One of Ken Garff Automotive Group’s latest hires is an MBA with a background in data science and statistics.
But the new staffer will not be in accounting or corporate strategy. Instead, he is working as a dedicated used-vehicle buyer for the Salt Lake City dealership group.
The dealership group is “transitioning more toward the data analyst role” in used-vehicle acquisitions, said Brett Parham, national used-car director at Ken Garff.
The new approach may seem cutting edge, but Ken Garff is not alone. That group’s MBA hire is emblematic of widespread changes happening in retailers’ used-vehicle operations. The next-generation used-car manager is data savvy and has more technology know-how than the used-car managers of old.
Banks: Blend data, experience
Dealers have “been moving toward relying on that expert used-car manager, but now that expert used-car manager has a lot more data that he can utilize to access the right inventory for his area,” said Jonathan Banks, general manager of vehicle valuations at J.D. Power.
Now, instead of used-car managers saying, “Oh, my gosh, spring is coming, I’ve got to buy a ton of inventory. Let’s just go in there and bid away because I’ve got to sell this stuff,” according to Banks, the expert in that role is “doing it more methodically, using data.”
Walser: The role of pre-owned manager has been split up. “We sort of divide and conquer.”
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Ken Garff plans to hire another person in early 2019 to fill a role it’s calling “acquisition analyst.” Acquisition analysts will study the cost to acquire each vehicle in totality, including the wholesale purchase price, auction fees, transportation costs and any anticipated reconditioning costs. They also are tasked with monitoring market-day supply, scarcity and the dealership group’s experience with comparable vehicles, Parham said. Dealership-level used-vehicle managers still have to sign off on vehicles before purchase.
At Walser Automotive Group in Edina, Minn., the role of pre-owned manager has been divvied up. Used-car managers still are responsible for retailing vehicles, but each store also has three or four people dedicated solely to wholesaling. That is because it can be hard for a used-vehicle manager to focus on building inventory, pricing it accordingly and worrying about other various pieces of the used-vehicle selling process, CEO Andrew Walser said.
“You become the doer of all and the master of nothing,” Walser said. Instead, “We sort of divide and conquer.”
That transition for Walser began in earnest about a decade ago, when company leaders realized they could not have just one person handling the various tasks.
Brian Benstock, whose Paragon Honda in New York City is mentioned by J.D. Power’s Banks as an innovator when it comes to used-vehicle sales, said he has a rule for his sales managers: Know the numbers.
That could include traffic on online vehicle detail pages and search results pages, which cars have the lowest market-day supply, where those cars are found and how they can most efficiently be acquired. It’s no longer just about closing the customers who walk in the door — it’s having the right vehicles to offer them, Benstock said.
“You’ve got to be a student of the math,” he said.
Parham: Group turns to analysts
Banks is very much a student of the numbers. Before his J.D. Power role, he worked in a key analyst role at NADA Used Car Guide. And dealers have reached out and casually wondered whether he might want a job in the used-vehicle divisions at their groups, he said.
“They’re looking for more people that understand data and use the tools,” said Banks. “They really are looking at, how do I integrate data to make smarter decisions but also leverage the business acumen I have with my current staff.”
That last part is a key point.
As much as dealers Automotive News spoke with uniformly stressed the importance of market data in their used-vehicle decision-making, they all also said there are attributes that go beyond numbers. In other words, there is still a place for the auction-battled, hardened used-car manager making certain gut-based decisions on the ground — in addition to the next-generation data experts.
“The used-car managers — they love these cars like they’re their children,” said Dave Katarski, COO of Feldman Automotive Group in Michigan. “When you still have that entrepreneurial spirit in the store, you win.”