Back shop champs focus on customers

Most dealerships in the Ward's Dealer Business 500 excel across the board. But some really stand out - like those with top service, parts and body shop operations.

Becoming a back-shop champ is tough these days. Vehicles are built to last 100,000 miles or more, with little maintenance.

"The back shop is an interesting place right now with the improving vehicle quality and reduced warranty costs," says David E. Cole, executive director of the University of Michigan's Office for the Study of Automotive Transportation. "It's a different world from what we have had."

Dealerships with the top back-end businesses have learned that the key is to focus on customer service. These dealers also have figured out that if customers have positive service or body shop experiences, they're more likely to remain loyal showroom customers.

"We're just concentrating on improving customer care," says Garth Blumenthal, general manager of Fletcher Jones Motorcars in Newport Beach, CA. The dealership is among the best in service volume with 1999 sales of $16.5 million.

Fletcher Jones Motorcars, which sells Mercedes-Benz vehicles, has 75 service bays and runs three shifts from 5 a.m. to 10 p.m. Mr. Blumenthal would operate his service department around the clock except he is limited by a city ordinance.

The store's service success continues into the new millennium. In March of 2000, it raked in $2 million in business. In April, a short month due to the Easter holiday, it brought in $1.95 million.

To make more room for more service customer vehicles, the dealership is moving the roof-top employee parking lot off site.

Looking at service as a percent of total dealership revenue, newcomer DSU Peterbilt-GMC of Portland, OR, leads the pack at 13.5%. Colorado Springs, CO's Team Chevrolet is next at 10.9%

The service department revenue of all dealerships in the Top 500 is $2.164 billion.

The perennial leaders of the Ward's 500 in parts sales have done it again. Lustine Chevrolet, of Hyattsville, MD, and Brown & Brown Chevrolet, of Mesa, AZ. They deploy overnight deliveries to hundreds of dealer and independent service garages in the South and Southwest, respectively.

Lustine raised its part volume 29.2% to $76.6 million, which accounted for two-thirds of its total 1999 revenues of $114.1 million. Burton Lustine owns the dealership.

Brown & Brown, owned by AutoNation, Inc. and run by Henry E. Brown, advanced 20.3% to $56.1 million. Its parts income, however, took a much smaller share of total gross revenues, 21.8%, with the Phoenix area store focusing across the board on fixed-cost departments such as its service department, which grossed $16.6 million, and its body shop, $7.6 million.

The parts department revenue of all of the Ward's 500 dealerships is $3.545 billion.

If you want to run a competitive body shop, you might consider moving to Plano, TX, where Crest Autogroup and Ray Huffines Chevrolet vie for the most lucrative collision repair operation among the 500.

Crest, owned by VT Inc., leads the overall body shop category by being tops in total revenue with $10 million and second as a percent of the total business with 9.2%. Huffines is a close second in total body shop revenue with $9.6 million.

"There is major competition in this area," says Michael Coston, managing partner the Crest operation. "Not only from Huffines, but from other dealers and the independent shops."

There's also competition between other VT-owned body shops around the country. Crest, which has an acre of body shop under roof, takes in 30 cars a day and keeps them on average for a week per $1,000 of repair.

The facility employs eight estimators, an office staff of five, 20 body technicians and 15 painters. "They can work as much as they want," says Mr. Coston. "I'm very proud of all of our back-end people."

Like the service department at Fletcher Jones Motorcars, Mr. Coston says taking care of the customer is vital at the Crest body shop.

"We focus on the speed with which we get customers in and out," he says. "And we keep them apprised of the progress of the work along the way. They can make appointments on line and we'll deliver cars to customers."

The body shop has its own courtesy van to transport customers to and from the dealership if necessary.

"Even though it's not part of any official program, we have our own little CSI survey over there," says Mr. Coston.

Another body shop stand-out is Desert Dodge in Las Vegas. Its 44-stall off-site body shop took in $6.8 million in revenues last year.

Body shop manager Gordon Bailey says his staff keeps busy, in part, because Las Vegas has a high traffic accident rate. A lot of the results of those collisions find their way to Desert Dodge's body shop.

Moreover, Mr. Bailey says success comes from establishing good relations not only with individual customers but with insurance companies as well "because they are customers in a sense."

Total revenue from the body shops of the Ward's 500 dealerships are $828.3 million.

Senior Editor Mac Gordon contributed to this article.