Performance Lexus tries to stock as many used vehicles as new ones.
Kommeth with vehicle-exchange coordinator Mindy McKitrick and service-department customer.
The philosophy at Performance Lexus in Cincinnati calls for long-term employees taking care of customers.
“Our owner, Michael Dever, looks for a family atmosphere that makes the dealership as familiar as the local barbershop,” says General Manager Dan Kommeth.
Well, a local hair salon anyway, considering that Lexus models are in the luxury segment.
Performance Lexus is part of the Performance Auto Network that owns 14 dealerships in Ohio and Utah. The Cincinnati store ranks No.391 on the WardsAuto Dealer 500 with $69.8 million total revenue and 1,388 unit sales,
What may be surprising about a luxury franchise is that Performance Lexus has found a lucrative niche in the under $10,000 pre-owned market.
“We hadn’t looked at that previously, but we found out a couple years ago that there’s added volume there,” Kommeth says. The store sold 636 used units in general last year.
Kommeth instituted an innovative vehicle-exchange program that adds incremental volume and profit and keeps the new-to-used-vehicle inventory close to a preferred 1-to-1 ratio.
The inventory-replenishing program consists of buying vehicles from people who have brought them in for service. The daily double is when they turn around and buy a new vehicle from Performance.
“When we didn’t have enough used cars, we looked at the service drive and thought, ‘We’ve got all these cars coming in, why don’t we talk to the owners,’” Kommeth says. “
It’s proving to be a great opportunity, he says. “We’re still getting our feet underneath us, but I’m optimistic that the service drive is going to be a big opportunity to acquire cars, keep customers in the brand, and boost sales.”
From an office on the service drive, associates greet customers, introduce themselves as part of the vehicle-exchange program, and ask if they would like to have their car appraised. If not, no pressure, no problem.
As traffic thins later in the day, the staff checks to see who is coming in for service the next day.
“They call them ahead of time and tell them they will be in the service drive, and if you’d like more information they’ll be glad to sit down with you,” Kommeth explains.
“We say, ‘We need to find good pre-owned cars, and yours fits the bill.’ If they’re interested, we take them to a traditional salesperson. It’s been an invaluable tool in terms of helping us get some extra volume.
The store’s used-car manager regularly analyzes the inventory mix to make sure stock is in line with models in demand.
The vehicle-exchange program zeroes in on acquiring specific models. “Associates take a little more strategic approach when they’re talking to people on the phone or in the drive,” Kommeth says. “It’s a more precise approach, not scattershot.”