Dealers Hear the Logic Behind Lanelogic

By Nick Zulovich, Staff Writer
March 28, 2007

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DURHAM, N.C. — As part of lanelogic's national rollout, more than 120 dealer representatives from the Southeast gathered in Durham, N.C., in early March to meet with executives and learn how lanelogic's services can help business. Auto Remarketing was on hand at the event to talk with dealers and report on the progress of the expansion.

In fact, one of the dealers said this information training session is the first time he's left his store in more than eight years.

Dealers at the event carefully perused company material and asked a multitude of questions, trying to get a handle on exactly how lanelogic will do what it claims to help the used-car side of their business.

The premise of lanelogic's network, according to company officials, is to "redistribute vehicles from dealerships where they are not likely to sell to dealerships where they'll likely sell in less than 28 days for optimal profit."

Mike Johnson, a used-car manager for Kim Chrysler Toyota in Laurel, Miss., said he was anxious to see how the concept was going to work.

"I'm real excited about it because it isolates a certain department and asks for accountability. It puts the used car, which is the most profitable part of any dealership, in the limelight and helps the management, I believe, make better decisions about the price. It makes me accountable for this side of the business, and helps me do things right, which in turn equals better profits," Johnson said.

"At this point with this being so new and having 16 years of experience in the industry, I'm questioning the company's ability to not get too big too fast and its ability to stay simple. If we can keep it simple and uncomplicated, I think it will really help the used-car industry by leaps and bounds," Johnson added.

During the training session, Bruce Thompson, lanelogic's chief executive officer, emphasized the process. Lanelogic is urging its network dealers to undertake the correct use of the company's product. The process includes entering accurate information about a trade-in into lanelogic's online data center and trusting the informational reports that are generated daily about what is or is not selling at a particular dealership.

Thompson said he understands that some dealers are apprehensive about handing over their checkbook when lanelogic ships a group of cars to a particular dealership. However, he emphasized how that stress can be alleviated due to lanelogic's 45-day buyback guarantee.

The buyback guarantee caught the attention of Rick Powell, general manager of Bob Dunn Ford Hyundai in Greensboro, N.C. "Less wholesale loss — that would be the biggest thing for my dealership. It would be a better avenue to get cars that we're not sure someone will want but could prove profitable if given the chance. It lessens the risk to us since there's a guarantee the company will buy it back if our customers don't like it," Powell said.

A Bit of History about Lanelogic

Lanelogic began its operations about a year ago, starting close to its hub near Dallas. Thompson said the first groups of dealers to sign up were based in Texas and Oklahoma shortly after the company's introduction into the marketplace. The company then moved into the Midwest, expanding slowly to make sure all the "kinks" in the process were hammered out.

"Those first two districts, I think we really learned. We can now kick these guys off with the right process. We anticipate the volume to really jump. We've stepped up business considerably to handle it," Thompson explained.

"It's difficult to get started in the beginning, but once you do, it starts snowballing. It gets larger and larger, and I think that's what we're becoming. We kind of waited on purpose to make sure we had all of our structure down, including logistics and personnel. When you do something brand new, you're going to have issues. So let's fix them before we move forward was our thinking," he continued.

The company said it is now is moving forward into an area of the country executives see as vital to the continued success of lanelogic — the Southeast.

"You have a lot of big stores, a lot of the major groups (in the Southeast). I think it's also going to be good for those market disparity moves for two-wheel drives and sports cars and convertibles that our dealers in the Midwest don't do particularly well with. We can move those models right down here to the Southeast. And then vice versa, the four-wheel drives that down here don't sell real well, we can move those as well," Thompson pointed out.

More from Dealers

Besides Johnson from Mississippi, other dealers traveled quite a distance to central North Carolina for lanelogic's training event. Company executives said dealers arrived from Alabama, West Virginia and Maryland to join up with the network. Thompson made it a point to say membership is limited to 30 percent of the dealerships in a single demographic market.

"For example, we only signed 84 dealers in Dallas. We're getting pretty close to that cap for that market right now," Thompson noted.

"We're encouraging dealers to join on to help us grow the network so they don't have their chief competitor having the same tool as they do. We actually have dealers giving us referrals to help us build the network. That's great. If we have them working for us, they're going to steer us toward the right stores. Dealers typically like trading with one another because they're friendly," he continued.

Other points Thompson accentuated during his presentations included how important it is for dealers to use the financial figures lanelogic provides for trade-ins and retail sales prices.

"The appraiser is one of the most important positions at a dealership. Customers won't buy when they know you haven't put enough into their trade," Thompson told attendees.

Having a better sense of what to do with trade-ins and being able to get vehicles that turn quicker all seemed to be exactly what Dwight Sullivan, the used-car manager of Stewart Nissan in Fayetteville, N.C., wants.

"It should be able to give you a wider base. I'm a firm believer in two heads are better than one. So if you can get 150, 200, 300 heads all on the same car, that should help tremendously. I can see right now how it's going to help us," Sullivan said.

"Until you put it in action and see how it works in real situations, you never know from the outside looking in," he added.

Mike Schramke, general manager of Larry Stovesand Lincoln Mercury in Nashville, Tenn., also was receptive to at least a portion of lanelogic's concept.

"I think it's a good program. For me, it would be more beneficial to dispose trade-ins rather than be supplied with them. About 80 percent of what we sell on the used-car lot are remarketed cars, rental cars, which lanelogic wouldn't be a good supplier of," Schramke explained.

"One of the things I am going to do is launch every trade-in. Theoretically, you could never get hung on a trade if you use the company's numbers unless you have to stretch to make the deal and then you're on your own. If you launch the vehicle and use lanelogic's numbers, it should be able to keep you from having old inventory," Schramke added.

Thompson was hoping the training sessions like he's done here and later in the month in New York, as well as previous ones in Dallas and Chicago, will steer participating dealers in the proper direction.

"What I don't want them to do is just go back and start launching all of their problem vehicles. If I get them to install the process, they'll start seeing the instant success," Thompson explained.

And what about an even deeper look into the future of lanelogic?

"At some point, we go to the consumer," Thompson explained.

"If you want to get a bid on your vehicle, launch it and then we'll direct those customers right to our dealerships. When we get large enough in our buying scale with enough dealers, we can go right to the consumer, and then you've got a really powerful application," he concluded.

Used Car Manager