketing 101.

But when you are a challenger brand such as Rivian, with only two models, you gotta go big with the badging to get noticed by the public.

In the case of Kia's Telluride, introduced for the 2020 model year, the big badging appears both on the hood and around back on the liftgate.

At Ford, CEO Jim Farley wants to create passion brands under the Blue Oval — thus the oversized Bronco name on the new SUV.

But even established SUVs with some of the industry's most dedicated owners are mixing things up.

Chevrolet has moved the badging on its redesigned Tahoe and Suburban from its tasteful spot in the past, the lower left corner of the tail…

WASHINGTON -- General Motors will cancel some truck production shifts this weekend at two U.S. auto plants because of the ongoing semiconductor shortage, the company said on Friday.

The largest U.S. automaker is canceling scheduled overtime production for Saturday at its Fort Wayne Assembly plant in Indiana and canceling a Friday night shift as well as overtime shifts for Saturday and Sunday at its Flint assembly plant in Michigan.

GM said it plans to operate all but one of its plants during two traditional summer shutdown weeks to boost production.

DETROIT -- GMC plans to limit, and in many cases eliminate, floorplan costs for the electric 2022 Hummer pickup and 2024 Hummer SUV long term to help protect dealer profits and simplify the sales process, the brand told dealers Friday.

"We're going to take the risk on that now," Duncan Aldred, vice president of global Buick-GMC, told Automotive News.

As General Motors begins to launch its EV roster this year, the automaker has emphasized a need to reform much of the retail transaction. Chevy is considering a pilot of regional EV lots dealers can pull from as needed, and GM will soon launch a new digital retail tool, powered by Tekion, to help dealers facilitate EV sales.

GMC also plans to work with dealers individually to estimate their market opportunity with Hummer. So far, more than half of GMC's dealers have signed on to sell Hummer EVs, and most must make an investment of about $200,000 in their facilities to support EV sales and service.

Al…

Lithia Motors Inc. is about to take control of southeast Michigan's Suburban Collection, in a move that will mark one of the largest dealership buy-sell transactions in the past decade while cementing the Oregon group's reach in the Midwest.

Suburban Collection dealerships in Michigan are slated to close Saturday, April 10, through 1 p.m. April 12 for "necessary system updates," according to a message on the group's website.

A source told Automotive News on Friday that inventory will be assessed over the weekend and the stores will reopen Monday under Lithia ownership.

Suburban CEO David Fischer Jr. declined to comment on Friday, as did a spokeswoman for Lithia.

Lithia's planned acquisition of Michigan's Suburban Collection, one of the nation's largest privately held dealership groups, was reported by Automotive News in January.

Adding the Suburban Collection will bring the nation's third-largest new-vehicle retailer closer to its goal of…