Advertising and marketing budgets are sometimes among the first items to get the ax during economic downturns, but that’s not a good approach according to some dealership parts and service operations.
“We’re basically holding steady with our marketing and advertising,” said Bob Himelstieb, parts manager at Stevinson Toyota East in Aurora, Colorado, saying he’s seen past downturns as an opportunity to pick up new business as competitors cut back their marketing.
“Typically, what I’ve seen over the years in tough times is people tend to fix their cars more than actually purchase new ones, so it actually can benefit us in the long run as far as parts sales go.”
Himelstieb said not scaling back his marketing efforts have so far shielded his department from feeling much of a hit.
“We’re still tracking not a lot but a little bit ahead of last year,” he said.
It’s a similar story at Modern Chevrolet in Winston-Salem, North Carolina, where parts manager Ivil Porter said his department is looking for every way it can to trim expenses.
“But we’re not really cutting back on a lot of our marketing,” said Porter, who oversees a staff of 75 employees and a $4 million parts inventory. “We’re just trying to use our GM co-op and other marketing funds as wisely as we can to get the most bang for the buck.”
Porter said he has had to cut into the discount he offers his wholesale customers, and has worked to cut fuel costs by being part of a 20-dealership co-op. But he has maintained the advertising he does for the dealership’s performance parts in motor sports magazines and for its wholesale parts business in a regional automotive trade publication.
Dave Gibson, parts manager at New Century Dodge-Chrysler-Jeep in Lenexa, Kansas, said he has a fairly limited advertising budget, but like Porter is looking for ways to save money other than cutting his marketing efforts.
“Pretty much I’ve held steady with that,” he said. “When you quit getting your name out there, you know what happens.”
Gibson said his parts staff is more regularly asking wholesale customers when they need a particular part so that he can more cost-effectively schedule deliveries.
Automotive News recently reported that Group 1 Automotive, the nation’s fourth-largest dealership group, is placing greater emphasis on service and parts operations to weather the downturn in new-vehicle sales.
“Our fixed operations have been a success story for us,” Randy Callison, the Houston-based company’s senior vice president of operations, told Automotive News. “That is our most recession-proof area.”
Mike Meltebeke, Volkswagen and Subaru parts manager for Timmons of Long Beach in California, said he’s not only maintained his advertising but actually increased it.
“I’ve actually added one more trade publication to my advertising. That investment is paying off.” Meltebeke said.
“Right now, I’m enjoying wholesale accounts actually calling me to see if we will take them on,” he said. “We’ve opened quite a few new business accounts. Last month was one of our best months, and most of that was in wholesale. I haven’t seen a real downturn, and I certainly don’t plan on cutting back on anything.”
Meltebeke said he can understand the tendency to want to scale back marketing in tough times, but thinks that’s generally the wrong move.
“In all honesty, the business is still out there,” Meltebeke said. “I see that those who are energetic about capturing that business will capture it.”
John Yoswick