ANspreadAD.qxd 9/2/2009 3:06 PM Page 1 ANspreadAD.qxd 9/2/2009 3:06 PM Page 1 20090914-NEWS--0020-NAT-CCI-AN_-- 9/10/2009 10:55 AM Page 1 20 • SEPTEMBER 14, 2009 For some nameplates, serviceservice && partsparts ’09 hasn’t been so bad John K. Teahen Jr. salestales Toyota pushes quick service, Thirty-five of the car-truck name- plates on the U.S. market reported sales increases for the first eight parts Web site to boost revenue months of this year. That’s not all bad in a year that every- John K. Teahen Jr. Kathy Jackson Going up one agrees has been a real stinker. is senior [email protected] But let’s look at those numbers. editor LOS ANGELES — To cope with slow new-vehicle sales, Service and parts provide a greater percentage of the First of all, it’s 35 out of 228, or 15.4 of Automotive Toyota is working on ways to sell more service and parts average Toyota store’s revenue than they did 2 years ago. percent, in a bad year. Eight of those News. to boost revenue for dealers. 2009 THROUGH JULY 2007 were introduced midway or later in Toyota is developing a Web site that will allow con- New-vehicle sales 28% 39% 2008, so they weren’t on the market didn’t help General Motors much sumers to accessorize their vehicles online before they Service and parts 48% 38% for the full eight months last year. It with August sales. In fact, the compa- go to a dealership, says Jane Beseda, group vice presi- follows that 2009 sales are higher. ny fell farther behind its not-so-great dent of the customer service division at Toyota Motor Source: Toyota Motor Sales U.S.A. Now we’re down to 27 winners, or 2008 performance. Sales U.S.A. 11.8 percent. And four of them post- Sales declines for August vs. last In addition, later this year the company plans to roll out ed gains of 100 or fewer. So, 23 major year were Chevrolet, 9.1 percent; new methods to sell more accessories at Toyota and Lexus winners, or 10.1 percent. GMC, 45.3 percent; Buick, 51.1 per- dealerships. What is a nameplate? Try it this cent; and Cadillac, 55.0 percent. A quick-service program for Toyota dealerships also will Toyota customer service VP way: Chevrolet is the brand; Malibu, Pontiac, one of the makes GM is begin this year. Jane Beseda: “Eighty percent of the the nameplate; LS, the series; and dumping, was up 23.3 percent. But “It has always been important to have good fixed opera- dealers’ service dollars come from four-door sedan, the model. the three other discards had a miser- tions,” Beseda says. “With the decline in new-car sales, it maintenance. Our goal is to help able month, with declines of 58.4 per- is even more important.” them make maintenance smooth, Only 4 domestics on list cent for Saturn, 64.0 percent for quick and efficient.” Only four domestics made the list. Hummer and 67.8 percent for Saab. Pilot programs go national Two were Fords: the Fusion sedan and GM as a whole was off 20.1 percent. A quick-service program was piloted in 2008 with 23 Toyota wanted, but just made low-key sales pitches on the Escape crossover. The others were the One reason for the decline, accord- dealers. The company hopes to add 60 more dealers dur- showroom floor to each customer. Nilsen says the dealer- Dodge Journey crossover and Pontiac ing to GM: Last year, the company ing the next few months. ship paid salespeople $5 to $15 just to make the presenta- G8 sedan. The Ford Flex crossover and was staging an employee-pricing- Under the program, which primarily covers oil changes tion, whether or not they sold an accessory. Dodge Challenger muscle car were for-all program. and scheduled maintenance, two technicians work si- Nilsen says that from February through April, the store up, but neither was on sale for the full multaneously. The goal: get the car in and out within an had a 15 to 20 percent penetration and made about $70 eight months of 2008. How they stand hour. gross profit on each accessory sale. “That was business we The G8’s increase was tinged with After eight months, GM Co. led Toy- “Eighty percent of the dealers’ service dollars come from never pitched before,” he says. “Before it was left up to F&I. irony: It won’t be around for the 2010 ota Motor Sales U.S.A. by about maintenance,” Beseda says. “Our goal is to help them make It got pushed to the side. model year, and neither will Pontiac. 211,000 for the top spot and probably maintenance smooth, quick and efficient.” “We think there’s potential for it, but not on the grand Nineteen of the 23 big gainers were will maintain its grip on first place for She says the pilot program improved dealers’ revenues scale that Toyota thinks. It’s very labor-intensive, and you imports — four from Land Rover and the year. Ford Motor Co. was third, fol- but declined to be specific. have to constantly promote it, but those dollars can add up. three each from Hyundai, Kia, Jaguar lowed by American Honda, Chrysler Meanwhile, from September 2008 through February Over the three-month period, we added another $6,000 to and Subaru. The Nissan Z sports car, Group, Hyundai-Kia Automotive and 2009, 37 Toyota dealers tested best practices to sell acces- the bottom line that wasn’t there.” Nissan Rogue crossover and the Audi Nissan North America. sories, covering sales training, marketing and other ef- Nilsen is less enthusiastic about the program allowing sedan were the others. American Honda Motor Co. is forts. consumers to accessorize online. “We also have three The biggest increase among the 23 153,588 sales ahead of Chrysler; last George Whitehouse, Toyota’s national manager for Honda stores where customers can accessorize online was scored by the Fusion, up 16,163 or year Honda was up by only 7,787. accessory and product planning, says accessory sales at and buy accessories online, but we almost get no business 15.0 percent, followed by the Subaru Hyundai-Kia, now sixth, is 2,750 ahead pilot dealerships increased 31 percent during the pro- from that,” he says. Forester crossover, up 15,711 or 39.4 of Nissan. Last year at this time, Nissan gram, while sales at other dealerships increased only 3 But John Horton, owner of San Francisco Toyota, is ea- percent. Next were the Pontiac G8 led the Koreans by 202,530 sales. percent. ger to get started. He did not participate in the pilot pro- with a gain of 9,959 and the Hyundai He says nine of Toyota’s 10 distribution regions are gram. Accent subcompact, up 9,282. You may e-mail John K. Teahen Jr. at planning to roll out the pilot program for Lexus and Toy- “We definitely feel personalization is important,” Hor- The first month out of bankruptcy [email protected] ota dealers later this year. ton says. “In the past there has not been a high emphasis “The business model was developed by Scion,” White- on this on the Toyota side. Now they’re working with us to house says. The Scion model encourages buyers to acces- make it easier to facilitate it.” sorize vehicles to their tastes. Whitehouse says Toyota recently launched a new mar- “We are leveraging this same model across our Toyota keting strategy using the Web, print, direct mail and and Lexus dealers,” Whitehouse says. e-mail to help drive traffic to dealerships and promote ac- cessories. Mixed feelings Toyota also notifies existing owners of new products or Ralf Nilsen, parts manager at Piercey Toyota in Milpitas, products they did not purchase with their vehicles and pro- Calif., participated in the accessories pilot. He says his vides dealers with co-op money to help them market the store did not set up a separate accessories department, as products. c Survey, data: Including maintenance helps sales Mark Rechtin value the program more than what it prices the cost of maintenance [email protected] costs us, or the equivalent amount of through the warranty period. Lexus, LOS ANGELES — Including main- cash or subvented lease.” Land Rover, Jaguar and Audi pay for tenance in a car’s price boosts sales, Lincoln Merrihew, senior vice pres- the first oil change and service. according to data from Volvo and a ident of the TNS Automotive consult- Volkswagen and Mini are the only recent survey. ing firm, called such maintenance mass-market brands that offer a war- Volvo says its Safe and Sound pro- programs “a time-release incentive.” ranty-length maintenance program. gram for the end of the 2009 model “They are less likely to damage In 2000, Mercedes-Benz USA began year — a plan that includes mainte- residual values the way cash-back including maintenance for the dura- nance during the five-year warranty does, less likely to cheapen the brand tion of the warranty, covering oil — has improved closing rates in the image and more likely to foster a con- changes, filters and fluids. But Mer- showroom. Normally, salespeople tinued relationship between the cedes halted the program in 2005 be- close 30 percent of their deals, Volvo brand, the dealership and the con- cause of costs. Also, customers be- says. But with Safe and Sound, the rate sumer, which is key to owner loyalty,” came confused as to what the pro- is more than 35 percent.