When Chris Klbecka was a service writer years ago, he referred customers ot Jiffy Lube for oil changes because his car dealership's repair shop was overwhelmed with more complicated jobs.
But as fixed-operations director for Cherokee Ford in Woodstock, Ga., Mr. Klbecka now competes head-on with Jiffy Lube. The car dealership opened a stand-alone fast-lube shop on its site.
Cherokee Ford's total service and parts revenues have jumped to an average $369,000 a month, compared with $245,000 four years ago when it opened the shop.
Cherokee Ford is one of a growing number of auto dealerships that have plunged into the quick-service business to combat a reputation for inconvenience. Some are dedicating bays for oil changes; others erect a separate building to handle maintenance and light repairs.
The practice helps dealers recover business lost to fast-lube chains and independents. Some dealers are seeing as much as a 50 percent increase in nonwarranty business.
Nationally, according to the National Automobile Dealers Association, dealership sales of service and parts to retail customers have grown 31 percent between 1998 and 2001, to $34.1 billion from $26.5 billion.
What it takes
A dedicated quick-service operation makes sense for any shop with a dozen technicians or more, said Lloyd Schiller, president of Dealer Service Corp., a Clemmons, N.C., consulting business specializing in dealerships' fixed operations. The operation should be open six days a week, with convenient weekday hours such as 7 a.m. to 7 p.m.
Car dealers generally invest $200,000 to $500,000 on a separate area, but the investment is minimal if they just dedicate bays to quick service, Mr. Schiller said.
``I just bought three signs,'' said Bill Stahl, president of Stahl Motor Co., who has three quick-service bays that handle jobs of two hours or less at his Mercedes-Benz dealership in Monterey, Calif. The one journeyman and two entry-level technicians who work in the bays already were on staff.
Mr. Schiller said using entry-level technicians on quick-service jobs makes more financial sense, and the quick-service technicians also can perform inspections and refer bigger jobs to the main service department.
These inspections helped double gross profits in the back shop for Ivan Gandrud Chevrolet in Green Bay, Wis.
Since the dealership set up a quick-lube operation three years ago, gross service shop profits increased to $250,000 from $125,000 annually. Average flat-rate hours per work order jumped from 1.3 to 2.5, said Service Manager Larry Zimmerman.
The quick-service concept is so successful, auto makers such as Ford Motor Co. and General Motors Corp. have developed programs for dealers. GM began promoting its on-site Goodwrench Quick Lube Plus to dealers in January. Eight are in operation, and 18 more are under construction.
Ford Customer Service Division began its Quick Lane on-site lube program in 1999. Now 130 Quick Lanes are open, with 60 more planned by year-end.
Scott Eldridge, Ford Customer Service Division's alternative service manager, said: ``We are trying to reflect what the aftermarket provides.''
Editor's note: A special section on non-tire franchise opportunities, published in the June 10 issue of Tire Business, included articles on how some tire dealerships are using quick-lube operations to boost their profitability.