OVERLAND PARK, Kan. -

NCM Associates recently described how much the Fred Beans Family of Dealerships has significantly improved used-vehicle sales after employing strategies learned in an NCM Institute training program.

In fact, one dealership in the group — McCafferty Ford and Kia — more than doubled pre-owned sales after implementing new processes as a result of the NCM Institute training session.

Officials explained the entire improvement process began about 18 months ago by placing a strong emphasis on improving pre-owned vehicles sales performance and profitability. When progress was measured across all stores in April, NCM indicated the group saw some big jumps in its metrics.

These following results are averages measured from all stores’ performance:

—Used-vehicle retail unit sales were up 30.4 percent.
—Used-vehicle operating gross was up 35.4 percent.
—Used-vehicle operating gross/retail unit was up 3.81 percent.
—Used-vehicle controllable net profit was up 41.5 percent.

Results varied across the group, but NCM Associates emphasized that all of the 19 locations and 16 different franchises covering both the Fred Beans and McCafferty brands in eastern Pennsylvania saw improvement in their numbers.

Gerald Turner, general manager of McCafferty Ford and Kia in Mechanicsburg, Pa., recollected that about 18 months ago the store’s used sales were stagnant and efforts to move up the volume had little success. As a result, store personnel went through training during the spring of 2010.

“Too often we were conservative in our approach to the inventory we maintained,” Turner shared.

“We started to push the envelope on the types of cars we bought for our locations and told our buyer to acquire 30 to 40 units a month for us,” Turner continued. “We were averaging about 40 pre-owned sales per month in early 2010. And after implementing the NCMi program, we hit 90 units in July and 100 units in August of that year.

“So far YTD for 2011, we are averaging over 60 units a month and hit 68 in March. That’s a 50-percent increase over where we were a year ago,” he added.

Chris Gilbert, group director of variable operations for Fred Beans Automotive Group, indicated that the NCMi training and guidance pushed some stores out of their comfort zones when it came to buying pre-owned inventory. 

“We saw stores getting more creative on not only the types of inventory they stocked, but on the sources they used to acquire that inventory,” Gilbert mentioned.

“With used vehicles in more demand we needed to explore options we didn’t consider previously, and that has really helped us boost our pre-owned sales numbers,” Gilbert acknowledged.

“One valuable process implemented was the Trade-Walk/Stock-Walk, whereby each dealership general manager conducts a daily vehicle analysis of the inventory with the sales team.” Gilbert went on to say. “This helps identify desirable inventory versus a unit that is better off being wholesaled.”

NCM also mentioned Fred Beans dealerships also implemented a hard-turn policy on their inventory based on benchmarks that showed the best operators had 70 percent of their pre-owned inventory in stock for less than 30 days.

Company trainers stressed that as the vehicles age they depreciate. So the new Fred Beans policy turned inventory once it reached 60 days in stock, but that didn’t always mean wholesale and take the loss.

“Before the units go to auction, they work to keep the inventory in the family,” NCM emphasized.

So how did the group accomplish this task?

NCM shared that every other Monday store managers conduct a “trade desk” session where stores post their unwanted and aged inventory for sister stores to view and buy. The bidding on those units starts at Manheim Average Money and goes up from there.

Each week, 50 or 60 units hit the trade desk, and the group discovered usually 50 percent of those units were acquired by the participating dealerships.

“This provides a valuable resource to fill gaps in inventory,” NCM insisted. “Overall, the increased sales and profits from these units benefit the dealer group.”
Mark Donahue, general manager at Fred Beans Chevrolet in Doylestown, Pa., conceded that “You can’t sell what you don’t promote.

“One of key components we took from the NCMi training sessions was the importance of merchandising the inventory,” Donahue continued. “We looked at how they were displayed, reconditioned and detailed and implemented high level branding on all the GM Certified units. This made customers feel they were getting a great, nearly new vehicle.

“We also made sure there was gas in each vehicle and that banners were properly displayed,” he also shared. “Not only did our pre-owned sales go up, but these and other improvements to our sales process made our store No. 1 in new Chevrolet passenger car and truck volume in our area.” 

NCM believes more dealerships can enjoy the success Fred Beans has if they choose to adopt strategy taught through its training sessions.

“While each store in the Fred Beans Family of Dealerships had different priorities based on their location and franchises, they all leveraged NCM Associates resources to initiate some out-of-the-box thinking and action plans,” officials stated.

“Improving profits by 40 percent or more clearly shows a commitment to process based on sound strategic advice,” they concluded.