Why do dealers need to join the Recon Revolution? Because new car gross profits have steadily declined over the years; for some brands, front end profits have almost completely diminished. It is not at all uncommon for dealers across the country to sell cars at a loss each day. Dealers are giving new cars away, chasing factory incentives in hopes of offsetting lost gross on deals to gain market share. More than ever, dealers are looking to the Used Car Department to make up for gross lost on new car sales, bringing in fresh trades and increased fixed ops revenue.
For decades, managers have used spreadsheets, paper logs, and whiteboards to keep track of vehicles in recon and their progress to being Retail-Ready.
Imagine that your team uses a shared spreadsheet to keep track of inventory in recon and to monitor the progress toward getting your inventory Retail-Ready. Then, let’s assume your goal is to sell 100 used cars a month at $2,500 per copy. The month closes and, indeed, you achieved your goal, with CSI scores in line and the Service Department making money. Would it be hard for you to admit there are problems with the process of tracking and measuring recon performance with a spreadsheet? We consult with dealers every day who admit that if managers are “hitting the numbers”, little consideration is given to figuring out how the team could have performed at a higher level.
Manual processes are prone to error. Without technology, automation, and real-time communication there is no way of knowing if you could have sold 130 used cars at $3,200 per copy or 150 cars at $3,600 per copy. Used car sales projections are based on “hope” and last year’s numbers are most often used as the benchmark.
Proactive dealers are examining their recon processes to identify lost profit and missed opportunities for additional turns of inventory. We refer to this change as “A Recon Revolution” because it requires a complete overhaul of antiquated processes and competing departmental goals. It’s time that you Join the Recon Revolution!
The fact is in recon every minute counts and equates to profit – either lost or retained. It is time for managers to shift concerns about the gross the Service Department is making on “their inventory” to the profits that are seeping out through ineffective recon processes and expenses that are increasing due to lost and idle vehicle time.
Joining the Recon Revolution has motivated progressive dealers to break old habits and reap significant financial rewards by focusing on inefficiencies and process improvements. The time is now to turn wasted time in recon to profit that flows to the bottom line!
Karla Guleserian, MSEC
Dealership Process Ninja & Recon Expert
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