My Business model idea...

[LexTech]

I posted earlier and introduced myself. Id like to go into a little more detail of my ideas and a little more about myself.

 

Im 37 years old, ASE master certified with L1 certification. Was previously a Master tech with Toyota, I moved to Lexus almost 3 years ago. I am now the Master Diagnostic Specialist at the Lexus dealer I work for now. Have been working in the Toyota/Lexus dealers for just over 10 years now.

 

I have been very disappointed at the level of customer service my dealer has been giving our customers. And also in the attention (or lack there of) that the dealer has been giving to the Lexus side of the service dept. We are, like alot of others, a combo Toyota/Lexus dealer. But we have become the black sheep of the dealer. But I wont go into all those details here. And in my opinion, it is getting harder and harder to make a living as a flat rate dealer tech. (with Lexus anyway). We are seeing alot less customer pay repair and maint work and more warranty work. The cars are becoming more maint free so in response it seems they keep trying to push all of the "extra" maint items to the customers that our parent company Valvoline has available. Like the fuel induction services, a/c system deoderizing and cleaning, fuel aditives, trans additives...etc... Not that there is anything wrong with those products, (I know they have been discussed in other threads) but in a dealer, when the sales dept sells the new car and talks up how low the maint costs are now, than the customer comes back for service and we are ramming all these additives and services down there throats (because the service writers get spiffs for selling them) the customers seem to respond in a negative way. So in turn, our customers are going elswhere for maint. I could go on, but I think Ill stop for now.

 

Like alot of other people out there, I know I can treat these customers better and give them excellent service at a much lower price than the dealer can. My idea certainly isnt original. In fact, one of the reasons for wanting to do it on my own more now is the fact that I have seen poeple do just the same as I am thinking, and are doing pretty well.

 

I want to offer an alternative to the dealer for Lexus owners, Toyotas will also be in the picture, but for the most part it will be aimed at Lexus customers. I know it seems to be the opposite thinking of most independent shops, most people would say that specializing in only one car line is much to limited, and the way to go is to work on everything. But with todays cars getting more and more advanced and harder to diagnose, it seems like a major headache, not to mention investment, to have to learn tham all. I really love the product, and I love the philosophy that lexus had in the beginning. Its what made them such a success. But they are going farther and farther away from that.

 

I would be located near enough to the Lexus dealer to have access to parts. I will use moslty factory parts. Charge less than the dealer. Lexus (and Toyota) have a very good support system with the TIS system that is available to the aftermarket (for a fee of course). Itt has all of the factory repair manuals, EWD's etc.. and alot of other support info.

 

Lexus may be a luxury car line, but our customers are really starting to pay attention to the cost and value of what they are getting for their money. A good example came in today. A 2010 Lexus RX350 came in for its 15,000 mile service. Lexus recently changed the service interval for oil changes to 10,000 miles on vehicles that use 0 weight oil. So this car was getting a tire rotation, new keyfob battery, clean the cabin air filter, and over inspection. Total cost of the service was just over 350.00.... Not to mention if the keyfob battery was to fail within the basic warranty period, it would be replaced for free under warranty. (5 years- 50,000 miles) But we charged them $4.50 for the new battery at 15k miles.... Im amazed they even came in for that......

 

Could you offer that service at a lower price using factary parts, and still earn a profit?? Its a no brainer.

 

I know the product, I know what the customers expect and deserve.... Why not?

[xrac]

You need to find out how many Lexus owners are in the market you would serve and estimate how many of those cars you could service. Also look at the size of your local market and the area you can draw from. I know that Car-x says that a successful franchise requires a market of at least 80,000 people to draw from. Don't forget the the dealership uses new car sales, used car sales, warranty work, and regular service to cover overhead and make the location profitable. You will only have service. My personal opinion is that a business that will focus on just one brand is too narrow. I know some that have succeeded by focusing on foreign cars, or focusing on Eurpoeans, but not just one brand unless it was a sports car like a Vet. But then I can be wrong.

[Dan Winter]

Obviously there is a lot that goes into a successful business plan, but a couple of things in your post concern me.

 

First, although I believe you may be able to use factory factory parts, charge less than the dealer, and be profitable, lower price should not be your focus. Even in today's economy, price is way down on the list of customer concerns with auto repair. Value is another story. You need to know what your cost of operation is in order to determine your pricing structure. If your less than the the dealer, that's fine, but I don't think that should be your focus.

 

Specializing is another subject altogether, you will start out that way, but if you are successful, your customers will undoubtedly own other brands that they will want you to work on as well. And especially during start-up or slow times you will be temped to take on other lines as well. Also not a problem if you are willing to tool up and make sure you have access to the technical information you need.

 

Good luck to you, I admire your desire to offer a better level of service to the vehicle owners in your area.

[CARMandP]

Like you, I worked 11 yrs for a Honda dealership. I was hoping to go into business just working on Honda's. Man would that have been nice. You may find it easier to specialize in Asian imports. If you can work on Toyota/Lexus, you can easily work on Nissan and Honda. Also, if you are not doing side work you better so you have a good following of people to help you start your business with.