Access Velocity Day 1: A Game of Inches and Investments

I heard the same thing time and time again from dealers at Access: Velocity.

After all the effort, energy, money and time invested in retailing new and used vehicles, there just isn’t as much profit left on the monthly income statement as there used to be.

The proceeds from all the activity and sales amount to “profit dust” these days compared to the returns dealers once derived from their dealerships.

This reality emerged in our Access: Velocity workshops that addressed how dealers could sharpen their operational processes to reduce inefficiencies and drive more sales, and profitability, from their new/used vehicle departments and wholesale acquisition efforts.

But here’s the thing: When you take a collective look at the best practices and ideas shared in the workshops, they amount to a lot of small, incremental steps on the road to performance and profit improvement.

That’s because today’s car business is really a game of inches, where it’s imperative that dealers pay greater attention to the data and details of their businesses to be successful. The business calls for a higher level of operational discipline that, quite frankly, puts the very nature of many dealers, particularly those who came up through sales departments, to the test.

The good news is that most dealers here realize, or at least recognize, the need for seeking out every advantage they can. They understand that technology and tools will play a role. They know, or at least sense, that what guest speaker Jason Stein, publisher of Automotive News described as the “digitization” of dealerships is quickly gaining steam.

This backdrop probably accounted for a lot of the enthusiasm from dealers around vAuto’s latest innovation, which we discussed in the opening general session.

Beta test dealers shared how the innovation helps them instantly identify a vehicle’s investment value and use the insight to drive appraising and pricing decisions.

One dealer reported a $300 lift in front-end gross profit as managers worked to maximize gross on vehicles that deserve it, and minimize time in inventory for their more troubled investments. This is good news at a time of unprecedented margin compression.

We closed the day at a Chicago icon, Lou Malnati’s, where some of the conversations were deeper than the pizza.

It was a fitting end to a nearly perfect, and highly productive day at Access: Velocity.

More to come from Day 2….