DULUTH, Ga. -

Pushed in part by opportunities from vehicle recalls and a sizeable gain in reconditioning work, Asbury Automotive Group’s third-quarter parts and service business was thriving.

In fact, its same-store parts and service gross margins increased 2.7 percentage points year-over-year in the third quarter and came in at 60.9 percent.

Asbury pulled in $91.7 million in total same-store parts and service gross profits during Q3, an 11-percent year-over-year rise.

“The year-over-year gross profit improvement continues to be augmented by 30-percent increase in reconditioning work,” Asbury chief operating officer Michael Kearney said in the company’s Q3 earnings conference call, according to a transcript of the call provided by Seeking Alpha, which can be found at www.seekingalpha.com.

“Our customer pay grew 5 percent and we experienced a 17-percent increase in warranty work,” Kearney added.

“Similar to last quarter, we benefited from a couple of recall campaigns during this quarter and as I have stated in the past you can never predict recalls,” he continued. “We believe we can grow our parts and service business in a mid-single-digit range, while maintaining our current margins through our ongoing customer retention programs.”

This very topic was one that Asbury’s vice president of corporate real estate and development, George Karolis, touched on in an August interview with Business Valuation Resources.

According to the “Key Trends Driving Auto Dealership Value” report from BVR, Karolis was asked how dealers can keep parts and services margins strong.

“There are several ways. Dealers can also implement tire and wiper sales programs, even wiper-loyalty programs,” Karolis said.

“Customer relationship management (CRM) tools are important, as are service lane processes, such as getting customers in and out in the best way possible, adequately listening to their issues and addressing them, and seeking opportunities to up-sell.”

Copies of the BVR report can be purchased at: http://www.bvresources.com/bvstore/book.asp?pid=PUB151