Chasing down diagnostic codes
Alameda, Calif.—As Caeser once said, “Fortune favors the bold.”
Through a lucky stock tip from a savvy mobile truck salesman and other personal friends, Eric Quan bought a penny stock that went from 25 cents to $17 a share — it helped bank the launch of his current business.
“I’m pretty good at stock trading and other investment vehicles, so that represented a good portion of my shop property’s down payment,” he said.
Quan’s shop, Engine Works in Alameda, Calif., has since become known for its diagnostic prowess, a passion he shares with his zeal for cars, developed at a young age well before he was old enough to drive: At 13, he bought a 1960s T-Bird; 14, a 1971 Barracuda; and 15? — A 1969 Chevelle. He started his business in his parents’ garage in high school and graduated into mobile service at 18. Those early efforts morphed into his shop today, an all makes/all models, STAR-certified, five-bay shop that reaps $1.3 million in annual revenue with an ARO of $309.
“But that average repair order includes many loss-leader oil change sales,” Quan said, “though they usually generate additional, profitable revenues. If I break out our average of 100 oil changes a month, the number is more like $450.”
Engine Works’ labor rate is $146, which he says is the highest in Alameda, and logs approximately 350 monthly work orders.
“We’re not the cheapest, but we perform higher-quality work and it allows us to select our customers, who are mostly in the upper-middle class demographic. Our strong point is our diagnostics, proper tooling, and programming and updating vehicles, which many shops can’t do, so we also benefit when they come here for it instead of a dealership.”
The NAPA AutoCare Center and ACDelco Professional Service Center shop has the majority of factory scan tools (GM, Ford, Chrysler, Honda, Toyota, Nissan, and VW), as well as its Autel, used often for all vehicles, but is specifically handy for BMW module programming, which Quan says is in the tool’s software and doesn’t require going online.
“We sign onto BMW as part of Autel’s subscription and will upload all the vehicle’s modules, find all the calibration numbers, and we’ll download what we need into the new module. We start with the Autel for everything, then move to a factory tool, if necessary.”
Engine Work’s pass-through box is a Drew Technologies Cardaq M J2534 for many factory scan tools. The shop’s DVOM and oscilloscope are the Vetronix 5100, Snap-on Verus, Snap-on Vantage Pro and a few Fluke-type meters. Other aftermarket scanners include the Launch, Genisys and numerous older versions of scanners collected over the years.
“If I had to pick two tools, it would be the Autel MS908P and the Snap-on Verus, but we are real close to purchasing a picoscope in which case it would surely replace the Verus and Vetronix 5100 as our go-to tool,” Quan said.
Presently, the lion’s share of diagnostics falls to Quan and his service manager, Remmy Gallegos, who receive their core diagnostic training through ATG (Automotive Training Group).
“We train mostly with Dean Parson who usually teaches the class — he is an amazing instructor,” Quan said. “For many years we also used TecHelp, which was run by Doug Mueller, but he has since retired in 2018, and numerous other one-off classes.”
Joining them is a recently hired entry-level tech, who will be trained in diagnostics and electrical.
“From the get-go, he’ll only focus on diagnostics — no head gaskets, timing belts or anything else — using a fully updated Verus and taking diagnostic classes,” Quan said. “We’re going to mold him. He’s a right out of school and is a quick learner.”
Quan attends the AAPEX and SEMA shows every year to see what’s new in the industry and for tool and equipment purchases, which he says are often attractively discounted. This past year, he acquired the ESN2000 ATS EScan with SharpShooter Technology by ATS, and it’s become one of his favorite diagnostic tools.
“It has a unique algorithm that’s great for measuring fuel-trim, catalytic and volumemetric efficiencies. I mostly use it in post-repair for big jobs involving intake service, for example, to ensure charging systems and fuel trim are good to go. It can take awhile for a check-engine light to come on after a repair, so it helps us avoid a car coming back with a MIL shortly after service with an unhappy customer.”
In addition to NAPA and WORLDPAC, Engine Works sources parts from Fast Undercar, which is conveniently located a few blocks away. “They have a rotating carousel of delivery vehicles that are always on the move. We’ll get parts in 10 minutes.”
Quan resists upselling customers, though he recommends BG Products for direct-injection engines to clean valves when it’s warranted as well as other BG services.
“When customers come in for an oil change, we don’t upsell — they don’t like it. We don’t sell anything they don’t need, because we know they’ll come back for other things. It’s a relationship built on trust. It’s also part of our culture to educate them on repairs — why they’re necessary and how they fit into a vehicle’s operation and performance.”
Every explanation is tailored to each customer’s level of mechanical understanding, and photos are taken to illustrate issues that are attached to their work orders (Engine Works uses WinWorks Autoshop Software: “Easy to use, great support when we call, and we know them on a first-name basis, Quan says).”
RepairPal is used to acquire new customers and Demandforce to maintain his present base. He also spends $100 a month on Google Adwords, “which is just enough to maintain our listing spot.” Many service appointments are made on the shop’s website.
From the T-Birds, ’Cudas and Chevelles of his younger years, Quan has presently settled into a Porsche 911 for his daily driver and 2017 McLaren 570 that he hugs the track with on weekends. Further down the road, Quan might consider winding down business to a number of select, top customers, and moving on into kit car and race car specialization.
“It would be a ‘toy shop’ for me.”
At a glance
- Annual Revenues: $1.3 million
- Average RO: $309 accounting for oil changes; $450 otherwise
- Monthly Car Count: 350
- Labor Rate: $146
- Shop size: 4,000 square feet
- Bays: 5 indoor, 1 outdoor
- Staff: 8 total — service manager, service writer, five techs and a lube tech
- Preferred Scan Tools: Autel and Snap-on Verus