vice(s) your dealership provides. There are many forms of marketing that include direct mail, e-marketing, reward sys-tems for existing custom-ers, drive by traffic and promotions.

Here are a few thoughts to consider: Consumers are over-loaded with information so they put stock into credible sources (friends, family, reputable third party endorsements). Have a plan. Ensure you learn about your au-dience and the most ef-fective way to target that audience. Listen to your custom-ers as they tend to pro-vide the greatest insight to future customers.

We appreciate your busi-ness and look forward to serving you in 2009!

Tax time sure has changed in the automo-tive industry over the last few years. There are a number of other types of businesses that are vying for a piece of the refund (furniture, electronics, home builders, etc). On top of that fact, most re-funds today go right into the consumer’s bank ac-count unlike they did in years past, where in many cases the check would come to the deal-ership to consummate the sale. The following is an excerpt from a survey done by BIG research.

The survey, which polled 9,027 consumers in Feb-ruary 2007, found that nearly two-thirds of con-sumers plan to file in March and close to one in six consumers plan to wait until April to file their taxes. According to the survey, 69.6 percent of consumers expect to receive a tax refund this year. "Many people look at their tax refunds as 'bonus bucks'," said Tracy Mullin, president and CEO of NRF. "Retailers begin to offer

special sales and promo-tions as early as May, knowing that it is hard for consumers to resist spending at least a small portion of their refunds." One-half (50.1 percent) of consumers will be fil-ing their taxes online, and one-third (33.9 per-cent) will be using com-puter software to prepare their taxes. Consumers are continuing to focus on minimizing debt, with nearly half (43.1 percent) planning to put their tax refund toward paying down debt. More than one-third (38.6 percent) anticipate putting some of the money into sav-ings, while one-fourth (26.5 percent) will put the money toward every-day expenses. About 1 in 10 people will dedicate a portion of their return to major purchases (11 per-cent) or a vacation (13.3 percent).

Understanding the con-sumer and the timing of their refund are impor-tant aspects of when and what to market. As the dealership, you’re mar-keting the car(s) and ser-

FEBRUARY 15, 2009 VOLUME 2, ISSUE 1

INSIDE THIS ISSUE:

T A X T I M E C O N T E N D E R S

1

FINE TUNING YOUR MODEL

2

DEALER FOCUS: CITY AUTO WHOLE-SALE

2

DEALER FOCUS: LUXE AUTOHAUS

3

ANCILLARY PRODUCT SPOTLIGHT: ROYAL, HUB, AND OSC OMEGA

4

By: Shane O’Dell, Sr. V.P. of Operations TAX T IME CONTENDERS

www.discoverDSC.com www.discoverDSC.com

“MANY PEOPLE LOOK AT THEIR TAX REFUNDS AS ‘BONUS BUCKS' ,"

SAYS TRACY MULLIN,

PRESIDENT AND CEO OF NRF.

Shane O’Dell

Having been a sales rep for DSC back in the Midwest and then as a General Manager for DSC’s Port-land, OR office, I have had the opportunity to work with many dealerships and have witnessed a multitude of different approaches and perspectives relating to the retail used car busi-ness. Throughout these changing market condi-tions, two dealers in the Portland metro area have set themselves apart to a degree by focusing on and

fine-tuning their existing business model. Interest-ingly, the two dealerships are polar opposites.

Luxe Autohaus (Portland, OR) – high end dealer, mostly top-tier credit cus-tomers, untraditional low-pressure approach, ware-house setting.

City Auto Wholesale (Milwaukie, OR) – Fairly traditional used car lot, excellent visibility, chal-lenged credit customers.

All signs indicate that these two dealerships are thriving in this tough econ-omy. Their audit and re-payment history has been near perfect. They each have earned the loyalty of their employees, and have created a true “business identity” in their respective marketplaces. I thought it would be interesting to inquire with each of these dealers, “How are you managing amidst a reces-sion?”

buy vehicles nobody wants and market them with prices far below other dealers’ prices. For exam-ple, a 2005 Ford Explorer with manual transmission and without a rear seat would be a vehicle I would love to have.

With the increased fees from banks, the very price-

I opened City Auto Wholesale in April 2006, just before the downfall of the housing market, the downfall of the big three and the dramatic drop off of lenders. When we first opened up we tried a few different angles (banks/vehicles/remarketing). I finally settled on One Auc-tion, One Flooring Com-pany, One Reconditioning Center, One Detail Center, and finally One Business Model.

My business model has not changed and is not likely to change. We specialize in challenged credit fi-nancing and maintain that direction. If you feel that this is like beating a dead horse, you are wrong. I

conscious customer and the fact more and more people are losing their good credit standing makes me feel that we will survive this and be able to succeed by sticking to our model and staying the course. (Unless other deal-ers are reading this and switch to this model.)

FINE TUNING YOUR MODEL

DEALER FOCUS: CITY AUTO WHOLESALE BY: MICHAEL BASS, OWNER

PAGE 2 DSC SHOP TALK

C i t y A u t o W h o l e s a l e (Milwaukie, OR) — Fairly tradi-tional used car lot, excellent visibil-ity, challenged credit customers.

By: Garrett Jorewicz, Regional Director of Operations

DEALER FOCUS: LUXE AUTOHAUS BY: SENA MCCARTHY / TIM MICHAELS, OWNERS

factors. You manipulate the levers that you have available to you while keeping your goal to maxi-mize profits in mind.

Control costs by combing your books for bad deci-sions. Renegotiate con-tracts and rates. Stick to your exit plan for stale inventory. Follow every lead until you know it’s dead (it’s not dead until they’ve bought or there’s actually been a death). When you get a loser off the truck, deal with it im-mediately. Spend the time to determine which ad venues are the most pro-ductive, and then spend money on them. Reaffirm your customer service commitment, and make sure it’s communicated clearly to your employees.

If you weren’t complacent during the last boom, you’ve already been doing these things and you’re doing fine. After all, we don’t make the cars we sell, and our COGS is pretty reliably tied to the current retail prices. All we have to do now to be successful is focus our en-ergy on the things that we should be doing all the time.

There’s really no secret to operating a successful used car dealership in a reces-sion. A recession simply makes the principles we should be following all the time more clearly visible.

In a boom, you can afford to pick low-hanging fruit. You can neglect customer service, lead follow-up, and even get lazy in select-ing inventory. There are enough easy sales to allow you to justify letting the harder ones go. Your mar-gins on the easy sales are high enough to subsidize the unproductive, aged inventory that you end up taking a loss on. Sure, you’re throwing money away, but you’re making plenty of it. There's no clear need to actually man-age your business. In a recession, especially one with high velocity, it becomes very clear that those bad habits are un-workable. Many in our industry, even those with decades of experience, are just now learning to man-age their businesses. Man-agement is actually pretty simple: it means that you identify the factors that are controllable, and you focus your resources on control-ling and exploiting those

PAGE 3 VOLUME 2, ISSUE 1

Co-owner, Sena McCarthy

Luxe Autohaus (Portland, OR) — high end dealer, mostly top-tier credit customers, untraditional low-pressure approach, warehouse setting.