Dealership Newsmaker Q&A: Ronnie Morton

Jan. 1, 2020
Ronnie Morton is a consultant for Bob Pearson Enterprises.

Consultant for Bob Pearson Enterprises speaks out

Ronnie Morton

Ronnie Morton is a consultant with Bob Pearson Enterprises.

Bob Pearson Enterprises

www.automotiveconsultingfirm.com

Ronnie Morton is a parts department consultant with Bob Pearson Enterprises, an automotive dealership consulting firm. He has more than 40 years experience in the auto industry, and spent ten years working as a parts manager himself.

What's the biggest challenge faced by dealership parts departments today?

The biggest problem we've got is the economy. Dealerships have been in a downturn for the past 18 months. It has really gotten bad this year, and now it's getting even worse. Normally during a downturn your new car sales are down, but you have people who are repairing their cars and that helps carry the front end of the dealership. But we're not seeing that this time. It seems like people are postponing repairs. I don't know where it's going to lead. We're probably going to lose a lot of dealerships.

Right now what dealers need to be concentrating on, of course, is their inventory, which is going to be a problem for them. If sales are down, the non-selling part numbers are going to increase. You won't have as much return reserve and you won't have the ability to get rid of this inventory.

How should parts managers address their excess inventory?

What I would be telling the dealer is to try to make sure the phase-in/phase-out criteria in their inventory management system is working in the best way possible. Do an analysis on the inventory. How many part numbers do you actually need, and how many part numbers have you got? Come up with a plan to eliminate parts that are not selling.

The main thing in all of this is special orders. If we don't control special orders, we're never going to get the inventories clean.

How do you get special orders under control?

The parts and service departments have to work together. There has to be cooperation between the two. The counter man has to make sure he gets all the information from the technician—VIN numbers, paint codes, whatever, so he can order the right parts the first time. Then the technician has to make sure he diagnoses the problem and gets the part that he needs, not something else.

The service advisor has to be responsible for making sure the customer is contacted and for getting them back in the shop. If he can't get them back in, the parts manager has to take advantage of any program to return those parts.

But there has to be cooperation between the two of them. That's one thing we've always had problems with is getting parts and service managers working together.

Another thing that we need to do, now that we're going through these bad times, is that we need to calculate the cost to break even. You need to know what your expenses are, and you need to go through your pricing policies to make sure they are adequate to cover expenses. It's getting tight out there now.

What sort of strategies are your clients using to increase business?

Parts and service managers should to be advertising together. Right now they could be doing winter specials, and then once you get the customer in the shop, try to upsell. If they bring a car in for winterization, have someone go over the car and make recommendations on what you can upsell from that. Do a lot of upselling in general. We don't have a lot of customer pay business anymore. That's been a trend for several years now with all the extended warranties and everything else we've got out there.

It's going to be a challenging year because of the economy. Only the strong dealers are going to survive. There are some dealers out there with a strong parts department but a weak service department. I would be concerned about them this year. You need to have both to survive.

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