When leases dried up, Michigan dealer Bill Perkins retrained his staff in the art of retailing

September 03, 2018 01:00 AM

"We didn't have a source for leasing anymore. We went back to the basics and taught our people how to retail cars."Bill Perkins, left, with his son Monte

When the recession hit and General Motors' captive finance company abruptly stopped offering leases, dealer Bill Perkins did what he had to do.

He retrained his salespeople to sell vehicles through retail contracts.

Previously, leasing was virtually all some of them knew, said the president of Taylor Chevrolet, in Taylor, Mich.

That meant bringing in trainers who focused on how to pitch vehicles' features and benefits to shoppers, rather than concentrating on the low monthly lease payment.

"Some salespeople were so used to leasing they didn't know what to do," recalled Perkins, 69, with an ironic chuckle.

At the time, he also owned Merollis Chevrolet, in Eastpointe, Mich., which he sold in October 2017, and Jim Bradley Pontiac-Buick-GMC, in Ann Arbor, Mich., which he sold in 2010. Prior to the recession, 50 to 60 percent of the vehicles were sold through leases at Perkins' stores.

"When General Motors filed for bankruptcy, [GM] pulled in their horns and didn't want to lease cars anymore, they wanted to retail them. We didn't have a source for leasing anymore. We went back to the basics and taught our people how to retail cars."

Bill Perkins

Title then: President

Dealerships: Taylor Chevrolet, Merollis Chevrolet and Jim Bradley Pontiac-Buick-GMC

Where: Metro Detroit and Ann Arbor, Mich.

Survival strategy: Retrained his leasing-proficient salespeople to sell new vehicles through retail contracts and to sell CPO vehicles

While he was at it, Perkins also schooled his sales team about the ins and outs of selling late-model, off-lease vehicles that had been reconditioned and covered by a factory warranty under GM's certified used-vehicle program.

Prior to the recession, some of Perkins' managers and salespeople didn't want to sell CPO vehicles. Certification could add $600 or $700 to the cost of a used vehicle, and the higher price could make that vehicle uncompetitive with others on the lot.

But as new-vehicle sales collapsed industrywide and GM put more emphasis on explaining the benefits and value of CPOs, Perkins' sales staff welcomed the opportunity to have what amounted to another profit center, he said.

As a result, during the heart of the recession in 2010, used-vehicle sales at Taylor Chevrolet totaled 80 to 90 units per month, up from 50 to 60 per month the year prior. Annual used unit sales at Merollis Chevrolet doubled to about 1,000 in the same period, Perkins said.

"They could sell either, but the focus went from new to used," he said.

Rebounding

Though new-vehicle sales were a challenge, Taylor Chevrolet held its own.

In 2009 and 2010 when industrywide new-vehicle sales plunged to their lowest points in recent history, new-vehicle sales at Taylor Chevrolet showed modest but steady year-over-year increases, Perkins said.

Those yearly increases picked up as the industry rebounded.

At Taylor Chevrolet staff were taught to pitch vehicles' features and benefits.

Taylor Chevrolet sold 2,700 new vehicles in 2017, up from about 1,000 in 2010 and 700 in 2005, Perkins said.

At Merollis Chevrolet, new-unit sales grew from about 700 a year in 2010 to almost 1,200 in 2016. New-unit sales slacked off in 2017 as news of the pending dealership sale spread among employees, but he retailed 800 units at the store in the 10 months he owned it.

Perkins bought the Pontiac-Buick- GMC store in Ann Arbor in 2005 with the idea that his son, Monte, who was in high school at the time, would one day take it over.

"It would have been a good market for him," he said of Monte, who today is Taylor Chevrolet's general sales manager.

But when GM filed for bankruptcy protection in 2009 and announced it would discontinue the Pontiac brand at the end of 2010, things changed. Pontiac represented 65 percent of the Ann Arbor store's revenue.

Perkins figured it would take three to five years for the store to regroup. Besides, he had a buyer: the Saturn dealer down the street who was losing his store because that brand was also discontinued by GM.

Perkins said he didn't necessarily agree with some things that happened during the recession but understands that like himself, GM did what it had to do.

He adds: "I wouldn't be where I am today if it weren't for General Motors."