Steve Bassett, President. General Truck Sales
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1 Steve Bassett, President General Truck Sales
2 Steve Bassett, President General Truck Sales Second generation dealer principal Two locations: Muncie, IN and Toledo, OH Approximately 60 employees in each location Muncie: Volvo Trucks and Isuzu franchises Toledo: Mack Truck, Volvo Trucks and Hino franchises Volvo Trucks Dealer of the Year for 2006, 2010 and finalist for 2013 Twice nominated as American Truck Dealers Dealer of the Year Volvo Trucks Dealer Council Chairman
3 Suggested Topics 1. What impact have emissions regulations had on our business? 2. Have alternative fuels been adopted by customers? 3. How have demands of customers changed post CSA/HOS? 4. How has floor traffic changed in the past year? 5. How important is service absorption and how do we balance this vs. the need for increased investment in sales? 6. Has there been a change in the age/mileage of trucks in the service department? 7. How severe is the technician shortage? 8. What are truckers/companies telling us about their business?
4 What Impact Has Emissions Regulations Had on Our Business? Technician training OEM product introductions Customer purchasing cycles Increased customer frustration and downtime Dealership costs Shifted focus to fixed operations Increased truck costs and complexity Fewer low mileage used trucks available for resale TT1 Body Shop repair costs increase
5 Slide 4 TT1 Tina Thompson, 9/23/2014
6 Have Alternative Fuels Been Adopted by Customers? Which comes first the chicken or the egg? Sales Dealerships will adapt as they see demand and infrastructure Hot topic... little action Service As diesels become more fuel efficient will alternative fuel adaptation slow?
7 Natural Gas TAIL WINDS Fuel savings per mile Operation cost reduction Long term price gap between diesel and NG Energy independence Regulations / Compliance Sustainability (Green Marketing) Budget planning on more stable fuel prices 80% part commonality to current diesel engines Least CO² of fossil fuels HEAD WINDS Cost of technology (upfront cost of new NG product) Payback period drawback for some segments Reliability / Durability Maintenance & Facilities Modification cost Infrastructure Technician knowledge and ability
8 How Have Demands of Customers Changed Post CSA/HOS? Increased fleet size Increased service business due to better preventive maintenance Turn around time critical On time delivery requirements and penalties harder to achieve
9 How Has Floor Traffic Changed in the Past Year? This year vs. last year Lease and rental traffic Increased lending institution demands coupled with marginal balance sheets
10 How Important is Service Absorption and How Do We Balance This vs. the Need for Increased Investment in Sales? High absorption is critical to consistent dealership profitability Balance of gross profit across all departments Importance of diversification
11 Has There Been a Change in the Age/Mileage of Trucks in the Service Department? Numerous trucks being overhauled and extensively refurbished Glider kits under scrutiny California impact New SCR technology = higher fuel economy Today s less EGR allows for pre-2004 emissions engine efficiencies
12 How Severe is the Technician Shortage? Doctor? Lawyer? Diesel Mechanic? Disappearance of shade tree mechanics Techs today need vocational and technology training Retention is key
13 How are We Combating the Technician Shortage Identifying and hiring the right technician Testing Training path is vital Average cost to dealership for one Master Tech $35,000 - $50,000 Vocational schools Muncie location 22 technicians, 11 are graduates of vocational schools Volvo OEM DATE Program (Diesel Advanced Technology Education)
14 What Are Truckers/Companies Telling Us About Their Business? Companies Fuel economy is king Longer trade cycles Reliability Filling short term needs with rentals Drivers/Owner Operators Family Time Regulations jeopardize profitability Owner operators are purchasing trucks via trucking companies
15 What Else...
16 Dwell Time Priority Shift Price Quality Turn Around Time OEM Remote Diagnostics & Geo Fencing Importance of triage
17 Automated Manual Transmission FUEL SAVINGS OF UP TO 1.56% OVER AN UNPRODUCTIVE DRIVER Safety Driver Recruitment Driver Retention
18 Trucks Are Bellwethers of Economy Declining truck sales activity indicates strong headwinds Increasing truck sales activity signifies a brighter outlook
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