Wednesday, 17 June 2020 12:34

Auto Dealer Parts Departments Continue to Serve Through Pandemic

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In the last few months, much has been written and discussed within the trade press about how body shops, insurance companies and car rental companies are faring with the business slowdown caused by the corona virus pandemic.

Autobody News wanted to know how the auto dealer parts departments were faring.


Between June 11 and June 15, Autobody News conducted a survey of car dealership parts departments. This included dealers of all makes from Ford, GM and FCA to Mini, Mitsubishi and Tesla, and everything in between.


All responding dealers said they were involved in the wholesale collision business. All except one said they were involved in the wholesale mechanical business. Responding dealers leaned toward being either General Motors or Honda/Acura dealers.


We asked the following questions and received the respective responses.


In March, April and May, was your wholesale collision business (primarily body parts sold to collision repair shops) up or down, and by what percentage?


All except three dealers noted their wholesale collision business was down, some by as little as 15% and some by as much as 80%. The average was a decrease of 45% and consistent with the business losses experienced by collision shops.


Of those that experienced an increase in wholesale collision sales, one dealer could not be reached for comment. Another, a GM dealer in Missouri, noted that a large hailstorm was the cause of the increase.


The third dealer, Richmond Ford Lincoln of Richmond, VA, took a very aggressive and innovative approach to increase sales.


“We took our outside salespeople off the road and had them working the phones five or six hours a day contacting customers to see who was open and who was not and if there was anything we could do to help them out," said Parts Director Roland Chartier. "Then we extended credit from net 30 to net 60 for our large customers.


"The only change we made to our delivery service was to give all drivers face masks, gloves and supplies to sanitize their vans. Customers were no longer required to sign for delivered parts. The drivers asked for names and noted them on the route/delivery sheets. We had some of our larger accounts order large stock orders just in case the supply chain was interrupted," Chartier continued. "When other dealers cut staff or service to customers, we would have our outside sales people work those areas extra hard calling shops and letting them know we were servicing the area. We were able to pick up a few new shops with this tactic. It was hard work and a little luck.”


In March, April and May, was your wholesale mechanical business (primarily mechanical repair parts sold to tune-up shops, brake shops and general repair shops) up or down and by what percent?


Once again, all except three dealers noted their wholesale mechanical business was down. The smallest decline was 5% and the largest 80%, with an average decline of 39%.


One of the three “up” dealers was, again, Richmond Ford Lincoln. The other two were unavailable for comment.


Have you had to furlough any parts department personnel and if so, who?


Sixty-six percent of respondents said they had to furlough at least one person in their parts department. Some had to let multiple people go. This included 13% who furloughed road sales people and 31% who furloughed stock clerks.


Those hit the hardest were delivery drivers, with a 47% furlough rate, and counter people, with a 53% furlough rate; 38% of respondents dismissed both a driver and a counter person. One parts manager noted they cut hours but kept the same number of drivers.

Have you altered your parts delivery service and if so, how?


This was fairly evenly divided, with 49% saying yes and 51% saying no. Fortunately, for body shops, none of our respondents said they completely stopped delivering.


Seventy-eight percent of those who made a change chose to limit the number of delivery runs made per day. A few chose to limit deliveries only to select accounts, one limited delivery by mileage and one limited delivery by dollar value of the order.


One VW dealer in northern California noted, “We were allotted one driver and told to make do.” Several dealers said customers were picking up parts at the dealerships in lieu of a reduced delivery capacity. Some dealers used Uber or a taxi service.


How have your customers responded to changes in delivery policies?


Overall, respondents noted shops understood the situation and were very accepting that business changes were necessary at the dealer level.


One Honda parts manager said that because the shops were operating at reduced capacity, they did not deliver after 2 p.m., and most shops seemed to be OK with that. A parts manager at a California Acura dealer said the shops were just happy the dealership was still open and they were able to pick up parts as needed.


How much trouble have you had getting parts from your primary OE brand during the height of the pandemic?


Respondents said those OEs with the best fill rate during this time were, in no particular order, Honda, Toyota, Nissan, Hyundai, Kia, Mercedes-Benz and BMW.


However, the degree to which other OEs may have had trouble fulfilling dealer orders may or may not have been caused by the pandemic. Civil unrest or other factors outside the control of the OE may have played a factor. Also, parts manager answers may have been influenced by a particular order or two or a particular part or type of part that may have been temporarily unavailable.

Assuming your business has been slow, how have you used the extra time?


Parts department personnel have been using the time to clean up their physical department, check bin counts to ensure inventory accuracy, painting, erecting new shelves and general reorganizing. Some used the time for training. Some updated account information. And some parts managers said with furloughed employees, there was no free time---those that remained were just as busy as before.


Already, people have started driving again and business have started reopening. In view of the events of the past few months, how do you view the future of your parts dept?


  • 33% said: “It will return to its pre-virus levels but will take several months. I expect to rehire my furloughed people eventually.”
  • 27% said: “I plan to retain some of the changes we made during the pandemic and there will be a ‘new normal.’"
  • 22% said: “My parts business has changed little over the past few months. I expect to continue on business as usual.”
  • 18% said: “It will return to its pre-virus levels in a fairly short amount of time. I expect to rehire my furloughed people fairly soon."


One GM dealer in Michigan said, “We are already back to normal. All employees have already returned.”


Do you foresee any long-term negative effects from the pandemic and if so, what?


Twenty-seven percent of respondents said yes, while 73% said no. Several of those that said yes said it will take a long time for people who have been out of work to recover.


A parts manager at a West Coast Mercedes-Bena dealer noted, “I think this will be an ongoing, seasonal issue for a few seasons/years. The collision business will take on the majority of the decline each time.”


An unidentified parts manager from an East Coast Toyota dealership said, “We will see a new way of doing business; COD only---no charges.”


Finally, an Acura parts manager said the last four months had really “put the icing on the cake." He noted that paying for such computer programs such as CCC, Parts Trader and OPS Trax have added thousands of dollars per month to their operating costs. That, combined with other wholesale costs and a steep downturn in business, has simply made the wholesale business untenable.


But rising wholesale business costs and declining profits for dealers has been an issue for 40 years or more. Fortunately for the collision and mechanical repair shops, auto dealers, being as creative and resilient as they are, always seem to find a way to mitigate these business issues and keep serving the automotive aftermarket repair industry.