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Service Executive Issue #10-12 (Full)

The 3-Year Vehicle Purchase Cycle Is Dead And Not Coming Back … Even If The Economy Does

A new survey of nearly 4,000 car owners by AutoMD.com proclaims that the two- to three-year vehicle purchasing cycle is dead. It backs this claim up by pointing out that three in four respondents agreed that buying a vehicle every two to three years is a thing of the past, and 78 percent indicated that 10-plus years — or until it dies — is the appropriate vehicle lifespan. Additionally, more than half said that a better economy would not change their habit of holding onto a vehicle for longer.

The survey indicates, furthermore, that the longer ownership trend is spurring consumers to seek out independent repair shops over dealership service centers.

AutoMD says its survey results confirm other industry data showing an aging vehicle fleet on U.S. roads …
• For the second year in a row, 60 percent of survey respondents said that their primary vehicle has more than 100,000 miles;
• 66 percent said they plan to drive their primary vehicle for more than 150,000 miles or until it dies; and
• More than half plan to rack up 75,000 additional miles than on their previous vehicle.

While the economy continues to be the No. 1 reason for holding on to vehicles, vigilant repair and servicing also ranked highly. “There is nothing surprising about the economy driving car owners to hold onto their vehicles for longer. Our data has been showing this trend for the past three years. But what is most compelling is that longer ownership has become an embedded habit for car owners, regardless of what the economy does,” said Brian Hafer, vice president of marketing at AutoMD. “This significant lengthening of the ownership cycle looks like it is here to stay, and it’s being supported by better-made vehicles on the road, more choices for and information online about repairing those vehicles, and a more scrupulous focus on service and maintenance.”

An Aging Fleet on the Streets … According to the survey, the primary vehicle of 60 percent of respondents has more than 100,000 miles — a number unchanged from 2011 and up in excess of 13 percent from 2010. When asked why they plan to keep their primary vehicle for more than 100,000 miles, respondents cited the economy (47 percent) and vigilance with repair and service (44 percent) as the top reasons, followed by cost savings (37 percent), DIYing (28 percent) and better built cars (19 percent).

Longer Vehicle Lifespan Not Just a Trend, But a Reality … While the economy has driven car owners to hold onto their cars for greater periods of time than ever before, the survey indicates that this is no passing trend. AutoMD says that 45 percent of those surveyed said that their viewpoint on the appropriate lifespan of a vehicle has changed in the past five years — they now view vehicle ownership as a much longer-term proposition. Three in four respondents agreed that getting a new vehicle every two to three years is the old model. The majority said the appropriate vehicle lifespan is more than triple that — nearly 80 percent consider it to now be 10-plus years (or until it dies), with 93 percent saying eight years or more.

And, of those who are more likely to hold onto their vehicle for longer, more than half said that an improving economy would not spur them to shorten the lifespan and buy a new vehicle.

Independent Repair Shops Preferred … While half of those who are holding onto their vehicles longer said it has not changed their approach to service and maintenance, 57 percent of DFMers holding on to their vehicles longer said it has indeed changed their approach, making them more scrupulous about sticking to the manufacturer’s recommended service schedule. Of those, 76 percent said they are more likely to visit an independent shop “to save money” versus the dealership.

When all DIFMers — not just those holding onto their vehicles for longer — were asked which kind of service shop they were most likely to use, 69 percent said they would likely opt for the independent repair shop over chains (8 percent) and dealerships (20 percent). DIYers, who prefer their own garages for repairs (57 percent), also preferred independent shops (33 percent) versus chains (4 percent) and dealerships (6 percent).

Of the survey respondents, about 20 percent of DIFMers and 13 percent of DIYers said they plan to purchase a new vehicle this year — with more than half saying that they are purchasing simply because they have no choice (i.e. their vehicle is at the end of its life).

 

Changes Atop Monro Muffler Brake Coming In October

Monro Muffler Brake has announced a long-planned management succession. John Van Heel, currently serving as president, will be appointed CEO effective Oct. 1. Rob Gross, the current chairman and CEO, will be appointed executive chairman of the board.

Under this new structure, Gross will continue to serve Monro on a half-time basis with a focus on strategy, acquisitions and investor relations. Gross has served as chairman of the company since 2007 and as chief executive since 1999.

Van Heel has served as president since 2008. He joined Monro in 2002 as vice president of finance and was promoted to senior vice president of store support in 2005. A little more than a year later, Van Heel was named executive vice president and chief administrative officer

As president, Van Heel has had responsibility for merchandising, marketing, customer service, real estate, training, acquisitions, distribution and facilities. And, over the past several years, he has developed the company’s operating strategy with the field management team. Van Heel also has led Monro’s acquisition efforts, including finding, analyzing, negotiating and integrating acquired companies. He also worked with Monro’s team to establish the company’s direct import program and had a hand in moving Monro’s advertising to a more Internet-based approach.

“We have been planning this transition internally for some time and are confident that it will be seamless,” Gross said. “John and I have worked together closely for nearly 10 years, and he has been instrumental in helping to build the Monro business over the years. We are aligned on the company’s business strategies and objectives, and share a common vision for the future of Monro.”

 

Monro Muffler Brake’s Comps Fell 7.2%

Monro Muffler Brake saw its net income fall 24.6 percent to $169.18 million in the first quarter of fiscal 2013 (the three-month period ended June 30, 2012). Gross margin decreased from 43 percent to 40.3 percent year-over-year because of increased tire and oil costs, a sales mix shift to lower-margin tire and service categories, and a loss of leverage because of weaker comparable-store sales.

Net sales rose $4.36 million, or 2.6 percent, to $169.18 million because of a $17.70-million increase in sales from new stores. Comparable-store sales were down 7.2 percent, compared to a 2.3-percent increase a year ago. Comps declined roughly 15 percent for exhaust, 12 percent for front end and shocks, 11 percent for brakes, 9 percent for alignments, 6 percent for tires, and 3 percent for maintenance services.

Rob Gross, chairman and CEO, said customers are deferring and trading down from higher-cost automotive maintenance and repair purchases. Gross pointed out that brake comps — which had held up reasonably well — reversed the positive trend seen throughout fiscal 2012. “Notably, comparable-store oil changes were up 2.5 percent year-over-year, indicating that customers continue to service their vehicles, while our recent acquisitions continue to outperform,” Gross said.

Bret Jordan and David Kelley, analysts with BB&T Capital Markets, said that consumer sentiment went into a ditch during the quarter. “While record negative comps in Q1 appear to have been impacted by weather headwinds in April, deterioration in consumer confidence appears to have been the wet blanket as the quarter progressed and continues to depress current-quarter trends,” Jordan and Kelley wrote in a July 27 report on Monro. “Of particular note, Q1 saw the first absolute decline in average ticket since 2003 — a clear indicator of a consumer bias to trade-down.”

According to BB&T, Monro’s comps were down 5.7 percent through the first three-and-a-half weeks of July. The analysts noted that, while an improvement from the 7.3-percent drop reported in the fiscal first quarter, the month-to-date comps underscore notable weakness in deferrable and discretionary categories.

The overall forecast for Monro is for limited improvement from the fiscal first quarter to the second.

Management is calling for Monro to post a comp decrease in the range of 3 percent to 6 percent in the second quarter. Full-year comps (adjusted for days) are expected to, at best, come in flat and, at worst, decrease 2 percent.

Gross said management’s long-term outlook for the industry and company remain extremely positive, though it expects near-term trends will be choppy. “While gas prices have come down recently and the weather has been more favorable, the economic environment seems to be taking a greater toll on consumer sentiment and purchasing behavior,” he explained. “Trends to-date in the second quarter remain challenging. However, we have historically leveraged our strong business model to continue to expand our operations and enhance shareholder returns regardless of the economic or operating environment.

“We continue to anticipate that trends will improve in the second half of fiscal 2013 as customers turn to us for purchases that can no longer be delayed and weather patterns normalize. We are optimistic about our ability to grow market share in fiscal 2013, which should allow us to achieve greater economies of scale while positioning the company even more strongly for the long-term.”

 

Monro Reaches Deal To Buy 17 Tuffy Shops

Monro Muffler Brake continues to make acquisitions. The Rochester, NY-based company has signed a definitive agreement to purchase 17 stores from Tuffy Associates Corp. Thirteen of the stores are in the Milwaukee area, which expands Monro’s footprint into a new contiguous market, and four stores are in South Carolina, helping Monro’s to fill in an existing market.

Annual sales for these stores are approximately $9 million.

The Wisconsin locations will be rebranded as Monro, while the South Carolina shops will be rebranded as TreadQuarters. The closing is expected to occur sometime this month.

Monro has shown a propensity to take advantage of its strong balance sheet and the increased acquisition opportunities the current challenging economic environment presents. Already this year, Monro has acquired the retail stores of Kramer Tire (20 locations in Virginia) and the retail stores of Colony Tire (18 locations in North Carolina).

According to BB&T Capital Markets, Monro has signed non-disclosure agreements with eight potential acquisition candidates, each representing operations between five stores and 40 stores. “We believe that the combination of broad industry challenges and uncertain tax treatment in 2013 may make 2012 a particularly attractive year for sellers to monetize their business,” wrote BB&T analysts Bret Jordan and David Kelley in a July 27 report on Monro.

 

Driven Brands Unwraps New Hub & Spoke Franchise Program

Charlotte-based Driven Brands — the parent company to six franchised automotive brands, including Meineke Car Care Centers and Maaco — has introduced a new hub-and-spoke franchise model, which allows franchise owners to service a smaller market of about 200,000 registered vehicles with four Meineke and one to two Maaco locations.

Maaco would serve as the hub, supported by surrounding Meineke centers. The initial investment for this model is around $1.2 million. Markets targeted for expansion include Baltimore, Buffalo, Chicago, Cleveland, Dallas, Los Angeles, Miami, New York, Phoenix, Pittsburgh and Rochester, NY.

The goal of this hub-and-spoke model is to help owners dominate a market in both automotive service categories.

Dave Schaefers, senior vice president of franchise development, said this is a model for franchisees with the financial and operational ability and who want to control their market — from single car owners to large fleet and trade accounts. “The hub-and-spoke model is also a great way for car dealers to expand their business to capitalize on the trend of people keeping their cars longer instead of buying new,” he explained.

Growth projections for Meineke call for about 70 to 80 new franchises to be added in each of the next three years, with a total of roughly 180 to 200 franchises added by the end of 2014. Maaco growth projections call for approximately 165 additional new centers to be opened by 2014.

Aside from Meineke and Maaco, Driven Brands is the parent company to Econo Lube N’ Tune (automotive repair and quick-lube services), Aero Colours (automotive paint repair), AutoQual (vehicle reconditioning, protection and appearance services), Drive N Style (aftermarket installation services) and Tortal.net (a training company that specializes in developing interactive online training).

 

Point Of View: It Has Always Been About Quality

One of the reasons I have always been proud to be a part of this industry is that it gives consumers true value … quality parts, knowledgeable technicians and real value for the money spent. I know auto repairs are one of those subjects many complain about, but I have been around long enough to know that customers always complain about the invoice. However, if the works is done on time and done right the first time, they will always come back.

But, even before I got anywhere near this industry, I was a consumer of automotive service and aftermarket parts. And the reason I always chose aftermarket product over original equipment products was simple for me: I always knew aftermarket product was better – better engineered, better manufactured, better tested, better value.

Simple logic told me that carmakers built cars to sell. And, to get the car produced at a reasonable price point and to look the way they wanted it to look, the automakers had to make compromises in the design of the components used in the vehicle. On top of that, I realized that the aftermarket manufacturers had the advantage of studying how the OE parts wore, re-engineering the parts to compensate for inherent weaknesses in the original design.

Somehow, though, over the years, we seem to have let that quality advantage melt away, allowing the quality message become a perception of “almost as good,” with the carmakers slowly eroding the truth that aftermarket components are equal to or better than OE parts. Regardless of the reality, perception is what folks believe.

That’s why I have been pleased with the overall “Know Your Parts” campaign out if AASA, and particularly pleased to see that they have taken the campaign a step further, beginning the process of setting up a website for technicians and shop owners that promotes the “what’s in the box” message to the keystone members of the aftermarket channel.

To that end, AASA is now seeking significant input from those technicians and shop owners in the industry regarding what should be available on that site, what types of information will benefit the folks who throw away the box. Those interested in supplying some ideas can go to the site noted above and share their input.

Back in the day, consumers knew that aftermarket product was quality product, backed by brand names that they recognized and knew they could trust in. But brand awareness has diminished over the years, and many of the most recognized aftermarket brands have either faded completely out of sight or have been diluted to the point that they are barely remembered. And, in the breach, there are parts retailers and program groups — today’s recognized brands and the ones that must promote the quality of the product and the quality of the shops that do the work.

Like or not, the world has changed dramatically, and how the message gets to consumers is more complex now then ever. Between social media and other Internet-based entities, consumers are inundated with the marketing message from both carmakers and aftermartketers alike. But, for too long, as an industry, we have allowed others to control the quality message.

Maybe we assume consumers know our parts are the highest quality and, most often, better than the original components. But, through programs like the “Know Your Parts” campaign, maybe we can continue to regain the ground we have lost regarding the quality message.

_____

Gary A. Molinaro
Editor/Publisher

 

Snap-on Reports Continued Higher Sales From U.S. Van Network

Snap-on Inc. was able to record higher net sales of $737.90 million in the second quarter of 2012, despite continued persistent headwinds out of Europe. Sales were up 1.5 percent year-over-year. Excluding some $20.80 million in unfavorable foreign currency translation, organic sales increased 4.5 percent.

Net income was down 2.1 percent to $76.40 million due, in part, to higher restructuring costs.

Continued higher sales in the United States paved the way for the Snap-on Tools Group to report $325 million in segment sales. This was up 8.7 percent over the second quarter of 2011 and up 10 percent excluding currency.

Segment operating earnings fell 3.7 percent to $44.50 million as the Tools Group was hit with $6.90 million in restructuring costs, largely for a pension plan settlement related to a 2011 facility closure. As a percentage of sales, operating earnings decreased 180 basis points from 15.5 percent to 13.7 percent. Without the charge, margin for the 2012 second quarter would have improved to 15.8 percent.

Snap-on Repair Systems & Information Group sales fell 3 percent to $227.40 million. Excluding currency, segment sales would have been up a scant 0.2 percent as high single-digit sales gains in diagnostics and Mitchell 1 repair information productions was partially offset by reduced undercar equipment sales in Europe, as well as a low single-digit decline in sales to OEM dealerships.

Segment operating earnings rose 6.5 percent to $52.20 million, and operating margin increased from 20.9 percent to 23 percent on a year-over-year basis. Management attributed the uptick to high single-digit growth in the higher-margin businesses.

 

Action Gator Tire Chain Grows To 24 Locations

Action Gator Tire Stores, one of Florida’s largest Goodyear and Cooper dealers, has added three new stores: two in Orlando and one in nearby Winter Park. This gives the company a total of 24 locations across Central Florida.

 

Meineke Taps Launch Tech USA As Preferred Scan Tool Vendor

Launch Tech USA (Ontario, CA) has landed a diagnostics equipment agreement with the Meineke Car Care Centers diagnostics program, making Launch the preferred vendor for scan tools to help diagnose and repair vehicles in the more than 900 Meineke shops nationwide.

 

South Florida Dealership Group Adds Mighty Franchise

The Warren Henry Auto Group of South Florida has added a wholesale Mighty Auto Parts franchise called Mighty of South Florida to its organization. The new franchise is located in Davie, FL. Warren Henry is a multi-franchise dealership selling Infiniti, Jaguar, Lamborghini, Land Rover, Volvo and Subaru vehicles.

 

Are You Following Service Executive On Twitter?

Service Executive is on Twitter at www.twitter.com/ServiceExec. Follow us for even more in-depth coverage of the independent vehicle service and repair market — original content that you won’t find in the regular newsletter, as well as links to what other journalists are saying about the players that move our industry. Here are a few recent examples …

• July 27 — Michelin recalling 841,000 BFGoodrich, Uniroyal tires http://www.cnn.com/2012/07/26/travel/tire-recall/index.html …

• July 25 — J.D. Power: As Vehicle Appeal Improves, Owners Find Downsizing Doesn’t Necessarily Mean Downgrading http://www.jdpower.com/content/press-release/TkybDHl/2012-u-s-automotive-performance-execution-and-layout-apeal-study.htm …

• July 23 — Fleet sales at company-owned NAPA stores up 1% in the Q2 — down from mid-single-digit growth in Q1.

• July 12 — From The Detroit News … Service departments a vehicle for profits http://www.detroitnews.com/article/20120712/AUTO01/207120403 …

Sometimes, we’re informing you about a major story as it’s announced. Other times, we’re highlighting important new research and analysis. From time to time, we just want to pass along an interesting (maybe even off-the-wall) story.

What you get with Service Executive on Twitter is a more thorough account of what’s going on in and around the industry. Follow us and get more of what you come to Service Executive for.

 

Autologic Hires Gary David As Corporate Account Manager

Gary David has joined Autologic Diagnostics as its new corporate account manager, responsible for accounts in the United States and Canada. David brings with him more than 20 years of industry experiencing, including time as a senior national account manager at Robert Bosch, a regional sales manager with Vetronix Corp. and a regional sales manager for Snap-on.

Commack, NY-based Autologic specializes in providing independent repair shops with dealer-level software for eight import vehicle manufacturers.

 

Mudlick Offers Direct Mail Program For RLO Training Customers

Mudlick Mail has announced a partnership with RLO Training, a Seattle-based provider of management training to the automotive service industry, to serve as the direct mail provider for the company’s customers. Members of the Bottom Line Impact Group, a subsidiary of RLO Training, also will be able to access Mudlick Mail’s campaigns.

Under the agreement, Mudlick Mail will offer special direct mail packaging and pricing for RLO customers and Bottom Line Impact Group members. Mudlick Mail’s campaigns include a free market analysis, design services, printing, labeling and postage. In addition, RLO clients and Bottom Line Impact Group members will receive a free call-tracking number to help them capture all inbound leads generated by their direct mail campaigns.

 

Two More Software Providers Add Carfax QuickVIN

Auto Data Inc., a software and data provider to the quick lube industry, and Masterlink Software, which is known for its Auto Shop Writer system, have added Carfax QuickVIN to their offerings. This allows users to retrieve the year, make, model and VIN information of their customers’ vehicles by entering only the license plate information.

Additionally, Carfax QuickVIN users participating in the Carfax Service Network program can have their shop’s name and contact information appear alongside each service record on Carfax Vehicle History Reports.

 

Mitchell 1 Debuts New Customer Communication Tool, Updates ProDemand Software

Mitchell 1 has introduced a new customer communication tool called ProPack. It is for Mitchell 1’s Manager family of shop-management software. ProPack includes the following:
Message Pro, which is designed to give shops the ability to communicate with vehicle owners via text messaging.
Report Pro, which provides a new way to print customer invoices, technician worksheets, custom multipoint inspections and other reports not currently available in Mitchell 1 Manager.
Lube Sticker Pro, which allows shops to print windshield reminders with a shop’s logo, as well as configure the sticker for good/better/best service.

In related news, Mitchell 1 has updated its ProDemand repair information software with a new feature that allows technicians to view the top lookups for each vehicle — as many as 10 of the top components, specific to each year/make/model combination. The list is dynamic, with results updated in real time.

 

AVI Planning Bigger Training Conference With Exposure From New Owner Babcox

Automotive Video Inc. (AVI) has added a diesel category to its training conference this fall during Automotive Aftermarket Industry Week in Las Vegas. The schedule also includes more management training courses compared to last year and advanced diagnostics.

The additional courses, along with national exposure and advertising from new owner Babcox Media, should increase enrollment, AVI operations manager Katie Hallnan said. AVI hopes for about 500 attendees this year, compared to about 300 last year, she said.

All classes will be geared toward helping installers, technicians and shop owners become more efficient with diagnosing vehicle problems.

The deadline for an early registration discount ($395) for the training conference is Oct. 15. For more details, go to www.aviconference.com.

 

Carquest Technical Institute Offering Six Sessions At ASRW

The Carquest Technical Institute will, once again be leading sessions during the Automotive Service & Repair Week (ASRW) conference program. This year’s offering will be:
• The Problem with Reprogramming
• Navigating the Electrical Roadmap
• Electronic Power Steering
• Modern Misfire Diagnosis – Part 1
• Modern Misfire Diagnosis – Part 2
• New Vehicle Technologies

Conference sessions led by the Carquest Technical Institute are offered as part of the ASRW Conference Program beginning Wednesday, Oct. 10. Early-bird pricing for conference sessions is available and an all-access Super Pass is on sale for $335 through Aug. 16. Individual sessions are $70 (90-minute) and $130 (3-hour), and all exhibitors are offering a discount of $50 off any conference purchase. For more information, visit www.ASRWevents.com.

 

AASA, MEMA Oppose Nixing Annual Vehicle Safety Inspections

In official comments submitted to NHTSA on July 20, AASA and MEMA have expressed support for state inspection programs as well as concern regarding NHTSA’s proposal to strike its recommendation of annual automotive safety inspections. This proposal came as NHTSA is working to amend the Highway Safety Program Guidelines for states.

You can read the comments submitted by AASA and MEMA by clicking here.

 

AMRA Revises Dues Schedule for Service Providers

The Automotive Maintenance & Repair Association (AMRA) has announced a revised dues schedule for service provider members. The revised schedule, which took effect Aug. 1, provides for membership dues based strictly on the number of service facilities — either company-owned or as a franchise — that a company offers under its brands.

The previous system provided for a membership dues fee based on the annual automotive aftermarket sales volume for the company, in addition to a fee-per-service location for participation in the Motorist Assurance Program (MAP).

AMRA says that, for most members, the revision will bring a reduction in the amount each will pay in annual dues. For example, an independent service provider with one service location will have its dues reduced from $250 to $150.

“By basing dues on the number of locations, rather than sales, it is easier for companies to apply for membership without having to disclose sales figures,” explained Barry Soltz, president of AMRA/MAP. “This should make becoming an AMRA member and a participant in MAP more appealing to service providers across the U.S. and Canada.”

 

Car Care Council Releasing Segmented Version Of ‘Auto Service & Repair’ Video

The Car Care Council has created a web video series by segmenting its award-winning consumer video, Auto Service & Repair: What to Expect, into eight short episodes that are being posted to the council’s YouTube channel, Facebook page and Twitter feed every two weeks starting Tuesday, July 31. The first four episodes will concentrate on finding and building a relationship with a repair shop, while the last four episodes, set to air in the fall, will highlight the actual repair process.

Industry members can download the eight video episodes via the Car Care Council website at www.carcare.org/industry-participants/car-care-clips/.

 

Service King Poised To Expand Nationally Under Carlyle Group Ownership

We now know how Dallas-based Service King Collision Repair Centers is going to expand its business nationally. As you may recall, back in May, the company announced plans to branch out of Texas via the acquisition of Auto Body World, which has nine locations in Arizona. Now, Service King has the means to grow nationally.

The Carlyle private equity group — in partnership with the Lennox family, management and employees of Service King — is acquiring majority ownership of the company. Founder Eddie Lennox will retain a “significant ownership stake” in Service King, and CEO Cathy Bonner will become chairman, representing Lennox on the board of directors.

Terms of the transaction, which is expected to close this month, were not disclosed.

Carlyle’s plans for Service King are obvious. In a statement announcing the pending acquisition, Carlyle managing director Shary Moalemzadeh talks about “further growing the business.” Adam Glucksman, another Carlyle managing director, said “we see the opportunity to help a proven operator break through to the next level of scale in a fragmented industry.”

Additionally, Lennox is quoted as saying: “I am thrilled to have found a partner in The Carlyle Group who shares my vision for expanding our company nationally.”

Established in 1976, Service King operates 49 shops in the Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan areas. The company is billed as “the largest independent U.S. chain of auto body repair shops.”

 

ABRA Auto Body & Glass Enters The Indiana Market

Minnesota-based ABRA Auto Body & Glass has opened its first franchise repair center in Indiana. The new location — on the site of McGonigal Buick GMC Cadillac in Kokomo —is ABRA’s 42nd overall. The move is part of the company’s plan to accelerate growth in the months and years ahead. Management’s goal is to increase the total number of ABRA repair centers to 124 across 13 states.

ABRA is actively seeking opportunities to acquire additional repair centers as part of its national growth plans.

 

New LKQ Promise Of Protection Program

LKQ Corp. has expanded its Promise of Protection program to cover a wider range of parts, including OEM recycled. The new program, which went into effect July 17, will indemnify licensed auto repair shops against injury or damage caused by any defective auto or light-truck LKQ product, in accordance with the terms set forth in the Promise of Protection. This expanded product liability protection supersedes LKQ’s previous Promise of Protection, which was introduced a few months ago.

 

Vehicle Service Group Asian Plant To Grow

The Vehicle Service Group (VSG) — parent company to eight major vehicle lifting and collision repair brands — has broken ground on a 54,000-square-foot expansion of its manufacturing facility in Haimen, China, which serves the Asian, Indian and Australian markets. The move is expected to increase manufacturing capacity by more than 80 percent. Construction is scheduled for completion in the third quarter, with production ramping up next spring.

VSG’s brands are Rotary Lift, Chief Automotive Technologies, Forward Lift, Direct-Lift, Hanmecson, Revolution Lift, Blitz and Nogra.

 

AutoNation’s Customer-Pay Revenue Increased 5% In Q2

AutoNation’s Customer Care business (the service, parts and collision side) saw its sales rise 5.3 percent to $602.50 million and its gross profit increase 3.3 percent to $253.40 million in second quarter of 2012. Same-store sales were up 5.1 percent, following a 4-percent increase in the first quarter of 2012.

“We are very pleased with our ability to grow our Customer Care business despite being at an industry low point for units in operation in the dealership service space that dates back to the mid-1980s,” said Mike Maroone, president and chief operating officer. “The units in operation base is expected to begin growing again in 2013.”

Customer-pay revenue was up 5 percent and gross profit was up 2 percent. This was the eighth consecutive quarter of year-over-year gains in customer-pay gross as well as revenue. Customer-pay service gross profit benefited from improved market conditions and better marketing of products and services in the service department.

Management also reported “strong growth” in its wholesale parts business and collision business. Together, they represented 25 percent of Customer Care’s gross profit improvement.

Billed as “America’s largest automotive retailer,” AutoNation owns and operates 260 new vehicle franchises, which sell 32 brands across 15 states.

 

Group 1 Selects ExxonMobil As Preferred Supplier

ExxonMobil is now the preferred supplier of engine oil products for Group 1 Automotive. As a result of this arrangement, Group 1 dealers in the United States will recommend Mobil-branded engine oil products as the preferred lubricant for dealer-based vehicle service. Group 1 dealers also will receive full marketing support, including Mobil 1 and Mobil Super-branded signage and brochures, as well as access to ExxonMobil promotions.

Under this arrangement, Mobil 1 and Mobil-branded oil programs with the following OEMs will be available to the dealer network: Toyota/Lexus, Nissan/Infiniti, General Motors/ACDelco, Mercedes-Benz USA, Porsche and Kia.

With 111 dealerships across the country, Group 1 operates in Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, New Hampshire, New York, Oklahoma, South Carolina and Texas.

 

Tom Marx To Address Business Valuation At Upcoming Trucking Conference

Tom Marx, CEO of Marx Group Advisors, will share his mergers and acquisitions expertise during the Successful Dealer Development workshops at Intersection 2012 in Dallas. Marx will discuss “How to Sell Your Company For What It’s Worth: Avoiding Pitfalls During the Business Valuation Process” on Thursday, Aug. 23.

Sponsored by Randall-Reilly Business Media & Information, Intersection 2012 is a trucking convention developed to attract participants from all segments of the industry. The Great American Trucking Show anchors the event, which also includes the Commercial Vehicle Outlook Conference, the ProPickup Truck Expo and the Successful Dealer Development sessions. For more information, visit www.successfuldealer.com/development.

 

Obituary: Universal Technical Institute Founder Bob Sweet

Bob Sweet, founder of the Universal Technical Institute, died July 9 at the age of 87. A 1948 graduate of SUNY Oswego, Sweet received his degree in vocational education. In 1965, he founded UTI in Phoenix with 11 students, two classrooms and the goal of providing relevant auto repair training.

“We are deeply saddened by the loss of Bob Sweet,” said Kim McWaters, CEO of UTI. “He was an industry visionary and pioneer, and his commitment to providing quality training has been the driving force behind our company’s innovation for 47 years.”

Throughout his years at UTI, Sweet focused on providing high-quality training delivered in a professional manner to students who were eager to put their skills to good use. Often quoted as saying, “Buildings don’t teach; people do,” his business philosophy was to adhere to standards of excellence and to instill a sense of pride and ownership in his employees.

Today, UTI is a provider of post-secondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. The company has 11 campuses across the country, with an average undergraduate enrollment of more than 16,000 students.

In 1991, Sweet retired from UTI but continued to remain close to the organization. In his later years, Sweet was involved with the UTI Foundation, which provides scholarships and assistance to UTI students.

 

News Briefs 8/1/12

Stanley Black & Decker reported high-single-digit organic growth for its North American and mobile distribution business (a.k.a. Mac Tools) in the second quarter of 2012.

• Myers Industries’ distribution segment (a.k.a. Myers Tire Supply) saw its sales fall 4.1 percent to $44.19 million in the second quarter of 2012. Management attributed the decrease to slower customer demand.

• The NASCAR Technical Institute in Mooresville, NC is celebrating its 10th anniversary this summer. The automotive and motorsports technology program is a part of the Universal Technical Institute.

Hunter Engineering has received the CEO Award for Innovation from Sears Holdings Corp. for its role in providing new technology to the Sears Auto Center business.

McGee Auto Service has expanded to more than 20 locations across central Florida.

• The Coordinating Committee for Automotive Repair (CCAR) has launched a mobile version of its website.

AutoNetTV now offers digital menu boards.