Renovating and Rebuilding Three Dealers’ Service Departments

Many dealers are currently upgrading their service departments, and throughout the process of upgrading, different dealers must deal with many decisions and challenges like construction, provider selection, manufacturer requirements, and more.

In Houston, Texas, Mossy Nissan moved into a totally new service department about a year-and-a-half ago. To say the new facility was an upgrade is an understatement. George Navarro, service manager at Mossy Nissan, compared the two, saying, “They’re like night and day. [Moving into the new facility] was like moving to Beverly Hills.”

While upper-level dealership management made decisions regarding the structure of the service department, Navarro helped make decisions regarding things like lifts, garage doors and flooring, and he took a practical approach to how he made decisions. “Prior to building [the new department], there were a couple of things we looked at, like garage doors. We did a little homework on certain items, and so when the building came, we asked for those items.”

While Nissan mandated things like the colors of work benches, the manufacturer didn’t require the dealership to work with particular vendors, so Navarro reached out to several area dealerships that had recently remodeled or rebuilt their service departments. He visited multiple stores (including Nissan, Porsche, Toyota, Mercedes and Honda stores) to look at the equipment in their service departments and ask questions.

He spoke to other service managers and asked what they liked and didn’t like and what they would change if they had the chance to do it again. “Everybody was pretty frank and honest amongst the dealerships. We were able to get a lot of feedback from the other service managers and other dealerships that had done a rebuild or upgraded equipment that we were interested in,” said Navarro.

When making the decision on flooring in the new department, he was considering tile and epoxy paint. He discovered in his research that the price of both types of flooring was comparable, so he wanted to learn about the durability and maintenance of each type. As a test, he painted one stall in the old service department with epoxy paint. Ultimately, he decided on tile flooring. He explained, “It’s a whole lot easier to replace one tile than it is to epoxy paint an area, where you actually have to move people out of the way. Once you start rolling out epoxy paint, it takes a while.”

One area Navarro didn’t have much say in was the service customer waiting area. “That was heavily controlled by Nissan … Granted, our waiting rooms are far better now than what we used to have … We have a TV area. Next to that is a sitting area, and now we even have a bar-type area which also has a window that looks out into the shop.”

While one might assume an upgrade means an expansion, such is not always the case. The former Mossy Nissan service department was larger because the dealership previously had an Oldsmobile franchise. The new facility has 35 bays, compared to 46 in the old one. However, the space doesn’t feel smaller, explained Navarro. “In that 46 stalls, we were much more cramped … There is a lot more room between each stall versus the old. It almost seems larger even though there’s less space.”

Another noteworthy change in the new department was a vast improvement in working conditions thanks to a little air conditioning; in the old building, there was none. While in some states not having air conditioning would be tolerable, it was especially difficult in the heart of Texas. From May to October, Houston’s average high temperature ranges from 81 to 93 degrees, according to “In the old shop, by two o’clock, the [technicians] would be drenched in sweat and drained,” said Navarro. “Now when you see them at two o’clock, they look clean and aren’t tired.”

The new service department, which was part of a manufacturer-driven rebuild of the entire dealership, has instilled pride in the employees. He said, “I think it’s human nature. When you get new things, you tend to take care of them. You have a little bit more pride in it, so as far as the wellbeing of the shop and of the whole dealership, everybody takes ownership of it a little bit more.”

Out west in Delano, Calif., another dealer is preparing to begin a manufacturer-driven remodel of his dealership. Manny Sedano, dealer of Delano Chevrolet Buick GMC, said some of the things in the service department that will be remodeled include the service drive, service customer waiting area and service advisor offices. The renovations are expected to begin in April or May.

The dealership is being remodeled according to General Motors’ facility image program, which Sedano said is requiring him to do the exterior and interior remodeling. “We don’t have the new Chevrolet look. We’ve got to acquire that exterior look. Then we’ve got to tear out the flooring, ceiling and offices, build a service advisor office, [do a] parts department upgrade … They need to have certain tiles, certain colors, certain logo branding … We have a list of vendors that we have to use … that are approved by GM.”

According to a GM press release from February 2012, “The facilities image program is part of a larger General Motors initiative called Essential Brand Elements – a cooperative program that rewards dealers who voluntarily meet customer experience standards. The standards consist of a completed facilities upgrade, extensive sales and service training and other customer experience standards.”

Sedano chose to participate in the program, and said generally speaking it’s not “cumbersome,” adding, “I think that the only part that is [cumbersome] is the fact that you have to remodel if you want to participate.” As a part of the Essentials Brand Element (EBE) program, he said GM provides assistance to dealers who participate. “You get money back for every car you order, so as you order cars, you earn that money, and that money can go to offset the cost of remodeling.” While he’s not sure what the cost of the entire remodel will be, he estimated it to land in the $700,000 to $1 million range. He said, “There’s a lot of money going into it, but there’s a lot of money coming out of it too. It’s a great investment.”

Another recent investment of Sedano’s was a new service department at his independent dealership, Sedano Auto Group in Bakersfield, Calif., about 40 miles away from the GM store. The independent dealership and its service department used to be on separate lots a few blocks apart, but when he moved the sales department to a former Suzuki store in July 2011, he decided to build a new service department on the same lot.

The new service department was built in about six weeks and has been in operation since October 2011. “We built it from scratch. The place is not huge; it’s 1,900 square feet. It’s got five working spaces now, three big doors, and you can go one-car deep into it, but it’s all modern, stucco-exterior block walls and some aluminum.”

At the new independent dealership, the service advisor office is housed in the main building along with other management offices, and the service department itself is in a detached building behind the sales building. One aspect of the new department he’s not wild about is the flooring, which has an epoxy non-slip coating. “We did a non-slip floor, which is a mess when the techs need to clean up the area. It’s not a good idea to put in. … The water, oil and everything just stays there, so if you try to mop it up, you’re just smearing it all over the floor,” said Sedano.

When it came to choosing which vendors to work with for the new service department at Sedano Auto Group, he hired a contractor. As for the service equipment, he’s still using much of it from the old shop but had to purchase a couple more lifts, brake lathes and compressors for the new facility. For those, he relied on the same vendors that equipped his old department. In total, the new service department cost $145,000.

Generally speaking, the new location at the independent store is seeing more service business; however, the type of business has shifted. Now, the independent dealership primarily services vehicles of past customers and new sales customers, while walk-up traffic has decreased. Sedano speculated that more walk-in traffic visited the old service department because it looked more like an independent service shop not affiliated with a dealership.

Ultimately, he’s happy with both sales and service in the same location, saying it simplifies things. “[It] helps people to be more aware of what’s going on in the shop … Now everybody’s housed in the same facility, so it’s a lot easier to check on and hand the sales customer over to service department,” he said, adding that when the two departments were separate, it was “almost like running two businesses” even though it was technically one.

Another dealership with new digs is Basney Honda in Mishawaka, Ind. Originally built in the 1980s, the time had come to revamp both the sales and service departments. Parts and Service Director Fred Barclay said, “The service department definitely needed to be improved.” The dealership had outgrown the old shop and was due for some upgrading.

For one, the dealership was still washing cars by hand, so management made sure one addition to the new service shop was a car wash. In addition to providing time savings, the dealership can now offer complimentary car washes to sales and service customers.

Another vast improvement in the new department was heating and air-conditioning. Through the winter, the mantra used to be, “Don’t open the doors unless you absolutely have to,” said Jay Basney, new car sales manager at Basney Honda. “The days of sweating in the summer and freezing in the winter are over … the techs are loving it.”

A couple of express service lanes and bays were also part of the rebuild, and since the new facilities opened about a year ago, walk-in traffic has increased. “We service about 110 to 120 walk-in customers’ cars every week on top of our normal appointments. The quick service is a pretty big deal for customer convenience,” said Barclay. He added that service business on the whole has increased by more than 30 percent, which is in part attributable to the fact that the new facility has more bays, allowing for more work to be taken on.

When rebuilding, management was thinking “green.” The service department features water hydraulic lifts instead of oil, a heating system powered by recycled oil, and motion sensors on doors and lights to help with climate control.

In addition to thinking green, management at Basney Honda thought local. All bids put in by vendors wanting to be a part of the rebuild were reviewed by management, and special consideration was given to local companies that had done business with the dealership in the past, said Basney.

This was possible since Honda didn’t mandate which companies the dealership could work with. “Honda wanted things done a certain way,” said Basney, “but we got full reign on who we wanted to use. Honda sent a couple of guys from California for the drawing of the plans, but that was really about it. They recommended things, but we did get final say-so.” He said things related to branding, like the required Honda blue and corporate labels, were in the initial approved plans. “All the service techs got new tool boxes that were Honda blue and built-in to all match. That was a $100,000 add, but it looks really nice.”

In total, the new dealership cost $4.5 million. While Honda didn’t provide any direct financial support to help pay for the rebuild, the dealership got an additional 234 new Hondas for the year and could take 20 to 30 a month until the agreement was satisfied. Of the new service facilities, Basney said, “We’ve come a long way … It’s about as good is it gets.”

Vol. 9, Issue 4

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Jennifer Murphy Bloodworth

Jennifer Murphy Bloodworth

Senior Assistant Editor

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