AUTOMOTIVE

Excerpt from Presentation at National Automotive Dealer Association
The Consumer in the 21st Century

According to the J.D. Power 1999 Dealer Satisfaction with Online Buying Services Study (The Power Report, April 1999), more than one-fourth (28%) of all dealer principals are currently under contract with at least one buying service. That’s double the number from the previous year’s study. And dealers believe these outside lead-generating companies are doing a better job for their dealerships’ sales departments than their own web pages are doing. Dealerships receive an average of 37 leads each month from their services, 61 percent of which are serious shoppers.

A NADA survey reported in Automotive News (October 1997) that more than half of all new-car dealerships in the U.S. had Web sites; 40 percent of those without a site at the time planned to have one in six months.

Excerpt from Policy and Procedures Manual
Responsibilities of the AUCTION:

1. Receiving, Checking In, Accepting, and Rejecting Vehicles

Policy

The AUCTION must obtain proper documentation for a vehicle before it can be put up for sale. The AUCTION must follow a prescribed set of procedures in checking each vehicle in. Vehicles must meet a number of conditions for the AUCTION to accept them.

1.1 Obtaining the Proper Documentation for the Vehicle

Procedures

The AUCTION receives the title and condition report in the following manner:

a) The title may come to the AUCTION via different routes depending on the source of the vehicle. Here are the possibilities:

Fleet re-purchase vehicles: The AUCTION receives the title and the vehicle (and a condition report) from the fleet customers.

Off-lease vehicles: The AUCTION receives title to these vehicles from the financial institution, typically (Name).

Excerpt from Book-Length Study Written for Consulting Firm
Parts Inventory Management and Replenishment

…The parts/repair problem stems from a combination of three factors.

1. The unavailability of parts. Lower Consumer Satisfaction Indices in the areas of repair and service have been linked directly to the unavailability of parts at the dealership. Regardless of how pleasant the purchasing process has been or how well the vehicle has performed, customer satisfaction plummets if a part needed for repair or maintenance is not on the shelf and the customer is made to wait. Shown below are typical metrics regarding a dealership’s parts inventory.

2. Overstocked and obsolete inventory. Even the minimal success that dealerships have had in service and repair has been “bought” by overstocking inventory. Low inventory turn results in high working capital investment.

In addition, a large portion of that inventory—as much as 40 percent to 50 percent—becomes obsolete. NADA defines an “obsolete” part as one that has not sold in the past 10 months. With the typical dealership’s inventory valued at between $250,000 and $500,000 (as much as 20 percent of a dealership’s working capital), it is clear that a good deal of money is tied up in obsolete parts.

3. Lack of demand data. In studying the problem, much of the industry has come to realize that at the base of the parts inventory problem is the lack of linkage between wholesale demand and retail demand, between making the parts available and selling them to customers. This lack stems from the inability to collect sophisticated data on parts demand and sales and also from the lack of integration between dealership and manufacturer systems.