Truck Dealers Upgrade Technology

By Neil Abt, News Editor

This story appears in the April 9 print edition of Transport Topics.

Listening to Pam Hall describe her new building, you could mistake it for a cutting-edge technology company. 

“It’s an all-wireless shop. We have a lot more computers. There are computer stations for drivers in the lounge,” she said.

The description might conjure up images of her working at Google or Microsoft, but Hall was discussing improvements at the new Hall Volvo GMC truck dealership, which opened in February in Tyler, Texas.

Hall, general manager of the dealership, was among the truck dealers who told Transport Topics they not only were prepared to withstand the drop in new sales this year but also saw the new vehicles with more expensive and cleaner-burning engines as providing additional revenue opportunities.

Many said they were investing in upgraded technology, equipment and amenities to meet the expectations of an increasingly sophisticated customer base.

Retail U.S. truck sales declined nearly 20% in February from a year earlier, after a 3.5% drop in January, Wards Communications reported. At the same time, truck orders were about 25,000 through the first two months of the year, compared with almost 90,000 last year, according to ACT Research.

Despite these declines, and predictions that sales could drop 40% for the year compared with record sales for 2006, Bob Mitchell, owner of Kenworth of Alabama and Mississippi, is more than upbeat: “From the dealers’ point of view, the prospects — especially with parts and service — are better than it has ever been.”

“The slowdown we have is not hitting us by surprise,” said George Grask, the owner of the Grask Truck Group, which includes Cedar Rapids Truck Center and Quad City Peterbilt in Iowa, and the chairman of the American Truck Dealers. “We have known for a number of years and planned accordingly for it.”

For Hall, whose husband, Gerry, is a former ATD chairman, that planning included building “a dealership that would match the technology of these trucks.”

She called her old facility “a dark building with bad lighting” that was “not good for the employees or the customers.”

Besides improved lighting, the new location has larger doors and more service bays. Technology upgrades include increased electronic tracking for technicians, allowing them to input or retrieve customer histories more quickly and to better track parts, which has reduced traditional paperwork.

“We won’t sell as many [trucks], but with the increased capacity in parts and service, we are pretty comfortable with 2007,” Hall said.

Tom Thayer, the dealer principal of International Truck Sales of Richmond, Va., said he had previously considered upgrades for his dealership, which was in a 1954 “vintage” building downtown. However, he found “it wasn’t worth the investment because we couldn’t get everything out of it.”

His viewpoint changed after moving the main dealership into a larger building north of Richmond in 2005 and opening a parts-and-service unit to the south to complement its leasing operations, still located in the “vintage” downtown building.

Previously, customers would have to find a place to park and then come inside, Thayer explained. Now, a better-designed building with covered bays allows technicians to come to the customer, equipped with better software and computers to begin immediately diagnosing the problem and to give price and time estimates.

Awaiting the drivers inside are a large-screen television, wireless computer access and showers.
He added he was using the technology for a more personal reason.

“I used to be right on top of everything,” he said, “but the new building is so big and spread out, it’s a lot harder to do.”

During a presentation at a recent BB&T investors’ conference, W.M. “Rusty” Rush, chief executive officer of publicly traded Rush Enterprises outlined how technology was helping to strengthen North America’s largest heavy-duty truck dealer.

“Most dealership owners . . . can’t cover a . . . customer that has a large base across a large network,” he said. “Anyone who gets work done with us . . . you’re a Rush customer. If you have a problem anywhere on the road, our people can automatically punch it in, see what we’ve got and take care of that problem on the spot.” 

Last month, the company an-nounced Martin Naegelin Jr., its chief financial officer for 10 years, was promoted to executive vice president and would oversee the installation of a new software operating system linking the company and its network of truck dealerships.

Mitchell, the Kenworth dealer, said his company’s expansion plans for the past decade were developed “with the idea in mind that more and more customers wanted out of the maintenance business.”

“It is hard for dealers to keep up [with the new engine technology], making it almost impossible for anyone but the very large fleets to keep up,” he said.

He told TT that customers were telling him that if his dealerships could “take care of their needs with modern, updated facilities . . . [these fleets] would likely get out of the [maintenance] business.”

Mitchell opened a dealership in Birmingham, Ala., earlier this decade and is building another in Mobile, Ala.

Mitchell said he is adding scanners at his dealerships to cut down on paperwork from repairs and orders.

“It is a pretty tough thing to do,” Mitchell said of that continuing transition.

Ronald Remp, third-generation owner of Wheeling Truck Center, a Volvo heavy-duty and GMC medium-duty truck dealership in Wheeling, W.Va., said cyberspace has become an important part of his company’s strategy.

He said the number of serious sales inquiries through his dealership’s online advertising and through its Web site has started to rival those made to its toll-free telephone number.

This discovery was among the reasons the dealership earlier this year launched VolvoChrome.com, a Web site devoted to chrome and truck accessories.

Remp said it was already generating “a lot of business,” even though at the time, the company was still improving the site’s search functionality and overall appearance.

“The customer base is become more sophisticated,” and this site was part of a “new thought process on how we can generate more accessory sales,” he said.

Meanwhile, Frank Ellett of Virginia Truck Center, composed of four Freightliner dealerships, said his immediate focus has been on training and education, rather than additional technology.

He said his salespeople have been receiving extensive training on the new models and that his technicians had been working with 2007 engines for many months.

“A one-on-one talk with a salesman is much better than what [customers] can get on the Internet,” he said. “They need to talk with people who have been there and done it.”

At the same time, Ellett’s company Web site has extensive inventory listings. He said most of his dealerships’ operations have been electronic for several years.

ATD Chairman Grask shared similar sentiments, saying that communication with customers remains a key to dealers’ success and that they “do not need a different game plan” to be successful in 2007.
But he also cited reasons why he believed dealers should review their operations.

“A dealer’s need to invest in technology is not only an investment in its customer base, it is also an investment for the very real shortage of technicians,” Grask said.

He said dealers have to do a better job “selling the industry as exciting and high tech. It is clean — it’s not as greasy as it is thought to be.”

Looking beyond 2007, Grask said he expects more choices of Web-based applications tailored for dealers “that make things easier and quicker, and offer real-time savings to truckers.”

For example, Grask said, more advanced bar coding could make buying trucks and parts “like going to the grocery store.”