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CERRITOS, Calif. — Cerritos Dodge Chrysler Jeep is situated on a 100-acre auto mall in Los Angeles County that includes 27 dealerships and loads of competition in the backyard of the nation's second-largest city.

The dealership shares the same street as stores representing such brands as Nissan, Honda, Toyota and Chevrolet, among others.

So, one way that the store's used-car manager Phil Hahn gains an edge over his nearby competitors is by stocking a little bit of their product that is price competitive.

"I try to consistently have something (from other brands), especially the product that's within walking distance," Hahn told Auto Remarketing in an interview this spring, adding that he gets about 10 to 15 sales per month from using this strategy.

It's just one of the many techniques he employs to thrive in an ever-challenging and ever-changing used-vehicle marketplace.

How Cerritos Works

Cerritos Dodge Chrysler Jeep is one of three stores in Cerritos, Calif., owned by the Browning family, which owns a total of six stores.

The Browning Automotive Group also owns Cerritos Mazda and Browning Acura, which are both located at Cerritos Auto Square, as well. In recent years, the group has purchased Toyota, Honda and Nissan franchises in Victorville, Calif.

Hahn has been with the company for three years, first starting with the Cerritos Mazda before quickly moving over to his current home.

When interviewed by Auto Remarketing this spring, Hahn said Cerritos Dodge Chrysler Jeep had been selling about 160 to 170 vehicles (new and used) per month since late 2009, with sales split close to 50:50 between new and used.

Used sales typically were ranging between 80 and 100 per month, but it had jumped to as high as 115 units.

As far as the best-selling units at the store, it's really a mixed bag, Hahn said, because of the wide spectrum of shoppers one finds in such a large metropolitan area.

"It's so diverse, we sell a little bit of everything across the board because the population is so huge," Hahn shared.

While the story is technically in Los Angeles County, where it draws a large chunk of its business, it borders Orange County and attracts from three different counties in southern California.

"It's also very competitive," he noted. "There's a lot of dealers."

A Return to the CPO Market

As far as certified pre-owned, the store had "scaled back" a bit from CPO for a while, but is back fully in the market and selling about 43 to 45 certified units per month.

"Now we're averaging in the 40s and planning on taking it even higher," Hahn said. In fact, his store sold 54 certified units in April, putting it in fourth place in the region for the month.

Hahn explained that around September 2008 through August or September of 2009, his store toned down their CPO operations because of the significant drop in Kelley Blue Book value for pre-owned units. Essentially, the store could not price competitively enough for the segment. Chrysler also stopped incentivizing CPO, and, "it also had to do with what banks were advancing," as credit was extremely tight.

"It wasn't like we stopped 100 percent, but we scaled it back," Hahn explained, adding, "It was a number of things that made us decide to scale back."

But the market eventually began to settle, and Cerritos gradually got back into the CPO game starting around September and October of 2009.

These days, the store is back in the CPO segment full throttle and certifies 95 percent of its used Chrysler product.

With things more stable, it "makes sense" to be active in the certified segment, Hahn said.

He explained that CPO is a "better product" and a "great selling point for all our salespeople," while also inspiring consumer confidence, something that can be crucial in used-vehicle sales.

"The consumer is just more confident buying certified," Hahn shared. "When they know the car has gone through a 150-point inspection, they're more at ease."

He added: "I always felt strongly about CPO, and now that things have stabilized, it makes sense to stay in the game."

Getting the Word Out

So how does the store help spread the word about what CPO can offer? According to Hahn, the Web is their biggest avenue.

"We're focused so much on the Internet right now," he stated. "That's where we do practically everything."

The team also shares the certified message via radio and print ads to some degree. There is also merchandizing at the dealership with CPO banners.

"It's out there. We push (CPO) with all our advertising," Hahn explained. "We pump it into our salespeople's heads. They're excited about it … and the customer is excited about it, too."

Looking at some of Hahn's Web strategies for advertising his used inventory, he said he spends two to three days per week updating the dealership's site.

The dealership is also linked into a wide array of used-car websites, such as Cars.com, AutoTrader.com, Yahoo and Craigslist.

This helps to generate "a lot of exposure," Hahn shared. He also emphasized the importance of consistently updating listings.

"If you stay on top of it, you get quite a response," Hahn noted.

Hahn said his staff also does a good job at follow-up and staying in touch with customers, without hounding them.

There always is a follow-up call to customers within 72 hours, and the store also strives to make sure it can "make phone calls for a reason," Hahn explained.

For example, there is customer appreciation dinner every six to eight weeks. That gives salespeople — when they call customers to remind them of this event — the chance to stay connected with customers.

Used-Car Challenges

Like many other dealers, finding the right used-vehicle inventory is what Hahn sees as the biggest challenge. It's very difficult to find the "price-point" cars in the $10,000 or less range.

Dealers are "fighting over those cars and it tends to drive the price up."

He added: "You're having to fight it out with a lot of strong buyers right now."

Hahn typically acquires about 10-15 percent — and sometimes as high as 20 percent — from trade-ins. The rest is from purchases, be it from auction, through the Web, rentals or bid sales.

"You have to hit all the different spots. If you're in the right place at the right time, you get the right car," Hahn noted. "You have to keep yourself exposed out there."

One of the techniques he has found to be successful is to buy used cars from other dealers in the area that he knows well. Hahn also leans on bid sales at larger dealership groups and higher-end stores.

"If you go to the right neighborhood, you're going to find the right cars," he added.

Keys to Chrysler's Success

The last two years certainly have been a roller-coaster ride for the auto industry, but especially for the brands that Hahn's dealership bears.

Chrysler has gone through seemingly everything, including drastic sales declines, bankruptcy and reorganization, dealership cuts and all the issues that entails, as well as new leadership.

During the first quarter of 2010, the automaker trimmed its net loss for the period to $197 million and reported operating profit of $143 million. As quarter's end, chief executive officer Sergio Marchionne said the automaker was still on pace to hit it yearly targets, including the target of breaking even.

When asked what the most important key to Chrysler's future success, Hahn answered: "Product. The better the product gets, the (more) they're going to get consumer confidence up and get more traffic in the showroom.

"I really believe they're headed that way," he added. "Of course, incentives are important for consumers, too."

Chrysler not only needs to focus on product, but the quality of product as well.

Hahn suggests there will be "some changes that will definitely be for the better."

At his own store, things have started to get better, as well. He started noticing a traffic upswing as far back as late 2009, but there has really been a "very nice flow of traffic" since middle to late January, Hahn said this spring.

Hahn credits this upswing to increased consumer confidence.

"People are feeling more confident with big purchases," he noted, adding that the store has been pretty aggressive on the advertising front, as well.

And how can Chrysler dealerships like Cerritos help in the cause?

"They have to be aggressive advertising-wise and keep themselves exposed," Hahn shared.

They must also take advantage of a resource the automaker offers dealers to do exactly that: co-op funds available for dealers to use in advertising.

In essence, dealers must generate exposure for their own stores, the OEM and the actual product. 

"That's what it's all about," Hahn concluded.