Service center boosts Cincinnati dealer’s retail sales

Industry

A Chevrolet dealer who thrived on medium-duty commercial business a decade ago is setting himself up to reclaim that segment with an $8 million service center. But even before his commercial business ramps up, the service center has propelled double-digit sales gains on the retail side.

The 50,000-square-foot center sits on 7 acres about a mile from McCluskey Chevrolet in Cincinnati. It has 50 service bays, six of which were built for medium-duty trucks, and a 3,000-square-foot imaging studio. It’s staffed by two shifts of about 200 employees total, dealer Keith McCluskey said.

New and used vehicles are shipped directly to the center for inspections and photo and video shoots, and trade-ins are taken there from the dealership.

The business development center and Internet, accounting and logistics departments also operate out of the service center.

Retail sales have grown more than 20 percent each of the two years the center has been open, while overall industry sales were relatively flat. McCluskey expects to sell more than 9,000 new and used vehicles out of the Chevy store this year, about a 20 percent increase from 2018. The store soared to No. 12 among Chevy dealers through the third quarter, according to General Motors. It ranked 22nd in 2018 and 30th in 2017.

Before building the center in 2017, “we were limiting our gross going into the future. The automobile business is a very space-intensive business,” McCluskey said. Dealers need space to store and work on cars and trucks, and the center provided an “upside opportunity to acquire and recondition and stock and sell more vehicles,” he said.

It also led to a better customer experience. A dealership that reconditions and stocks many vehicles on-site can get congested.

“Picture 9,000, 10,000, 11,000 vehicles a year getting dropped off at the same location that you’re trying to just simply buy your new Equinox from,” McCluskey said. “All of that extra congestion and the trucks that drop off the vehicles — all of that doesn’t cluster up our main facility. It makes for a much nicer experience and a less congested experience for our individual retail customers that come to our dealership.”

Traditional service, maintenance and warranty work is still done at the dealership. The service department is open until 3 a.m. seven days a week.

Most of the store’s customers at least start the shopping process online, and about 20 percent opt for home deliveries.

The service center improves on those aspects of the business because McCluskey can stock more vehicles and hire more call-center staff.

The setup “allows us to handle and process more leads and more chats and just get the vehicles ready,” McCluskey said. “So that plays nicely into the whole omnichannel side of being able to take care of the customer and harness the power of the Internet and continue to grow the business.”

In 2008, medium-duty fleet sales made up 40 percent of McCluskey’s business, but GM discontinued medium-duty production in 2009.

With the 2019 medium-duty Silverado, medium-duty fleets now represent 10 percent of the store’s sales, a share he would like to increase.

And the service center is equipped for it. It has six bays that are 35 feet deep with 14-foot-tall doors, ready to service medium-duty trucks of any brand.

McCluskey also plans to hire truck specialists who would work out of the center and help grow the business.

Now Chevy is “back with a much better truck, one that was designed with a clean slate from the ground up,” McCluskey said. “We’ve just got to get that word out there and get more and more accounts.”

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