Chevrolet dealership rebounds under new name and taps high-growth revenue streams
Montebello, Calif.—One of the oldest Chevrolet dealers in the U.S. is Chevrolet of Montebello, formerly Ostrom Chevrolet, opened in 1929, Chris Teague, dealer principal, said.
“We put together a deal with the previous owner and opened as Chevrolet of Montebello on May 1, 2010,” he said. “We chose that name because it is a locally owned dealership, and very involved in our community.”
Teague, whose long-term goal was to own a dealership, said his background includes degrees in business management and human resources, NADA Dealer School, and various auto sales and management positions at other dealerships.
Since taking over the dealership, car sales have increased from under 40 units a month to 250, Teague said.
“Our service business has tripled in five years and our parts department has had double-digit increases as well,” he said.
One of the reasons Teague’s store has had such high sales growth is that in 2010, GM closed several nearby Chevrolet and Buick GMC Saturn dealerships, and even a Cadillac dealership.
“We made a deal with some of those stores to bring their customers over to us, and Ted Eck from the Cadillac dealership is now my general manager,” Teague said. “We even became an authorized Saturn service provider, which really helped us achieve a gain, both in service and in wholesale parts sales.”
Chevrolet of Montebello has also become the No. 1 Certified Pre-owned dealer in Southern California — an achievement that was a goal from the beginning, Teague said.
“We have a great general manager and used-car manager, and the more used cars we sell, the more parts we sell,” Teague said. “Our service department is our No. 1 parts customer, but our used car department is No. 2.”
Teague said becoming a certified pre-owned vehicle dealer isn’t a simple task because GM has a specific set of standards that must be met.
“Certified pre-owned vehicles come with a two-year maintenance program,” he said. “So every vehicle must undergo a 127-point inspection. GM does spot checks to make sure tires and brakes are safe, and we pay a fee to GM to certify each vehicle.”
Parts Manager Zach Schive said every used GM vehicle gets GM approved parts, even tires through the GM tire program.
“We have $21,000 worth of tires in stock, including Goodyear, Bridgestone, Continental, General, BFGoodrich, Dunlop, Hankook, Uniroyal, Michelin, Pirelli, and Firestone,” Schive said.
Schive joined the team in July 2014 after being parts manager at another Chevrolet dealership, and he has started several new parts initiatives, including competitive wholesale parts discounts.
“We’re also rolling out a 10-percent discount program for service customers and a 10-percent discount on accessories purchased through our parts department, for up to two months after a vehicle is purchased,” Schive said.
Teague and Schive also use GM’s tire price-match guarantee program, which has proven to be very successful. Tire sales have increased 458 percent since starting the program, making the dealership No. 1 in the zone.
“We went from 97 units in the first quarter of 2014 to 542 units in the first quarter of 2015,” Teague said.
“If a customer finds a lower price on the same GM-approved tires within 30 days, we will refund the difference,” Schive said.
To ensure the highest level of product awareness and customer satisfaction, parts department personnel attend training classes through the GM Center of Learning every quarter.
Schive said he has two full-time delivery trucks, and access to a third, making deliveries twice a day within a 25-mile radius.
Near-future plans include buying more tire racks to increase tire inventory, building a mezzanine in the parts department, and hiring another parts person, Teague said.
“We currently have $360,000 worth of parts in stock. “But the more parts we stock, the more parts we can sell.”
Schive noted that GM controls what parts are stocked and he must comply.
“Every day, they have suggested parts that I need to approve or disapprove, but I have to stock at least 85 percent of the parts to be compliant,” he said. “However, if a part doesn’t sell in 15 months, they create a return so that part of my inventory is protected.”
Teague said he realizes there’s a lot of competitors out there offering substantial discounts but lacking the personal touch and the fast fill rate his parts department delivers.
“Where we separate ourselves from the others is the level of service we give our customers, and we still have competitive prices,” he said.
“A body shop or mechanical repair shop can’t afford to wait an extra day or day and a half. I guarantee we’ll get you the parts quicker than the big boys will,” he added.
Schive said the dealership’s various marketing initiatives have resulted in a 10-percent increase in parts sales. “We also have an outside sales rep, Greg Dickson, who has worked for us for two years and contributes a lot.”
“Our No. 1 goal is to make sure that every customer is completely satisfied with their experience,” Teague said. “If a customer feels their experience was anything but the best, I want to know about it. I want the opportunity to make sure every customer leaves a happy and lifelong customer.”