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Service Executive Issue #07-13 (Full)

ASA Comes Forward With Allegation Of Internal Theft

The Automotive Service Association (ASA) on May 8 revealed that an undisclosed employee has been fired for stealing. Neither the nature of the supposed theft nor the identity of the now-former worker have been made public. ASA says that it has contacted the authorities and that action is being taken to hold that person accountable for the alleged crimes.

ASA further disclosed that, following discovery of the supposed theft, two executives have stepped down. Again, the association has not disclosed the names of these executives nor the rationale for their exits.

“The ASA board of directors realizes there may be some unanswered questions,” reads a statement from the association. “ASA has been advised by its attorney, as well as the authorities, not to provide further details due to the pending investigation.”

In regard to the theft, ASA reports that the association was insured. “Thankfully, our insurance partners expedited the process, and ASA recuperated a portion of its loss,” the statement reads. “In addition, proper measures have been taken to prevent any further such activity.

ASA emphasizes that the NACE and CARS events, which are produced for the association by Hanley Wood Exhibitions, were not compromised. ASA assures that those events and any related income are handled directly by Hanley Wood and are separate from the association’s finances.

The association’s statement also asserts that the recent “announcements specific to the board’s vision and the hiring of an interim executive director support the board’s resolve to usher in a new era at ASA.”

* Editor’s Note: This story originally appeared in our sister publication, The Greensheet.

 

Monro Reports That Comps Have Turned Positive

While management is not pleased with Monro Muffler Brake’s fiscal fourth quarter results, they are optimistic that business is strengthening with comparable-store sales trends improving in February and March after a tough start to the quarter and with April and May comps going positive.

Sales increased 14.1 percent to $195.91 million in the quarter ended March 30, 2013, which included one less week of sales than in the previous year. The sales growth for the quarter of $24.17 million came from a $43.50-million increase in sales from new stores. Comparable-store sales fell 11.4 percent.

Adjusted for days, comparable-store sales decreased 5.6 percent, which was slightly better than management’s guidance calling for comps to fall between 9 percent and 6 percent.

Adjusted for days, maintenance services comps were flat. Comps declined 6 percent for tires, alignments and exhaust; 7 percent for front end and shocks; and 11 percent for brakes. Management reports that consumers still deferred purchases and traded down from higher-cost maintenance and repair work during the quarter.

Sales started off rough in January, attributable to unusual weather conditions and deferrals. Comps were down 13 percent, adjusted for days. As weather normalized after January, comps improved. February comps were down 0.7 percent, and March comps were down 3.7 percent — both adjusted for days.

Comps turned positive in the first quarter of fiscal 2014, running up 3 percent through mid-May.

Monro’s gross profit rose 6.1 percent to $70.57 million in the fourth quarter of fiscal 2013. However, gross margin fell from 38.7 percent a year ago to 36 percent. Management attributed the decrease to a sales mix shift to the lower-margin tire category.

Net income dropped 22.6 percent to $8.13 million.

John Van Heel, president and CEO, said on a May 21 conference call that management is focused on increasing Monro’s market share through comparable-store sales growth, opening additional new stores in existing markets and acquiring competitors at attractive valuations. “While we expect that the consumer will remain cautious, we’re optimistic about the near-term based on the recent trends we are seeing in our business and easier comparisons ahead,” Van Heel told analysts on the call. “This gives us confidence in our ability to deliver comparable-store sales increases in the first quarter and for the full fiscal 2014.”

Management expects fiscal 2014 sales to come in between $840 million and $865 million, which would be up from the $732 million in sales Monro reported in fiscal 2013. Comps are expected to increase between 2.5 percent and 4.5 percent for the year.

Guidance calls for comps to increase between 3 percent and 4 percent in the first quarter of fiscal 2014. They were down 7.2 percent in fiscal 2013 first quarter. Management anticipates total sales for the quarter to range from $208 million to $212 million.

Van Heel said that management expects trends in April and May to set the tone for consumer behavior patterns through October. They are optimistic that the first quarter of 2013 may represent an end to what has been an extended deferral cycle.

“At the end of the day, people need what we sell and can only defer purchases of our products and services for so long,” Van Heel said on the call. “The extended deferral cycle we’ve been seeing seems to be reversing somewhat, and our loyal customers are turning to us for their needed purchases.”

The company added 23 locations (21 from recent acquisitions) and closed four during the quarter, ending fiscal 2013 with 937 stores.

Speaking of acquisitions, management continues to see attractive deals in the marketplace and plans to pursue these transactions in a disciplined manner.

Van Heel told analysts on the call that Monro continues to see more opportunities for attractive deals than it has in the past several years because of near-term seller concerns over the operating environment as well as taxes and healthcare, and because all of independent tire dealers Monro is looking to acquire are getting older and many are at or nearing retirement age without an internal succession option.

“We presently have eight [non-disclosure agreements] signed with store chains ranging in size from five to 40 locations. Six of these are within our footprint, and two are in contiguous markets,” he said. “Based upon these discussions, we expect to close on at least one of these opportunities early in the second quarter of fiscal 2014.

“We have plenty of liquidity, combined with strong cash flow, to complete these deals and remain very disciplined on the prices we will pay with 7 to 7.5 times EBITDA (or about 80 percent of sales) being our key metric. Importantly, we continued to compete only with the sellers’ expectations in these deals.”                        — Marc Vincent

 

ATMC Members Rolling Out Training Webinars In Partnership With ASE

Members of the Automotive Training Managers Council (ATMC) expect to begin offering at least one service training webinar a month, starting this summer. Members of the ATMC teamed up with ASE to produce the webinars, which will cover a variety of topics of interest to the vehicle repair and service community.

The idea took root from ASE webinars that tackled general ASE test-taking tips, said David Milne, ATMC president and an executive director in charge of special test development for ASE. “Those were very well received and people started to ask why ASE couldn’t organize some help to prepare for the actual content of ASE tests,” Milne said. “One of the biggest concerns for ASE is those people who can’t pass the tests because they don’t have adequate training. So, we were definitely interested.”

As the testers, however, ASE felt that offering the webinars themselves would present a conflict of interest, so they set up the platform and asked ATMC members to conduct the actual training.

The organizations held a pilot webinar in early April covering: The Loss of Tension in the Accessory Belt Drive System. More than 960 people signed up and about 400 tuned in. Those who watched live could interact in real-time by submitting questions. The session was later posted online by ASE for access any time.

Bobby Bassett, an ATMC member and North American training manager for Gates Corp., conducted the training. He shot the 45-minute webinar from his home office in Denver. “It was extremely beneficial,” Bassett said. “Webinars are high impact and low cost.”

The goal for the webinars is to be informational, not promotional, he said. Presenters can use backdrops or shirts with their company logos, for example, but they’ll be discouraged from marketing specific products. “All we really should be teaching is cause and effect, where things fail and how to fix them,” Bassett said.

Future webinars topics will likely cover elements of ASE’s nine automotive test areas—from engine repair to brakes, steering and transmissions—as well as service consultant credentials, parts department issues, and more, Milne said.

“So many people who can’t get the time off for training or don’t want to travel for training should really find this helpful,” he said.

Initially, the group plans to offer one webinar a month. Next year, that number may increase to twice a month. The webinars are free for anyone with a myASE account. The dates and topics of future webinars will be distributed via ASE’s news updates.                  — Sarah Hollander

 

Snap-on Buys Challenger Lifts For $38 Million

Snap-on Inc. has acquired Challenger Lifts Inc. for roughly $38 million in cash. Challenger — with 2012 sales of approximately $45 million — designs, manufactures, and distributes vehicle lifts and accessories to the auto repair sector. Challenger is now a part of Snap-on’s Repair Systems & Information Group.

“The Challenger vehicle lift product line complements and increases Snap-on’s existing undercar equipment offering, broadening our established capabilities in serving vehicle repair facilities,” said Nick Pinchuk, Snap-on chairman and CEO, in a statement. “We believe this acquisition will further Snap-on’s progress along its strategic and coherent growth runway of expanding with repair shop owners and managers.”

According to the May 16 issue of PitchBook News, it was Gen Cap America that sold Challenger to Snap-on. Gen Cap, a private investment firm headquartered in Nashville, acquired Challenger in 2010 via a management buyout of the retiring owner. PitchBook News reports that Brookwood Associates was Challenger’s exclusive financial advisor in the Snap-on transaction.

Editor’s Note: This is an update to a story that originally appeared in our sister publication, The Greensheet.

 

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Speedemissions Revising Its Business Model

In the face of recurring net losses that have caused an accumulated deficit exceeding $20 million, Speedemissions Inc. is branching out into the wider service market.

The Atlanta-based vehicle emissions testing and safety inspections company in May announced a new business model, called SpeedEmissions Car Care Stores, that’s focused on being a provider of basic automotive services and products. The idea is to use its emission customer base as a foundation to provide an array of basic services and products to its customers, including tune-ups, brake repair and air-conditioning work.

Management also wants to more rapidly expand its presence throughout the 22 states where decentralized vehicle emission testing is mandated by the U.S. EPA. The company currently does business in the Atlanta, Houston, St. Louis and Salt Lake City markets.

For some time now, Speedemissions has been working on new initiatives to combat increased competition in the emissions-testing and inspection business following new laws in some of its markets. This includes the summer 2012 launch of a franchising program and the debut of a pilot repair program in the fall.

The company also has stepped up the sale of products such as windshield wipers and light bulbs.

As we previously stated, Speedemissions has experienced recurring net losses that have caused an accumulated deficit exceeding $20 million as of March 31, 2013. Additionally, the company had a working capital deficit of nearly $1.52 million on March 31, 2013 — up from a working capital deficit of $1.30 million at year-end 2012.

Revenue from 2012 and the first three months of 2013 have been insufficient to attain profitable operations and to provide adequate levels of cash flow from operations.

According to a filing with the SEC, the company’s near-term liquidity and ability to continue as a going concern is dependent on its ability to generate sufficient revenue from store operations to provide sufficient cash flow from operations to pay its current level of operating expenses, to provide for inventory purchases, and to reduce past-due amounts owed to vendors and service providers.

“No assurances can be given that the company will be able to achieve sufficient levels of revenues in the near-term to provide adequate levels of cash flow from operations,” states Speedemissions’ May 14 filing with the SEC. “As a result of the company’s history of losses and financial condition, there is substantial doubt about the ability of the company to continue as a going concern.”

Hence the new business model. But, before we can understand the new model, we must first focus on the old one.

Over the past 12 years, Speedemissions has honed its “test only” model for emission testing and safety inspections. During this time, the primary focus was to perform the vehicle inspection and not up-sell customers on other automotive products and services. However, management now believes that remaking the company into more of a complete auto service provider will allow it to grow its business and to potentially move into new markets and to accelerate franchise sales.

Rich Parlontieri, president and CEO, said management has been studying this modification of Speedemissions’ business model for some time.

“In an industry where the American consumer is now holding a car for 11-plus years and where nearly 86 percent of light automotive vehicles are outside the manufacturers’ warranty, we believe offering a number of different automotive services to our customers is a logical move for us to make — now and for the long term,” Parlontieri explained. “We believe this transition to emission repair, tune-up, brake repair, air-conditioning, diagnostics, and other automotive services and products will hopefully result in a higher per-customer ticket average, thereby increasing both revenue and income.”

Parlontieri added that a move to remodel four to six of the company’s current stores and build new stores will enhance the growth of the SpeedEmissions Car Care franchise unit.

As of March 31, the company operated 41 vehicle emissions testing and safety inspection stations under the trade names Speedemissions and Auto Emissions Express (Atlanta, Georgia and St. Louis), Mr. Sticker (Houston) and Just Emissions (Salt Lake City). The company also operate four mobile testing units in the Atlanta area that service automotive dealerships and local government agencies.

Speedemissions’ revenues for the first quarter of 2013 — as well as the 2012 fiscal year — were below management’s expectations and internal forecasts, primarily as a result of fewer vehicle emissions tests and safety inspections being performed at its stores.

Revenue decreased $31,992 (or 1.7 percent) to $1.89 million for the quarter ended March 31, 2013, primarily because of a 5.7-percent drop in same-store revenue that was tied to a promotional discount program. This was mitigated by revenue from five stores acquired in November 2012, less the revenue lost from two stores closed in December 2012.

Speedemissions’ first-quarter net loss widened from $116,782 to $270,772 year-over-year because of sales discounts, increases in store operations and interest expense.

Speaking about the first-quarter 2013 results, Parlontieri said: “As we reviewed our Q1 operations, there were several encouraging signs that the business has stabilized with increases in customers in our Atlanta and St. Louis stores. It appears the number of new competitors has leveled off. We have continued to effectively reduce expenses without impeding our 95-percent customer satisfaction rating.”

 

Fleet Car Maintenance Costs Rose 7% In 2012

Overall fleet car maintenance costs increased by 7 percent in 2012, according to research from GE Capital Fleet Services. The study is based on a survey of actual maintenance expenses incurred by more than 32,000 passenger cars from Jan. 1 to Dec. 31, 2012. Research shows that, while monthly preventive maintenance expenses rose 4 percent in 2012, a younger fleet age helped to offset increased parts and labor costs.

Overall, average car maintenance costs rose from $49.20 to $52.66 per vehicle per month. Key factors in that influenced maintenance costs include …
• Increased preventive maintenance expense: Costs for oil changes increased by $5 from the previous year. However, oil change frequency decreased from 7,752 miles to 8,850 miles, lessening the total impact of the cost increase.
• Increased average tire expense: The cost per tire increased by 8 percent, while replacement tire costs increased by 15 percent because of higher manufacturing costs, larger rim diameters and limited availability in the retail market.
• Improvement in overall vehicle quality: Overall vehicle quality continued to improve across the industry in 2012, resulting in longer-lasting parts and less-frequent maintenance requirements.

“While we expect passenger car maintenance expenses to rise slightly in 2013, improvements in vehicle quality will present opportunities for fleet maintenance savings in years ahead,” said Eric Strom, maintenance and safety product manager for GE Capital Fleet Services.

GE Capital Fleet Services of Eden Prairie, MN is a global fleet management company with operations in the United States, Canada, Mexico, Europe, Japan, Australia and New Zealand.

 

Hickok Sees Benefits From October Order In Q2

Hickok Inc. saw its net sales spike 66.7 percent to $1.96 million in the fiscal second quarter ended March 31, 2013. Earnings went from a loss of $224,781 a year ago to $119,431 in net income as the Cleveland-based company benefited from the completion of a significant OEM order received in October 2012.

Robert Bauman, president and CEO, said the higher sales volume not only had a positive effect on the second quarter operating results but also on the morale of Hickok’s employees. “The product strategy we have been implementing for the past year is working and growing revenue in our target markets,” Bauman explained. “We are hopeful improvement will continue during the remainder of the fiscal year.”

 

Mudlick Mail Forms Partnership With Kukui

San Jose, CA-based Kukui Corp., a provider of marketing software for the auto repair industry, has formed a partnership with direct-mail specialist Mudlick Mail. Kukui’s platform provides shop owners with insight into how much business their marketing channels are generating. The company’s products include smart web pages that are optimized to boost conversion rates; a content management system that is integrated with a shop’s point-of-sale system, and customer retention tools such as email service reminders.

Under the agreement, Kukui will offer Mudlick Mail customers a free month of access to its platform as well as enhanced tracking to determine the return on investment of their direct-mail campaigns. Meanwhile, Mudlick will offer exclusive direct mail packaging and pricing for Kukui customers. The company also will provide free access to its learning center, which offers webinars, training videos and other resources designed to help shop owners make the most of their advertising programs.

 

ATD’s Q1 Net Loss Widens To $16.29 Million

Huntersville, NC-based American Tire Distributors Holdings (ATD) saw its net loss more than double, going from $7.08 million a year ago to $16.29 million in the first quarter of 2013. The wider net loss was due, in large part, to costs stemming from the acquisitions of Consolidated Tire & Oil (CTO) and TriCan Tire Distributors.

Selling, general and administrative (SG&A) expenses for the quarter ended March 30, 2013 came in at $136.50 million — up $17.19 million, or 14.4 percent, on a year-over-year basis. The increase came primarily from incremental costs associated with new distribution centers, as well as the acquisition of CTO and TriCan. Combined, these factors added $11.70 million in incremental costs to the first quarter of 2013.

In addition, ATD also experienced a $4.10-million increase in its vehicle and occupancy expenses related to a higher overall consumption of fuel and other vehicle-related expenses, as well as increases in occupancy costs as the company expanded several of its distribution centers. Depreciation and amortization expense added an additional $2.10 million in costs to the quarter as ATD increased its capital expenditure costs for information system technology.

Transaction expenses for the quarter ended March 30, 2013 were $1 million and were primarily related to integration costs associated with the acquisition of TriCan, as well as expenses related to potential future acquisitions and other corporate initiatives.

SG&A expenses (as a percentage of net sales) increased from 15 percent to 16.3 percent year-over-year.

Net sales rose $45.85 million, or 5.8 percent, to $839.98 million. The increase in net sales was primarily driven by the combined results of new distribution centers, as well as the acquisition of CTO and TriCan. These growth initiatives added $65 million in incremental sales in the quarter.

However, this increase was partially offset by lower net tire pricing of $6.90 million, primarily driven by manufacturer price repositioning, one less selling day in 2013 as compared to 2012, and an overall softer sales unit environment.

 

Online Attendee Registration For AAPEX Opens

Online registration for AAPEX 2013 is open for attendees at www.aapexshow.com/Register. The event will be held Nov. 5-7 at the Sands Expo Center in Las Vegas. The fee for attendee online registration is $25 through Oct. 21, and includes the AAPEX badge, which also can be used at the SEMA Show being held in Las Vegas the same week. The fee for AAPEX registration via fax or mail is $50 through Oct. 21.

 

SEMA Show Registration Is Now Open

Individuals may now register to attend the 2013 SEMA Show by visiting www.SEMAShow.com/register. The annual trade show, which is open to industry professionals in the automotive specialty equipment market, is set for Nov. 5-8 in Las Vegas.

Buyer registration is available using the “attendee” link at www.SEMAShow/com/register. Buyers registering online before the early registration deadline pay $25, and will receive their badges in the mail in advance of the show. They also will receive pre-show publications with maps, schedules of events and show updates.

Buyers who have been approved for the SEMA Show in recent years can expedite the registration process by entering the email address that they used when they registered previously. Buyers who have never been to the SEMA Show before can expedite the registration process by having proof of industry employment ready to upload. Proof of industry employment may include a business license, business card, pay stubs or similar items.

Exhibitor registration is available using the “Exhibitor” link at www.SEMAShow.com/register. Individuals will need to select their company name and have their SEMA Show password ready. A password has been provided to the key contact at each exhibiting company.

 

SEMA Show Adding Services For Collision Repair Market

The 2013 SEMA Show will include enhanced features for the collision repair and refinish market, including an expanded show floor area.

Last year’s show featured 330 exhibitors in the Collision Repair & Refinish and the Tools & Equipment areas — the two sections where many exhibitors feature products for the collision market. These exhibitors were housed in more than 88,000 square feet in the North Hall of the Las Vegas Convention Center.

For 2013, the Collision Repair & Refinish section will expand into an adjacent area of the LV Hotel, accommodating as much as 20,000 square feet of additional space.

Those in the collision market also will be able to network and expand their knowledge during a variety of industry meetings and educational events. The Collision Industry Conference (CIC), the National Auto Body Council (NABC) and the Society of Collision Repair Specialists (SCRS) are among the groups hosting meetings during the SEMA Show. A repairer education program also is presented by the SCRS.

The SEMA Show will be held Nov. 5-8.

 

ABRA Buys Precision Collision Auto Body

Minneapolis-based ABRA Auto Body & Glass has acquired 23 Precision Collision Auto Body repair centers in Washington. The deal marks the company’s entry into the Northwest region and the largest acquisition in its nearly 30-year history. The company now operates 172 repair centers across 17 states.

Greg Wright, president of Precision Collision, has joined ABRA and assumed a leadership role to help manage operations in the market as well as assist in the company’s growth in the region.

 

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AutoNation Service/Parts/Collision Gross Profit Up 8.8%

Service, parts and collision revenue rose $36.70 million, or 6.1 percent, to $636.60 million for AutoNation Inc. in the first quarter of 2013. Same-store service, parts and collision revenue increased $23.30 million, or 3.9 percent, to $632.20 million. Gross profit grew $22.10 million, or 8.8 percent, to $272.30 million.

It’s worth noting that the quarter had two fewer selling days than the year prior. So, when adjusted for days, service, parts and collision same-store revenue would have been up 7 percent and gross would have been up 10 percent.

President and Chief Operating Officer Mike Maroone said in an April conference call that AutoNation’s Customer Care business (service, parts and collision) posted solid growth across the board — in customer-pay, warranty, internal, wholesale parts and collision — for both revenue and gross. “We also recorded our highest overall Customer Care margin in nearly two years at 42.8 percent — a 110-basis-point improvement on a total store basis,” he told analysts on the call.

“In the quarter, we noted impressive year-over-year increases in warranty gross of 15 percent, internal gross of 12 percent and customer-pay gross of 4 percent. This marks the 11th consecutive quarterly increase in customer-pay gross,” Maroone added. “We are very pleased with this performance, especially given the fact that the industry units in operation are just now bottoming out and the service base will start to grow again this year. We believe that the focus by our Customer Care team on operational excellence, margin improvement, and driving sales effectiveness delivered very strong results and positions us well moving forward.”

Fort Lauderdale, FL-based AutoNation owns and operates 262 new vehicle franchises, which sell 32 new vehicle brands across 15 states. The company is billed as America’s largest automotive retailer.

 

Asbury Automotive Sees Parts & Service Revenue Rose 4.9% In Q1

The Asbury Automotive Group’s parts and service revenue rose 4.9 percent to $147.60 million in the first quarter of 2013 as units in operation are growing. Same-store parts and service revenue increased $4.90 million, or 3.5 percent, to $145.60 million.

Chief Operating Officer Mike Kearney told analysts on an April conference call that Asbury is at a point where there are a lot more cars on the road that it has been selling. “They are hitting this 18-month, to 24-month, to 36-month maintenance period, which is usually the peak maintenance period before we get into the heavy repairs,” he explained. “We are going to all benefit from that.”

Kearney went on to say that retail automotive franchise dealers gave away a large piece of the parts and service business decades ago, but they are trying to get that back. “We are putting in retention programs, wiper blades programs, tire programs to bring those customers back to us,” he told analysts on the call. “I think that we will all see the benefit of that, and I think we can continue to benefit from just having a lot more vehicles out there.”

In particular, Kearney said the tire business has been very strong for Asbury. “We’re not quit at our goal. We are very close,” he said. “We are addressing what we need to do get there.”

Parts and service gross profit increased $7.40 million, or 9.2 percent, to $87.70 million over the first three months of 2013. Gross margin for the quarter came in at 59.4 percent — up 230 basis points compared to the prior year.

The year-over-year gross profit improvement was driven by a 19-percent increase in reconditioning work, a 4-percent rise in customer pay business, 10-percent increase in warranty work and 2-percent growth in wholesale parts.

Duluth, GA-based Asbury operates 76 retail auto stores, encompassing 97 franchises for the sale and servicing of 29 different brands of automobiles.

 

Same-Store Parts & Service Revenue Up 5.4% For Group 1 In Q1

Group 1 Automotive of Houston saw its parts and service revenue rise 11.5 percent to $237.51 million in the first quarter of 2013. Parts and service gross profit increased 12.3 percent to $125.02 million. Same-store parts and service revenue increased 5.4 percent to $219.64 million.

“The overall revenue growth is explained by increases of 13.2 percent in collision, 7.8 percent in warranty, 5.9 percent in wholesale parts and 2.3 percent in customer-pay,” explained CFO John Rickel on a May 2 conference call. “It should be noted that manufacturer free maintenance programs, such as Toyota Care, have shifted what once were classified as customer-pay revenue over to the warranty line, partially explaining the relative underperformance of customer-pay growth as compared to warranty.”

Same-store parts and service gross profit rose 6.6 percent to $115.99 million.

U.S. parts and service revenue grew 5.3 percent to $216.35 million, while U.S. gross profit climbed 7.3 percent to $114.82 million.

Group 1 owns and operates 143 automotive dealerships, 182 franchises, and 36 collision centers in the United States, United Kingdom and Brazil.

 

Lithia Motors’ Customer-Pay Comps Up 5% In Q1

Lithia Motors’ service, body and parts revenue increased $6.90 million, or 8.3 percent, to $90.44 million in the first quarter of 2013, as management maintained its focus on retaining customers by offering competitively priced routine maintenance and increased marketing efforts. Same-store service, body and parts sales rose 6.5 percent to $87.75 million, despite two fewer selling days in 2013 compared to 2012.

Same-store wholesale parts increased 5 percent, while body shop sales rose 12 percent. Customer-pay work increased 5 percent, which was the 15th consecutive quarter of same-store sales improvement. Warranty sales increased more than 9 percent for the second consecutive quarter, suggesting that the number of vehicles eligible for warranty repair is growing.

Service, body and parts gross profit increased 9.1 percent to $43.78 million, while gross margin grew 40 basis points to 48.4 percent on a year-over-year basis.

Lithia sells 27 brands of new vehicles and all brands of used vehicles at 88 stores across 11 states.

 

Sonic Auto’s Parts Revenue Up 1.3% In Q1

Sonic Automotive’s parts, service and collision repair sales rose 1.4 percent to $296.64 million in the first quarter of 2013, despite two fewer selling days year-over-year. Adjusted for days, overall parts, service and collision repair revenue would have increased 4.6 percent.

Parts revenue rose 1.3 percent to $157.49 million, while service revenue increased 2.2 percent to $127.68 million. Collision repair revenue decreased 5.8 percent to $11.48 million.

Customer-pay revenue was up 1.5 percent, while customer-pay gross profit was up 1.4 percent. Warranty gross was up 4 percent, led by several recalls — a trend management does not expect to continue.

Total parts, service and collision repair gross profit rose 1 percent to $144.23 million. Adjusted for the two fewer selling days, parts, service and collision repair gross profit would have increased 4.2 percent compared to the prior year period.

Parts, service and collision repair gross margin decreased from 48.8 percent to 48.6 percent.

Charlotte-based Sonic operates 111 dealerships across 14 states, representing 25 different brands of cars and light trucks. The company also has 20 collision repair centers.

 

Penske Automotive Reports Solid Service & Parts Growth

The Penske Automotive Group (Bloomfield Hills, MI) saw its service and parts revenue increase $24.28 million (or 6.8 percent) during the first quarter of 2013, including a 9.1-percent rise in the United States and a 1.4-percent increase internationally. The increase breaks down as an $11.20-million (3.1 percent) increase in same-store revenue during the period and a $13.10-million increase from net dealership acquisitions.

The increase in same-store revenue came from a $5.80-million (2.3 percent) rise in customer-pay revenue, a $4.60-million (6.1 percent) increase in warranty revenue, a $600,000 (2.6 percent) rise in body shop revenue; and a $200,000 (3.1 percent) increase in vehicle preparation revenue.

In all, service and parts accounted for 11.3 percent of Penske’s total sales for the quarter. Roughly 70 percent of the company’s parts and service business in the quarter was customer-pay.

Service and parts gross profit increased $16.30 million (7.9 percent) to $223.90 million, while gross margin rose 60 basis points to 58.4 percent.

Penske Automotive operates 342 retail automotive franchises, representing 40 different brands, as well as 30 collision repair centers. It has 174 franchises in 18 states and Puerto Rico, in addition to 168 franchises located outside the United States, primarily in the United Kingdom.

 

Hyundai Now Providing 3 Years Of Free Connected Care Service

All new Blue Link-equipped Hyundai vehicles now include three years of complimentary Assurance Connected Care Service. Assurance Connected Care is a package of safety and car care features providing Hyundai owners with a range of free services, including automatic collision notification, enhanced roadside assistance, monthly vehicle diagnostics reports and maintenance alerts.

The service is fully transferable to subsequent owners within three years of the vehicle’s date of first use. Powered by the Blue Link telematics platform, Assurance Connected Care now boasts more than 400,000 subscribers.

 

Alldata Allies With Used Vehicle Dealer Group

Alldata is now a national member benefit participant of the National Independent Automobile Dealers Association (NIADA). Through this program, Alldata is able to offer NIADA members special pricing and additional access to its flagship information product, Alldata Repair, as well as technical training through its Training Garage service.

NIADA represents the used motor vehicle industry.

Kevin Culmo, Alldata group vice president, said Alldata already services more than 3,000 independent dealers throughout the United States.

 

NASTF Elects New Board Members

AASA president Bill Long and Bill Moss, owner of Euro Service Automotive (Warrenton, VA), have been elected to the NASTF board of directors. Additionally, Steve Douglas, environmental affairs director for the Alliance of Automobile Manufacturers, has been elected to the board officer position treasurer/secretary.

Long steps in at NASTF as the AASA/MEMA representative, as Steve Handschuh, a long-time NASTF board member, was promoted at MEMA and unable to continue his NASTF responsibilities. Handschuh has served as NASTF treasurer/secretary, which generated the vacancy filled by Douglas, who is an existing member of the NASTF board.

Moss was nominated by the ASA board to represent the association on the NASTF board of directors following the departure of Ron Pyle. Moss is the mechanical division director at ASA in addition to his primary role as owner of a four-bay European vehicle specialty shop in suburban Washington, DC.

 

People Watching 5/29/13

John Nielsen is now the managing director of automotive engineering and repair for AAA National. Nielsen previously served as director of automotive engineering and repair for AAA. He is a former technical services manager at Cooper Automotive and a technical service engineer for Champion Spark Plug.

Bill Sauer, the founder of Roseville, MN-based Identifix, was honored with a Lifetime Service Award by the Alliance of Automotive Service Providers, Minnesota (AASP-MN) at its annual meeting and convention last month. Now semi-retired, Sauer serves on the organization’s education and training committee and is also a member of ASA and the Automotive Training Managers Council (ATMC).

 

News Briefs 5/29/13

• The Equipment & Tool Institute (ETI) has released two new Market Research Studies for purchase: one on information access and one on flash reprogramming. They are available at www.etools.org/ETIMarketResearch.

Standard Motor Products has released a new Tech Session video on its TechSmart line of park assist sensors. To view, visit youtube.com/TechSmartParts or facebook.com/TechSmartParts.

Branick Industries’ Smart-O Drain Plug is being rolled out to more than 2,400 Walmart Tire & Lube Express locations nationwide. The product employs an o-ring that expands upon contact with engine oil to reduce the risk of oil leakage through the threads.

BendPak-Ranger has launched a Spanish-language version of its website.

• Weston, FL-based Tint World has launched a mobile version of its website. Smartphone users are automatically directed to the mobile site when they visit TintWorld.com.

• Heavy-duty vehicle lift maker Stertil-Koni plans to launch a distributor forum where distributors, sales team members, techs, and staffers can collaborate and exchange ideas on a real-time basis.

 

Event & Trade Show Briefs 5/29/13

• Registration is still available for the Equipment & Tool Institute’s Summer Tech Week to be held June 10-13 in Troy, MI. Click here for more information.

Registration is now open for the ASA-Arizona’s Sunrise 2013 Automotive Training Expo & Convention to be held July 19-21 in Prescott, AZ. This event is open to members and non-members. The registration deadline is July 12.

 

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