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Lindsey Auguste and Dennis Galbraith

Lindsey Auguste and Dennis Galbraith Investigative Reporters

Exclusive Blog Posts

6 more reasons why we MUST move Techs to $40 to $50 an hour soon

6 more reasons why we MUST move Techs to $40 to $50 an hour soon

If you have followed my published articles in the past about retaining Techs (based on being a former dealership Fixed Ops Manager and my 17 years of r…

Auto/Mate Names Patrick Reilly as New Head of Marketing

Auto/Mate Names Patrick Reilly as New Head of Marketing

ALBANY, NY, UNITED STATES, December 5, 2016 /EINPresswire.com/ -- Auto/Mate Dealership Systems announced today that Patrick Reilly has joined its team …

Anyone can be a Bi-Lingual Salesman now

Anyone can be a Bi-Lingual Salesman now

I came across an article today on a piece of new technology developed by Waverly Labs.  It is an earpiece that translates between languages.  My …

Tips For Your Car Dealership Website

Tips For Your Car Dealership Website

The days of only advertising in the phone book for your car dealership are over. Having an online presence is now more important than ever before. The firs…

4 Million Views In One Week - Here's How We Did It

4 Million Views In One Week - Here's How We Did It

Thanksgiving Eve.  Turkeys were being prepared to go in ovens.  Drinks were being poured.  And we were preparing to launch a video that we k…

Where Size Matters: A Look at the Top Dealer Groups

 

Last week, Automotive News released its annual list of the top 125 dealership groups. The publication astutely points out that stores ranked on the list this year increased new-vehicle sales 28% over the past two years and used-vehicle sales 27% while the industry grew only 23% in new-vehicle sales. This is often the case with these lists, partially due to weaker groups falling off the list and being replaced by better performers.

Our interest was drawn to the top 10, which is made up of the same 10 companies for several years. The top-10 groups account for 5.4% of all industry stores and 7.4% of all new-vehicle sales. But this has not changed. Over the past two years, the top 10 experienced cumulative growth of 23% in new-vehicle sales, the same as the industry as a whole. So much for theories about the large dealership groups leveraging their economies of scale and scope to grow their dominance.

Oh, but not so fast. The top-10 groups grew their used-vehicle sales 26% during this same two-year period. The national fleet of late-model used vehicles actually declined during this period, and it is only now beginning a slow bottoming-out period. Mighty CarMax is not included in the top 10, which is ranked by new-vehicle sales. But CarMax's used-vehicle sales grew 10.9% from their 2010 fiscal year to 2011, according to the firm's most recent annual report. CarMax sells about as many used vehicles as the next three biggest (AutoNation, Penske, and Sonic) combined.

Not only is there more profit in used vehicles, there is more science involved. Tools like vAuto, FirstLook, and aax are available to all dealers, but many either pass at the opportunity or fail to fully utilize the products they do buy.

Even more upside may be available to large dealer groups. There are fantastic opportunities for centralized procurement and pricing. In fact, centralized decision-making is how nearly every major retailer in your community operates. Banks, supermarkets, department stores, and home-improvement centers all utilize centralized decision making over store-level authority for product, pricing, and even promotions. Smaller dealership organizations can compete in the more profitable used-vehicle market, but they will need to better exchange gut-feel for the science available to them.

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