Pub. 16 2017-2018 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 7 20 new jersey auto retailer I t has been a hectic period in fixed operations over the past decade. Just think— the first iPhone was released ten years ago and now they are linked to and part of every new vehicle. The pace of technology and its appearance in vehicles is making the vehicles dealers sell more like consumer electronics than a mode of transportation. But in the face of all the new gizmos, cars and trucks are still mechanical beasts that break down, needmaintenance, and require parts to make repairs. When looking at trends in fixed operations, it is actually the Parts Department that is leading the way into what the future holds. The past several years have seen manufac- turers work on perfecting stocking guides and improving automatic replenishment of dealership inventories. Better logistics, im- proved demand analysis, careful selection of strategic warehouse locations and more common vehicle systems moving forward will allow even more efficient control of inventory. Dealer-to-dealer transactions, through the manufacturers’ parts locators, will also improve movement between deal- er inventories. Like most aspects of dealership operations, the manufacturers will seek to control more of the process. The logistics are there for dealerships to turn their parts inventory every month, and some of you do that (and more), but manufacturer demands for dealers to keep more breadth in their man- aged part numbers will keep inventory turns in check. They will continue to see dealership’s Parts Departments as an exten- sion of their own distribution channel and want more control of dealership’s inventory with guaranteed buybacks, and increased stocking requirements. New Jersey is fortunate in its size and infrastructure. With centrally-located warehouses, you can transport a part within two hours to nearly every corner of our State. Looking into a possible future for parts distribution, driverless transport options, or even drone delivery, might make the cost low enough that same-day or even same-hour delivery is possible. Getting a part is becoming more simple, but making a profit from selling it is not. Not only are dealerships competing against each other, some manufacturers have their own parts distribution arms selling online at below dealer cost. Where we are seeing improvement in parts gross is with com- plex, low volume, non-maintenance parts. The lack of aftermarket competition on many specialty parts, the relative high cost of shipping with OEM/dealership Internet How Fixed Ops Is Racing Into The Future BY ROB CAMPBELL