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Service Executive Issue #9-12 (Full)

Ken Walker Retires As Driven Brands Chief Executive; Fast Food Franchising Veteran Hired As New CEO

Ken Walker has retired as the chairman and CEO of Driven Brands, the Charlotte-based parent to Meineke Car Care Centers, Maaco Collision Repair & Auto Painting, Econo Lube N’ Tune and more. In his place, Harvest Partners (the private equity firm that bought Driven Brands back in December) has named Jonathan Fitzpatrick as the company’s president and CEO.

Fitzpatrick comes to the automotive aftermarket from fast food giant Burger King, where, for the last seven years, he has served as an executive vice president, as well as chief brand and operations officer. He has held a number of senior executive positions during his tenure at Burger King, including senior vice president of franchise development. Fitzpatrick has more than 15 years of experience in franchising and global operations.

“Driven Brands is a great company made up of established brands and committed franchisees,” Fitzpatrick said in a statement. “I am looking forward to building upon all the success and championing new approaches to drive sustainable and profitable growth both domestically and in the largely untapped international markets.”

Walker, 64, has led Driven Brands — and, before that, Meineke — for the past 16 years. He joined Meineke as president and CEO in 1996 after serving nearly four years as the president and CEO of Parts Inc., a distributor of automotive parts and supplies with distribution facilities and stores covering 24 states. Prior to his position with Parts Inc., Walker spent 17 years in similar businesses, including time as the president of Cardis Corp., as well as stints with AI Automotive Corp. and Big 4 Automotive.

He is a former chairman of the Automotive Warehouse Distributors Association (AWDA). Walker also has served several years as a member of the AAIA board of directors with an active role on the government affairs committee.

 

Wyoming Paid The Most For ‘Check Engine’ Repairs In 2011, According To Annual CarMD Report

Drivers in Wyoming paid the most in the nation for car repairs at an average cost of $389.18, according to CarMD.com Corp., which analyzed more than 160,000 repairs made on vehicles with “check engine” light problems in 2011. In Wyoming, motorists paid 17 percent more than the U.S. average for overall repairs, including 19 percent more for labor and 15 percent more for parts.

CarMD attributes Wyoming’s ranking to harsh weather and high altitude that may wreak havoc on vehicles. Another factor is the state’s more remote locations with widespread and reduced access to parts and people to service vehicles, which results in motorists’ tendency to put off smaller repairs. CarMD says this is illustrated by the fact that catalytic converter repairs were the second most common reason the “check engine” light came on in Wyoming. “It shouldn’t even be in the Top 10, let alone ranked second,” the Irvine, CA-based company stated in a June 21 report. “This is a very expensive repair, and often the result of putting off smaller repairs.”

Rounding out the Top 5 most expensive states for car repair are, in order, Utah (an average total of $378.54), California ($367.86), Montana ($364.29) and Arizona ($362.65). All of the Top 5 states are in the West. CarMD attributes this, in part, to higher amounts of airborne dust. The company points out that, by putting off replacing air filters, vehicle owners in western states put their vehicles’ mass air flow sensors at risk. On average, this is a $400 repair, according to the CarMD report.

Drivers in Indiana paid the least at $283.95 per transaction. That was followed by Maine ($289.56), Wisconsin ($289.90), Iowa ($289.91) and New Hampshire ($292.66). Texas paid closest to the national average for car repair costs at $333.75 — just pennies less than the U.S. average.

Drivers in Vermont paid the least for labor at $98.90, with those in Colorado paying the most at $143.17 for labor. Meanwhile, drivers in Maine paid the least for parts at an average of $175.91, with those in Wyoming paying the most at $247.70.

To see the complete state-by-state rankings, click here.

According to CarMD, the average cost of U.S. “check engine”-related auto repairs in 2011 came in at $333.93, or $215.32 in parts and $118.61 in labor. This figure was down 6 percent from 2010 due, in large part, to a double-digit drop in labor costs. The company contends that industry contraction had a lot to do with the drop in labor rates, which was partially offset by increased parts costs and more severe repairs increasing in frequency and reaching CarMD’s 10 most common problems list.

Most states experienced a drop in repair costs, with the exceptions being Georgia, Maryland, Minnesota, Mississippi, Montana, Nebraska, North Carolina, Oklahoma, Tennessee and Utah, as well as the District of Columbia.

“We are encouraged to see overall repair costs trending down this year but recognize that drivers are still putting off small repairs such as spark plugs and oxygen sensors that can quickly turn into more serious problems,” said Art Jacobsen, vice president of CarMD.

CarMD’s state-by-state ranking of repair costs was derived from an analysis of 163,582 repairs made from Jan. 1, 2011 through Dec. 31, 2011 by CarMD’s network of ASE-certified technicians. The repairs are related to a vehicle’s “check engine” light.

The CarMD database and average repair costs findings do not include problems that are outside the scope of a vehicle’s on-board diagnostic computer monitoring, such as tires, brakes, belts and hoses.

 

NASTF Hires Skip Potter As Executive Director

Industry veteran Skip Potter has been announced as the next executive director of NASTF. Potter most recently was the executive director and CEO of the Chesapeake Automotive Business Association (CABA), as well as chief executive of the Automotive Aftermarket Employee Federal Credit Union. His background also includes 16 years with AAIA and its predecessor, the Automotive Service Industry Association (ASIA), including time as AAIA’s vice president of membership.

His background also includes time as the director of marketing at Potomac Automotive Warehouse and public relations director for the Old Dominion Speedway. In his new position, Potter will be based in Jacksonville, FL.

 

Point of View: How Are We Doing?

We’ve talked often in this space and in the similar venue on our website for The Greensheet about statistics – what they can tell us and how they are often used to lead us to certain conclusions. Numbers don’t lie, some will say, but, as we have discussed often, the context of the numbers is vital to the conclusions reached. Without a proper context and reasonable understanding of what the numbers really tell us, statistic and studies can often be reckless tools in the hands of those who are unschooled at looking beyond the statistical analysis.

For too much of the past four decades that I have been around this industry, it has been a mixed bag at best when it came to measurables in this business. Over the last 20 years particularly, that has improved, however, with more well-prepared market research than in the past. Between the associations, the publishers and the market research firms, there is more reliable data now than ever before – data that can be used by those on the strategic side to craft a strategy justified by the market research on hand.

But, as I noted earlier — and as I often repeat — it is easy to be misled by the data, and, too often, we accept numbers as gospel, rarely looking at how we got those numbers or who made the analysis.

I’m sure my friends at the associations may not be pleased, but one of the numbers I’ve found curious over the years is the figure defined for unperformed or underperformed maintenance and repairs in the aftermarket.

Early on, AAIA defined unperformed or underperformed maintenance in the United States totaling about $60 billion for 2008. In 2009, AASA defined underperformed maintenance moving from $55 billion in 2007 to $50 billion in 2008. In late 2011, AASA announced that grew to $62 billion in 2010 compared to $54 billion the previous year.

At the time, Paul McCarthy – AASA vice president of industry analysis, planning and member services – said that tight household budgets and high unemployment caused a pent-up demand, with a considerable amount of repairs and maintenance being put off. “Going forward, the weak economic recovery and continued high unemployment levels may continue to keep the amount of maintenance motorists postpone at a high level,” he said.

Now, don’t get me wrong: I understand the need for this type of projected figure, a measure of the potential for our industry as a whole. And I understand it is an admirable goal for our industry players to try and gather every single dollar of sales and service that could be squeezed from the business. But I think that there is much to be concerned about when looking at this type of figure – and certainly care taken when making strategic decisions based on this data.

Regardless of how good we are as an industry, regardless of how well-off the American consumer may be, regardless of the true economic climate in the country, there will always be a very deep pool of underperformed maintenance, and tons of unperformed maintenance. It is simple a fact of life. So, as good as it is to know what the facts may be, we need to use that data as a simple guidepost along the way, nothing more. And, more importantly — as we should do with all data — we need to understand how the figures were derived.

Again, with all due respect, this figure tends to be a very educated guess.

The figures on underperformed maintenance and unperformed repairs should tell us clearly there is much work to be done in this industry – much potential yet to tap. But we certainly don’t want to measure ourselves based on what is left on the table. I like to look at the industry through a lens that shows me what good we are doing, how well we are performing, how much progress we are making in improving our relationships with the American vehicle owner.

_____

Gary A. Molinaro
Editor/Publisher

 

Germany’s Continental AG Acquires International Diagnostics Specialist Omnitec

The independent aftermarket segment of Germany’s Continental AG has acquired the Omnitec Group, an automotive diagnostics specialist based in the United Kingdom. Omnitec is an international supplier of diagnostic equipment services to the independent aftermarket and automotive manufacturers, including scan tools, workstations and gas analyzers. It has a U.S. office in San Jose, CA.

The acquisition is intended to strengthen Continental’s position in aftermarket diagnostic products and services worldwide.

The two companies have been doing business together for years. Since 2008, Continental ContiSys has been offering multi-brand diagnostic technology from Omitec under the VDO brand. Additionally, the sales rights for the Autodiagnos brand in Germany, Austria and Switzerland were acquired from Omitec in mid-2010.

 

New England Dealership Group Adds Mighty Franchise

Balise Motor Sales now operates a wholesale Mighty Auto Parts franchise. With facilities in Massachusetts, Rhode Island and Connecticut, Balise is one of the largest retailers of new and used automobiles in New England. New car dealerships include Buick GMC, Chevrolet, Ford, Honda, Hyundai, Lexus, Mazda, Nissan, Scion, Subaru, Toyota and Volkswagen. Balise also has three collision repair centers.

Its Mighty wholesale distribution division is based in Warwick, RI and operates as Mighty of Rhode Island.

Jeb Balise, president of Balise Motor Sales, said Mighty will help his company capture a bigger share of the customer-pay service business. “We will always emphasize our OE affiliations and service commitment. However, the reality is that the average vehicle age is now nearly 11 years, and we’re missing much of the service business on older cars,” Balise explained. “By providing more service menu options to our customers with older vehicles, we think we’ll be able to grow our service business across all makes and models, boost our customer retention numbers, and enhance our fixed cost absorption.”

Dan Elmer, director of fixed operations, added that, with the exclusive distribution rights for Mighty products throughout a key market area, Balise Motor Sales can leverage relationships with its wholesale accounts. “We’re sold on Mighty’s product quality and anticipate strong demand for Mighty’s inventory control services from our outside accounts, many of whom need help managing their stocking products like filters, brakes, wipers, batteries and chemicals,” Elmer said.

Mighty Distributing System of America is headquartered in Norcross, GA and oversees 112 franchises in 42 states.

 

ASA Automotive Systems Adds Visual Communications Tool Via Partnership With ClearMechanic

ASA Automotive Systems, which develops software for tire dealers and auto repair shops, has announced a partnership with ClearMechanic that adds visual communication tools to ASA’s software. With this added functionality, shops using ASA’s system can visually explain repair recommendations by sending consumers photos via email or text message showing the parts needing repair, along with expert illustrations and explanations of why the work is necessary.

All images and illustrations are stored in ASA’s database so that shops can follow up with customers on declined services. The technology also allows users to send reminders with the images associated with the declined service, along with a work estimate.

 

Navex Adds Carfax QuickVIN To Its POS Software

Navex Inc., a software and technology provider to the tire and automotive aftermarket, has added Carfax QuickVIN to its point-of-sale software. This allows users to retrieve the year, make, model and VIN information of their customers’ cars by entering only the license plate number. 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.

Based in Memphis, Navex is a wholly-owned subsidiary of Distribution Service Technologies (DST), a developer of e-business and enterprise resource planning (ERP) support software specializing in the automotive and heavy-duty parts distribution and repair markets.

 

Jiffy Lube Launches New National Ad Campaign

Jiffy Lube International recently launched its first franchisee-funded national ad campaign in more than two decades. The campaign, which bears the theme “Leave Worry Behind,” is designed to highlight Jiffy Lube’s commitment to delivering a worry-free vehicle maintenance experience.

The campaign includes TV, radio, print, digital and social media components. It debuted in June with two TV spots on major broadcast and cable networks. The digital side of the campaign includes buys on such online properties as MLB.com and MSNBC.com (to coincide with the 2012 Olympic Games).

The campaign was created by JWT Atlanta (a.k.a. J. Walter Thompson), with media buying handled by Mindshare.

 

Speedemissions To Begin Franchising Its Business Model

Speedemissions Inc. has signed an agreement with The Franchise Doctor of Atlanta to assist the vehicle emissions testing and safety inspections company with franchising its business model into other U.S. markets. Speedemissions currently owns locations in Atlanta, Houston, St. Louis and Salt Lake City.

Management views franchising as a means to continue the company’s growth strategy and increase the size of its retail store presence. The company is expected to begin selling franchises by the fourth quarter.

“We’ve spent a great deal of time researching and studying this strategic business initiative over the past couple of years and now feel we have refined our store model into what can become a successful franchise model as well,” explained Rich Parlontieri, president and CEO.

As you may recall, Speedemissions has been working on new initiatives to deal with increased competition following revisions in emission-testing laws in some of its markets.

In an attempt to mitigate a glut of new competitors, the company earlier this year began cutting operating expenses at both the corporate and store level — a move that is expected to involve the closure of underperforming stores. The company also has stepped up the sale of products such as windshield wipers and light bulbs, and plans to add other automotive services this year.

 

NHTSA Writes New State Vehicle Inspection Guidelines

NHTSA is seeking comments on its revised guidelines for periodic motor vehicle inspections at the state level. The U.S. agency writes that each state should have a program for the periodic inspection of all registered vehicles and that vehicle owners should be required to correct any unsafe conditions found during an inspection.

According to NHTSA’s new guidelines, such an inspection program should provide (at a minimum) that …

• Every vehicle registered in the state is inspected at the time of initial registration and on a periodic basis thereafter.

• The inspection is performed by competent personnel specifically trained to perform their duties and certified by the state.

• The inspection covers systems, subsystems and components having substantial relation to safe vehicle performance.

• Each inspection station maintains records, including (at least) class of vehicle, date of inspection, make of vehicle, model year, VIN, defects by category, identification of inspector, and mileage or odometer reading.

• The state publishes summaries of records of all inspection stations at least annually, including tabulations by make and model of vehicle.

Additional details on NHTSA’s proposed guidelines, as well as information on how to submit comments, can be found here. NHTSA is taking comments until July 20.

 

NATEF Updates Program Standards

The National Automotive Technicians Education Foundation (NATEF) has updated the standards used to accredit automotive training programs at the secondary and post-secondary school level. The new NATEF model establishes three levels of accreditation: Maintenance & Light Repair (MLR), Auto Service Technology (AST) and Master Auto Service Technology (MAST). The differences at each level are reflected in the number of tasks, number of instructional hours and instructor qualifications. NATEF says each level builds on the previous one and covers all major automotive systems, but to different depths of learning.

NATEF calls the update one of the most significant changes to the program in the organization’s history.

“The industry mix of work has changed. Employers are seeing more maintenance-related services in their shops and want entry-level technicians with more foundational knowledge,” said Trish Serratore, NATEF president. “The new standards address these needs and provide more flexibility for automotive training programs nationwide.”

The new automobile program standards were developed after review and input by the NATEF automobile standards review committee and have been approved by both the NATEF board of trustees and ASE board of directors. “The standards were developed in cooperation with OEMs, employers and instructors,” Serratore explained. “NATEF realizes that the new model represents a major change in program accreditation, and is committed to working with each state, program and instructor to ensure a smooth transition.”

 

ESI Offers Service Writer’s School In Additional Locations

For the first time, the Educational Seminars Institute (ESI) is offering its Service Writer’s School of America 2.5 in new locations across the United States. The program, previously only offered in California, also is being extended from two days to two-and-a-half days to accommodate a larger number of service advisors and assistants.

Dates for the remainder of 2012 are: Aug. 18-20 in Indianapolis, Oct. 20-22 in New Orleans and Nov. 3-5 in Orlando. Classes will be taught by ESI instructor Kevin Donohoe, who owns four automotive businesses and is an ASE master technician, an ASE service consultant and a college instructor.

Service Writer’s School classes teach service advisors and assistants how to handle situations at the service desk, including objections, customer service, estimating, phone skills and more.

Registration includes one year of telephone support, as well as a 60-page productivity package. For information, visit www.esiseminars.com, email esi@esiseminars.com or call (888) 338-7296.

 

ALI Lift Inspector Certification Program Registration Opens

Registration is now open at www.autolift.org/store.htm for the Automotive Lift Institute (ALI) Lift Inspector Certification Program. Currently in a pilot phase, the program officially kicks off at this year’s SEMA Show.

Anyone with a minimum two years of experience as a vehicle lift inspector may apply to participate in the new certification program. The program includes printed training material, a participants orientation workshop, a written pre-course exam, a final course exam and documented practical experience.

Companies with a Certified Lift Inspector on staff will be listed in an online directory on the ALI website. The directory will be searchable by zip code to make it easy for customers to find local vehicle lift inspection companies with ALI-certified inspectors.

 

Association Of Diesel Specialists Names New Training Director

The Association of Diesel Specialists (ADS) has named Tony Salas as its new director of training. He brings with him 20 years of automotive and diesel instructor experience, as well as seven years of working with ADS and its members on a contract basis. Salas also has provided contract training for General Motors Fleet & Commercial as well as ACDelco.

 

Canadian Tire Piloting Drivers Training Program In Ontario

Canadian Tire has launched a pilot driving school in Ontario called the Canadian Tire Drivers Academy. The program includes hands-on car maintenance training from certified mechanics. And, graduates will receive complimentary roadside assistance for one year, as well as discounts and offers on a variety of automotive products and services.

 

Q1 Parts & Service Results For Major Auto Dealer Networks

All of the publicly traded dealership groups posted higher year-over-year parts and service sales in the first quarter of 2012. The only exception was Carmax Inc.

Click here to see the chart.

 

Innovation Group Adds Macco To Its Managed Repair Network

Maaco Collision Repair & Auto Painting’s 70 platinum certified direct repair centers have been added to the Innovation Auto Managed Repair Network. This strategic partnership offers Innovation Group insurance and fleet customers additional certified repair facilities across the United States.

The Innovation Group is a global provider of business process services and software to the insurance, fleet, automotive and property industries. It provides contact centers, repair networks and more to support accident management, repair and estimation, and claims management services for a range of clients, including AXA Insurance, Hertz, Toyota and Zurich.

 

News Briefs 7/11/12

BP Lubricants USA/Castrol has awarded a non-exclusive distributor agreement for packaged and bulk lubricants to the Apache Oil Co. of Pasadena, TX.

Schrader has been named “Supplier of the Year” by Prema Canada, one of the largest distributors of tire and wheel service supplies in Canada.

• A bill before the North Carolina senate seeking to eliminate annual motor vehicle safety inspections has failed upon adjournment, according to MEMA, which opposed the measure.

• According to a new report from Pike Research, around 410,000 plug-in electric vehicles will be sold between 2011 and 2015 in the United States. Cumulative U.S. sales will not reach the 1 million mark until 2018, according to the Boulder, CO-based clean technology market research and consulting firm.

 

People Watching 7/11/12

Scott Morrison, president and CEO of Duncanville, TX-based City Garage, has been appointed to serve on the Automotive Oil Change Association (AOCA) board of directors. He fills a vacancy created when Rick Price resigned to become governor of the Texas Rotary.

GE Capital’s Retail Finance business, the consumer-lending unit of the General Electric Co., has announced the return of Orlando Zayas, who will serve as vice president of emerging markets – automotive aftermarket. Most recently, Zayas was president of Safe-Guard Products International, which sold finance and insurance products to automotive dealers.

Volkswagen of America has appointed Don Stephenson as its director of VW brand after-sales. In this role, he directs all parts, accessories and service initiatives for the VW brand. Service business development; parts and accessory sales; accessory lifecycle and development; and parts, service and accessory marketing all report to Stephenson.