Profitability remains a key concern for Lexus dealers in the United States, many of whom are leaning more heavily on Lexus Certified Pre-Owned vehicles as well as their fixed ops departments to maintain or boost their bottom lines, says Paul LaRochelle, the chairman of the Lexus National Dealer Advisory Council.
LaRochelle, a partner at Sheehy Lexus of Annapolis, in Maryland, says Lexus dealers still miss having an "Escalade fighter" in the lineup, but that the brand is taking steps to fill that and other needs. His Lexus dealership sold about 1,100 new vehicles and 1,200 used vehicles in 2019.
LaRochelle, 48, spoke with Staff Reporter Larry P. Vellequette. Here are edited excerpts.
Q: Sales were largely flat for Lexus nationally in 2019. What was the year like for Lexus dealers?
A: I think what we were able to do is, as we've done in the past and as we did in the recession, we were able to really all balance our operations. A lot of us are getting more actively involved in the Lexus Certified business. We have a tremendous program. So between used sales and new sales at almost all dealers being a 1-to-1 ratio, it's balanced out.
We've continued on as most, so even being in a flat year, I would just say that the [units in operation] count is still healthy. Therefore, the service and fixed ops business has been a primary driver in the overall growth of the dealership and the profitability of the dealership.
I think the key point is just the way we've all balanced our operations to make sure that every department is getting its fair share, whether it's the sales up front, new or used, the finance end of it or the fixed ops end of it.