Posts Tagged ‘Brazelton’
First off, Brazelton Auto is still running strong (some clients thought from our last newsletter that we were shutting down Brazelton Auto!!!). I will continue to spend the majority of my time over the coming months at our new dealership, South County of Sealy CDJR. Since I’m now a “seasoned vet” from the new car franchise world, I thought I’d share some observations about this side of the industry with you. I’ve been drinking out of a firehouse now for 2.5 months. A franchise dealer adds a whole new dimension to the game. It is more different than I anticipated.
First, pricing is brutal. Our strategy is to price very aggressively; to give customers a reason to drive out to Sealy. My dealer partners are located in a small town called Gilroy, CA about 40 miles south of San Jose. Despite the small population, they sell 400-500 new cars a month. They see Sealy as a Texas version of Gilroy, and are helping us to get to that volume level. The only way to attract that sort of volume is deep discounts. We price vehicles at a material loss, hoping to make up the difference on trade-ins and the back end (finance, warranties, etc). Fortunately, it seems to be working. We’ve taken a store that historically did 15-20 units and moved 82 vehicles in March making it the first month it has ever broken even.
Much like Brazelton Auto, the success of the store is primarily determined by the people. When the discussions of this store became serious, I called our long time Jeep/Ram fleet guy, Brandon Everitt. I was interested in having him join us, but our immediate need was a good general sales manager. He put me in touch with Roel “Taco” Guerra. Two weeks later Taco was my first hire. Taco brought in a whole new sales team. Brandon joined us a few weeks later. Together they add the expertise I sorely lacked, and they deserve 100% of the credit for turning up the volume.
And I call on their expertise daily. Chrysler has a ton of programs and little ways to bring money to the bottom line, from certified pre-owned programs, to demo allowances, loaner car programs, make-ready allowances, volume bonuses, etc. I’ll be learning for quite some time but lean on these guys to get me though. I’ve spent much of my time where I can add value; used cars and the service department.
All those little programs are needed. It’s obviously a very capital-intensive industry. We stock over 200 new vehicles and about 50 used. Being $10M in debt doesn’t help my sleep at night! Unlike used cars, you have to plan your new car inventory at least 60 days out. We order new vehicles not knowing what the market or rebates will be when the cars finally arrive.
Operationally there are some similarities and differences from Brazelton Auto. We use fixed pricing on new cars (can’t go any lower), but we do some haggling on used vehicles. We stress straightforward dealings though, without the manipulation and games most dealers play. We’re trying to build our reputation while we build profitability. Like Brazelton, our people will be the core of our business. Hire the best and take good care of them, so they take care of the customers.
We have a long way to go, but I’m very happy with the progress we’ve made so far. I’m still working 12+ hours a day but can breathe a bit during the day. I look forward to the day when my time is more evenly split between the two stores, but it’s exciting the see things improve out here daily.
Everyone has their gift. I consider myself somewhat of an expert at both getting stuck and getting unstuck. “If I had a dollar for every time ….”. Now a lot of times getting unstuck takes a lot of work; but a lot of times it doesn’t. Here are some low effort hints that could get you out of a jam without too much sweat;
- Rule #1 – when stuck in a hole, stop digging! If you’re tire is spinning and you’re not moving, you’re just digging a rut and making the situation worse. This is common sense can apply to so many aspects of life, but it’s regularly ignored!
- Point your front tires straight – If you have a two wheel drive vehicle and your front wheels are turned at all, you’re increasing the resistance for your back wheels to get you moving. Even if you have a four wheel drive, it’s better for all the wheels to be pulling in the same direction than battling each other. Once you’re moving, then turn.
- Rock it – Quickly shift from drive to reverse and back to get a rocking motion going. The momentum may lift you out of the rut. But remember, as soon as you stop moving, refer to Rule #1!
- Partially depress your parking brake – Most vehicles have what’s called an open differential in their axle (sports cars and trucks/SUVs with a tow package are the exception). An open differential means that power from the engine is sent through the path of least resistance. If one back wheel is on ice and the other on pavement, the ice has less resistance so that wheel will spin, and the vehicle does not move. Push your parking brake about half way down (can’t do this if you have an electronic parking brake). That will engage the brakes on both sides of the axle, but not enough to fully stop them. Now the resistance is equal. Both the tire on the ice and the one on pavement will get power, and the vehicle will move.
- Deflate your tires – this can roughly double the “contact patch” between your tire and the ground. Think of a basketball sitting on the court as it deflates. Drop your air pressure into the mid-upper teens, or if you don’t have an air gauge, to where your sidewall is about half its normal height. This works well on all surfaces, but particularly on sand. It does not work as well if you have low-profile tires.
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Last week a customer came in with his driver’s seat not working. We checked the problem and found a seat motor not working. Upon further inspection we found water damage from the Harvey flood. This car had less than one inch of water on the rear seat floor board. The large amount of moisture in the air damaged the electric motor. So one gallon or so of water did thousands of dollars in damage one year later! As we were taking the seat apart I noticed how much stuff you are sitting on. Four electric motors, air bag on the left side, seat heater, seat cooler, wires from top to bottom, seat switch to move the seat where you want it, a computer to operate the comfort system and remember what settings you like. To think when I started all you had a lever that moved the seat forward and backward.