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Hello All:

Long time reader, first time poster.
I am a newly appointed Service Manager, currently with a large volume Toyota Dealer. We are one of the few that has a separate Car Service Center and a separate Truck Service Center. However, due to our showroom being attached to the main Car Service Center, 90% of the Service profit comes from that facility. So these Certified Vehicles account for alot of our tech hours and the Truck Centers profit. Since taking the reigns at the Truck Service Center, Ive come to understand how things are done here and where this centers profit comes from. We handle all of the PDIs for the dealership ( cars and trucks) , Used vehicles, Certified Vehicles and of course 10% Customer Pay.

I started as a writer, moved up to CRM, and am now a Service Manager. Ive been involved in the industry for 3.5 years with Toyota.
I was wondering if anyone out there, who has worked for Toyota has come across a similar problem with Certified Vehicles and the Used Car Managers who approve the repairs.
Toyota has high standards for their Certified Cars/Trucks/SUVs etc
Our technicians are paid .5 to Certify these vehicles ( inspection only), in addition to write them up for ANY repairs that are needed in order to claim the vehicle as a Certified unit and to pass state inspection.
Once this is done, the writer calls the Used Car manager with a list of the necessary items needed and is to receive an answer.
Sounds Simple for a yes or no answer, right?
Used Cars decides that they can cut corners and go to an independent and get the repairs completed at a lower price, mainly on trim and tires only. We are talking about TOYOTA QUALITY AND VALUE. Not Joe Schmoes Quality RepairsNow , Im not knocking the indy shops, but , when is enough enough? Robbing Peter to pay Paul? Taking from our techs pocket, not to mention the owners pocket, so that Used Cars can keep a higher gross on these vehicles?
Quality and Value are being compromised. A few repairs may be authorized , but for the most part, if it isnt completed to the techs and Toyotas standards, a certified packet does not get filled out and the tech locks it in their box. The Reconditioning Manager and I are allies, but he has no say in the matter and only does what the Used Car Manager says.
He also will order trim from an indy supplier and do the install himself to cut corners. I know he is under pressure and to maintain Toyota Standards, there should be no question when it comes to a vehicle that is up for certification. Has anyone run into this problem before OR does anyone know how to prevent this from happening? Toyotas standards dictate that a tech must sign off on the vehicle and that it is in excellent mechanical order when completed.
Lately, Ive been charging used cars for a re-certify and to have the technicians fill the certified packets out completely. They sometimes sell the cars as certified before the packets are competed or the re-inspection has been done.
A little help or advice?
The Rabbi

Your u/c manager is, I guess, still living "old school" and thinking less money spent on recon will necessarily translate into more gross profit when the car is sold.

Used cars are sold from cost up. Ask your u/c manager to read up on what's going on in the industry....where as much work as possible in kept "in house", the service and parts departments keep their piece of the pie, and strong desk mangers *still* hold strong gross profits when the cars are sold. Everybody wins.

He may say it can't be done but, I assure you, it can.....and it is *being* done at many dealers and has been for years.

Good luck
DD

The used car manager needs to understand how important his department is to the whole facility not just used car department. I would also wonder what the G.M. thinks about this policy. You may also want to look at how service department charges for repairs, I have seen many times that used car department gets billed at a different rate then a retail customer. For example: We may charge a customer 18.00 to mount and balance 1 tire but used cars will pay 31.50 per tire because we didnt menu price. Many times the issue is like any customer and you sometimes have to show value to your used car manager. If that doesnt work then show him the Certified Policy manual where it states having a certified toyota tech. perform repair. He is jeopardizing the ability of that store to sell certified vehicles and no one but the owner should make that call.

Get the GM or owner involved. It would be easy enough for the owner to call the uc mgr in and review every invoice from an indy for a few months(or as long as needed) and have him explain why he used them.

Also as mentioned-make sure your used car customer is getting the lowest price you would offer any other customer.

Quote:
Taking from our techs pocket, not to mention the owners pocket, so that Used Cars can keep a higher gross on these vehicles?

I can almost guarantee that unless the UC manager is desking every deal that this isn't true. I bet after a few months the sales gross is just as much (or as little) as it was when your service was doing the work. Meanwhile - you're right - the dealership has lost the gross on the service sale and gave it to Joe Blow down the road. What's next, does the UC manager want a Honda as a demo? Maybe we could put some Nissan ads on the show room floor, and give customers discount coupons for Jiffy Lube?


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Sad thing is this dealership is close to the same way. The DP and SM are brothers, so sales is really the only thing this DP really worries about.

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"WHY DO YOU WANT THE MAKE, MODEL, AND YEAR? THEY'RE ALL THE SAME."

Rob I have the same problem only mine is worse....DP,NC, AND UC are all brothers. Family run business are so much fun

I worked at a dealership where sales paid full retail for both parts and labor. the DP could make money on the service work, even if the car deal lost money, and his sales department lost a lot of money, partly because of the high cost of repairs, but the owner still figured he made money off service and parts.

This isn't the first time this topic has come up.
I have a somewhat naive question to ask, especially to those that work for the family.

Don't you guys talk to each other?

Consider a $100 repair to Billy's Garage or $120 if done internally.

$100 is a pure cost to Billy.
$120 is probably half cost and half store profit (to the owners).

Jazdale, I have tried to explain it to them, telling them how the bank account only says 'XXX Dealership', not 'XXX Dealership Parts Dept.', but it just falls on deaf ears. As long as his brother's dept.(sales) benefits, that's what he wants done.

Plus, the DP inherited the business, and sold a large trac of land to a national retail chain. So, as long as he and his family are bringing home the bucks, he doesn't care.

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"WHY DO YOU WANT THE MAKE, MODEL, AND YEAR? THEY'RE ALL THE SAME."