Group 1's goal three years ago was to have 76 percent of your dealerships' fixed costs covered by service and parts income. Have you reached that goal?
We are hovering around 72 percent, and we are consistent. But I would not look at that measure as being definitive on the success of our business. My goals are toward same-store growth and profitability. That (reflects) optimal use of facilities and customer retention. We look to this as a surrogate measure for market share.
Toyota has service market share and service sales share indexes. I like that approach. I am schooled in that, having come from Gulf States Toyota. We need to understand what factor we represent in the marketplace. If we capture a greater share of the business, we have to be concerned with what potential there is within the market.
How great a priority are those measurements?
One of the first things I want to do is establish clear metrics that represent a common view of the business throughout our dealer network. The fixed-operations business is our highest-margin business. We run a 54 percent margin in fixed operations. Metrics are a priority for me. We cannot make decisions in a vacuum.
How will you develop those metrics?
I am forming a fixed-operations council of representatives from each of our five regions. We will bring in people involved in day-to-day operations and use their expertise and their knowledge of their market areas to build these metrics as well as our overall fixed-operations strategy.
I have plenty of ideas, and I would be happy to put many of those in place. But execution is the definition of success. I want to make sure we build from the ground up.
How are you dealing with the industrywide challenge of declining warranty work?
We have seen declines in the neighborhood of 5 percent to 7 percent a year over the prior year. Our overall business is up. I think express services are our future. We want to offer convenience. Most of our stores are open a full day on Saturday and have extended hours during the regular workweek. The aftermarket businesses outnumber the dealerships, but there's a lot of low-hanging fruit here.
What are you doing to combat the technician shortage?
We have some good technicians, but it is a perpetual effort to develop them. The trade schools are not supplying enough technicians to the industry. The problem isn't just finding technicians but keeping technicians.
We are looking not just at compensation, bonuses or 401(k) plans, but also the work environment. We are looking at leadership and distribution of work. The people you work for can be as important as the pay. Respect goes a long way.
As we build new facilities, I also want to ensure that we provide a good work environment for our technicians.
We'll have air-conditioned service bays. We also will look at what type of service equipment we use and what lifts work best.
How will you distinguish Group 1 from the rest of the service business?
We want to have the reputation as the place to work if you are in the auto industry. Employee satisfaction is important.
Group 1 has 8,400 employees, including about 1,400 technicians and another 385 service advisers. We could use some more.
You may e-mail Donna Harris at [email protected]