Break the Chains
that Bind Your
Used Vehicle Supply
Chain
Angie Babin
Vice President, Retail Advantage
Manheim
Atlanta, GA
832-656-2275
[email protected]
The views and opinions presented in this educational program and any accompanying handout material are
those of the speakers, and do not necessarily represent the views or opinions of NADA. The speakers are not
NADA representatives, and their presence on the program is not a NADA endorsement or sponsorship of the
speaker or the speaker’s company, product, or services.
Nothing that is presented during this educational program is intended as legal advice, and this program may not
address all federal, state, or local regulatory or other legal issues raised by the subject matter it addresses. The
purpose of the program is to help dealers improve the effectiveness of their business practices. The information
presented is also not intended to urge or suggest that dealers adopt any specific practices or policies for their
dealerships, nor is it intended to encourage concerted action among competitors or any other action on the part
of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service.
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Objectives
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Discover and prioritize gaps in existing used vehicle supply chain operations
Calculate risk exposure and costs
Understand industry-leading best practices
Redevelop back-of-shop operational processes that lead to front-line success
Critical Factors for Used Vehicle Profit Potential
Current State
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Source: NADA
 2016 Actuals: ___________________________________________________________________
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Opportunity for Process Enhancements
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____% manage all wholesale buying activities internally
Source: Manheim Vehicle Solutions Study
Used Vehicle Lifecycle
Wholesale Value Chain
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Quick Math on Acquisitions
Source: KBB Survey of 178,000 cars by VIN for sale at Manheim
Your Primary Focus: Customer
 Save Time
 Fill in ____
 Gain Efficiencies
 Reduce Overhead
 Focus on the _______
It’s a Great Time to Enhance YOUR PROCESS
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ACQUISITIONS
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Market Viability
Historical Performance
Speed to Market
Size & Scale of Sourcing Network
Wholesale Buying Process
 Only ____% are satisfied with your current wholesale buying process
Source: Manheim Vehicle Solutions Study
Market Days Supply
Market Days Supply: Measures market supply and demand of used vehicles based on number of competing
units available in a market, and sales over 45 days
 Top 60 Dealers average ____ days
Source: Analysis of the Top 60 Dealers of Automotive News’
“Top 100 Dealership Groups Ranked By Used Vehicle Sales”
Report
Stocking Tools
Use Stocking Tools to Identify In-Demand Vehicles
1. Know exactly what to buy
2. Know where to buy
3. Buy at the right price
4. Do it all faster
Speaking of FASTER…
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Use Online Channels to Buy
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Acquisitions Opportunity for Process Alternatives
Source: Manheim Product Management & Cox Automotive Centralized Analytics
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Strategic Bidding
 Carefully consider your acquisition budget
 Keep inventory acquisitions at a price point that adequately allows for reconditioning and marketing/
advertising investments needed to successfully retail the vehicles on your lot
Reduce Risk
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RETAIL INSPECTIONS
The Importance of Inspections
• How much time do you really spend on
inspection?
• Who is doing the mechanical
inspection?
• Who is doing the body/condition
inspection?
Best Practices
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What is your max amount of time from receipt of vehicle to Inspection?
How long does an inspection take?
Is someone specifically assigned to Inspections?
How are the inspections planned in advance?
How do you check for recalls?
What should be checked 1st, etc.
Is this on paper or electronically?
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RETAIL RECONDITIONING
Benefits of Retail Reconditioning
 Number of days it takes the average dealer to recon: ____
Source: vAuto
Why Retail Reconditioning
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Dedicated Team
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Separate from customer pay and other work
For example, the CPO 2016 Dealer of the Year has a team dedicated
to certified pre-owned, including a CPO recon manager specifically
assigned that task
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Think CPO
____% of Shoppers willing to pay premium for CPO units
Source: Auto Remarketing
Keys to Retails Reconditioning Success:
 Efficiency/Processes
 High Quality
 Speed
Benefits of Retail Reconditioning
 Enhance vehicle value
 Accelerates sales time
 Supports residual values
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MERCHANDISING
Average number of days for top 20% of dealers = ____
Source: vAuto
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Cost to Market
Cost to Market: The difference between cost to own/recondition vehicle and current retail prices for competing
cars.
 Top 60 Dealers: ____
 Benchmark: ____
Source: Analysis of the Top 60 Dealers of Automotive News’ “Top 100 Dealership Groups Ranked By Used Vehicle Sales” Report
Price to Market
Price to Market: How your vehicle prices compare to those of competing vehicles in the market.
 Top 60 Dealers: ____
Source: Analysis of the Top 60 Dealers of Automotive News’ “Top 100 Dealership Groups Ranked By Used Vehicle Sales” Report
Speed to Market
Tip: If you can’t get vehicles online before leaving the auction, detail them before recon, take pictures and
GET THEM ONLINE!
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TRANSPORTATION
Transportation Considerations
 Full Service
 Self Service
 Internally
Delivery Time
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Average length of time to deliver?
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In Summary:
Keys to Success
 Comprehensive strategy
 Utilizing industry-leading practices
 Efficient operational processes
Translates to:
It’s a great time to enhance your processes!
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