Jimmy Berg’s Long Island store overhaul addressed big needs in the store he bought several years ago.
By Jon McKenna
That vehicle service generates the lion’s share of profits at most U.S. dealerships is a reality not lost on Jimmy Berg, the president of two stores on Long Island.
A complete remaking of the service department figured prominently in the $10 million reconstruction of Sunrise Toyota, in the town of Oakdale about 50 miles from Manhattan. The project opened to customers last summer with 38 service bays, seven detailing bays and a three-lane service drive. Such improvements might not be visible to passing motorists, but they offer a stark contrast to the tattered Toyota dealership that Berg bought in 2008.
“It was just kind of slapped together,” said Berg, who also runs the Sunrise Chevrolet in Queens and a small MV-1 wheelchair-accessible taxi business. “We had bays in an out building, and customers would have to wait in line and pull under the canopy when we would move a car up. We couldn’t add technicians. We couldn’t sell more service.
“The quality of the service was okay, but we still weren’t giving people the customer service they deserved.”
More Service Lanes Help
Today, Sunrise Toyota uses two interior lanes to line up cars for checks of the wheel alignment, tire tread depth and battery charge (information service advisors have when they sit down to write up a customer) and the third for repair and service jobs. Tire changes, wheel balancing and brake-lift work is handled in a walled-in area in the middle, which also keeps shavings away from the other work areas.
“Now, we can probably get 40 cars in there, out of the rain, the cold, the snow, the heat,” enthused Berg, a veteran dealer who relocated to greater New York City from suburban Baltimore. “The advisors are right there next to the lanes. Plus, we added eight or nine techs.”
As for tooling, Berg, after touring about a dozen dealerships around the country for ideas, opted four in-ground lifts, which reduced worries about ground contamination and allowed room for four additional bays. He invested in new tire-changers, wheel-balancers, brake lathes and other equipment, plus a dedicated locker room and bathroom for the service staff.
“My philosophy is, give them a great place to work with all of the state-of-the-art tools, and they’ll do their job and take care of their customers. Technicians are hard to find in this market, and I think we’ve been able to add a few of them specifically because we’ve built the nicest facility on the Island.”
Repaying The Investment
Great, but what kind of ROI was needed to cost-justify such an investment in service? By his own description, Berg is a “back-of-the-napkin kind of guy” who is building for the long term (his son, Aaron, is the COO). However, he estimated that a 30 percent increase in service repair orders and parts sales, on a consistent basis, would cover the expansion debt apart from any gains in vehicle sales.
So far, Sunrise Toyota already has achieved the 30 percent uptick in daily service ROs, on a same-month comparison basis, he said. Meanwhile, new car sales increased nearly 22 percent last year, which he attributes in large part to more attractive new and used car showrooms and various customer service features.
Cracking The Greater N.Y. Market
Berg, who has more than 25 years of experience in retail automotive, left his role as VP of the Len Stoler Automotive Group in Owings Mills, Md., to take a crack at the greater New York market (“it’s not for the faint of heart”) and his own store. He opened the Chevrolet dealership in 2013.
All told, the Toyota expansion took floor space to 75,000 square feet from 30,000 square feet, on an 11-acre site. At any given time, it may have 800 to 1,000 new and used Toyotas in stock.
Other Aspects Of The Project
Apart from the service drive improvements, the store’s overhaul, designed by local architect Gary Bruno, included:
- Expanded showrooms with 30-foot ceilings.
- Three waiting rooms – one for adult customers, one for kids and one as a quiet area for working while they wait.
- A $600,000 investment in interior and exterior LED lighting.
- A customer café that will open soon and be supplied by a local deli.
“This is a very competitive market,” Berg said of Long Island, which has seven other dealerships, the closest of which to Sunrise is about eight miles in a straight line. “You can’t stay in this business going into the future with an old car facility. You can hang in there and milk that cow until the end, but to really be successful in the future, you need to have a facility that customers are comfortable in and employees are proud to come to. You need to give them nice.”
Berg reports his company sold about 2,800 new and 1,200 used vehicles in 2015, and rang up more than $100 million of total revenue.
Ambitions For Customer Experience
While CSI scores and Google star ratings jumped nicely after the expansion opened in June 2015, looking ahead, he wants to take the Toyota store up a couple of notches more in customer experience. He has added to the new facilities with a couple of flourishes like free manicures at the dealership, but next in line for this year are a complete sales process handled on a salesperson’s tablet and reassignment of cashiering duties to the advisor.
“I want to give the customer the Apple Store experience,” Berg remarked. “I have the facility for it, now I need the technology.”
