Long Chevrolet: Leading The Way In Fleet Sales

Long Chevrolet, reporting delivery of over 7,000 Chevrolets to fleet clients (and the selling of nearly 3,000 retail units) during the 1973 model year, is the largest volume fleet dealership in the nation that is not affiliated with its own leasing company. Estimated gross profits for the dealership during the 1973 calendar year are in excess of $3 million, of which the fleet department contributes substantially. .

And Long Chevrolet's fleet business continues to grow. So much, in fact, that owner Jim Long and Director of Fleet Sales, Don Fenton, have decided to greatly expand the fleet department. This expansion includes new, larger facilities, additional personnel, and a $120,000 computer system to help invoice fleet and retail sales.

Fleet office facilities are being expanded from one general office and four private offices to one greatly enlarged general office plus eight private offices and a customer change. Office space will increase from 1,280 square feet to 3,500 square feet, or almost three times the space. According to Jim Long, there will be at least 10,000 square feet of dealership space allotted specifically for fleet business. The new fleet facilities are expected to be ready by new car announcement time.

Personnel expansion will include the anticipated hiring of three additional account executives whose functions will be to personally service certain accounts as well as solicit new business. The fleet department also has a new truck fleet sales representative, Dick Asmussen. Asmussen will focus his attention on current and new accounts having truck requirements.

Latest addition to the dealership is Sid Mallory, who is in charge of programming and supervising Long Chevrolet's computer operations for the fleet and retail sales departments. Mallory, (now comptroller of Long Chevrolet), is one of the leading experts in computer dealer operations, and was recommended to Long Chevrolet by Litton, manufacturers of the computer.

AUTOMOTIVE FLEET has identified Don Fenton of Long Chevrolet as the nation's number one car salesman as well as the largest volume fleet salesman. It should be noted that there are a handful of leasing; and rental fleet operations affiliated with their own-dealerships presenting what might be termed an "even larger" volume. Long Chevrolet is not connected with any in-house or captive purchaser and serves and sells independently to a variety of industry purchasers.

A new computer room, just recently completed, was built to house the Litton ABS (Automotive Business Systems) 1251. This computer will allow Long Chevrolet to process anywhere from 20 to 1,000 car invoices a day. This procedure includes invoicing and accounting, such as documentation for internal dealership functions (license, tax, title, profits). It will also provide documentation for each individual fleet account. And, in addition, special documentation will be produced when a car is being drop shipped to a dealer. This drop shipment documentation will detail what steps a receiving dealer must take to secure his payment, as well as outline what steps will be necessary to secure license, taxes, etc. for the cars. According to Mallory, never before has there been an attempt to print total information of a car to fleet companies via computer, and to print information by computer for a drop shipment. "This new department will be a strong backup for Don Fenton, so his staff can concentrate entirely on the selling of cars," said Mallory.

The decision to go to a computer instead of adding additional fleet personnel was made with further expansion of sales in mind. One of the basic benefits of the computer system will be the ability of the fleet department to achieve an even cash flow. And this capability can be available during peak periods. Therefore, instead of taking days to catch up on paperwork for the cars, the computer will bill, tax and license hourly as the car is being delivered - eliminating much of the cash flow problem.

Long Chevrolet now has over 16.5 acres of buildings and blacktop space for its retail and fleet sales departments, plus its total service facilities. Some of this dealership lot space is reserved specifically for the fleet department. Cars in this area cannot be touched by the retail sales department, and are usually cars that are sold for fleet sales.

DEALERSHIP'S BACKGROUND

Formed in 1961 as Tom Edwards Chevrolet, owner Jim Long started his Chevrolet dealership with 26,000 square feet of facilities on a two-acre lot. Soon Long realized, however, that expansion of facilities was necessary.

In 1963 he purchased an additional 15 acres, expanding his facilities to 78,000 square feet. The dealership's name was changed to Long Chevrolet in 1970, although the company was always under one owner (Jim Long), and always located at their present address: 320 W. Grand Avenue,

Elmhurst, Illinois. In 1971 Long Chevrolet merged with another dealership owned by Mr. Long, which brought the capital worth of the dealership in excess of $2 million.

Today Long Chevrolet has 100,000 square feet of dealership facilities.

Although Long Chevrolet is in its twelfth year, the fleet department is only in its seventh. Glancing at figures for several three-year periods will help illustrate the expansion of the Long Chevrolet dealership, both in retail and fleet sales.

In 1967, retail sales amounted to 1,800 units, while fleet sales were 1,500. By 1970, however, while retail sales increased slightly to 1,900, fleet sales doubled - to 3,000 units. And by the end of model year 1973, total figures will be close to 10,000, of which 3,000 will be retail sales and 7,000 will be fleet sales. (Of the 7,000 cars sold by Long Chevrolet's fleet department, approximately 2,000 went to daily rental companies; 3,000 were local deliveries; and 2,000 were drop shipments.)

These skyrocketing sales figures for the fleet department show the total commitment of the dealership to the fleet business. Giving credit to Jim Long (owner) and Ed Lynch (general manager and executive vice president of the dealership) Don Fenton says, "Both back the fleet department all the way."

RESPONSIBILITY WITH OWNER

Although a top fleet department obviously needs expert fleet personnel, the ultimate responsibility for expansion and growth of the dealer fleet department rests with the owner. And in this aspect, Jim Long has proved to be wise in setting goals and in analyzing the fleet market.

Several years ago, when Long Chevrolet's fleet department reached a record 2,800 fleet cars, Long felt the department would grow even further, predicting that in a few years the fleet department would reach 5,000 units. Two years later. Long Chevrolet's fleet department hit 4,600 cars.

Close to two years ago the fleet department felt that manually they could not handle the high volume of fleet sales. So Jim Long began to study computer operations and purchased the Litton ABS 1251. He also traveled all over the country, consulting with computer experts, before finding Sid Mallory with Jordon Ford in San Antonio, Texas, to operate the system.

Analyzing the market and the potential of Long Chevrolet, Jim Long and Don Fenton feel that the fleet department can reach the 10,000 to 15,000 mark in fleet sales. In fact, both men agree that with the new model year Long Chevrolet should reach 10,000 fleet sales.  

Working with a consistent dealership is of great importance to the fleet department. As an example, even when the inventory is low, Long Chevrolet's fleet customers still get cars that are needed.

Usually each department can pick from one another's stock, or can pool their stock to be of benefit to both. But problems may arise, as in the case of a hot car. "All manufacturers get a hot car," says Fenton, "and normally dealerships will not sell a hot car to a fleet. But sometimes a dealership has to swallow hard when the fleet department takes the sale. As an example," Fenton pointed out, "take the Monte Carlo, sold at $50 over cost to a fleet, but retail could sell the same car at $650 over cost." (Long Chevrolet's drawable inventory ranges anywhere from an October low of 100 cars to a normal 1,000 units.)

To support a fleet department, a dealership must also have available a certain amount of capital. This is often necessary as a buffer zone on payments in the fleet department because of peak billings, slow payments, etc. Therefore, owner Jim Long has to have bank commitments set up for ready capital when it is necessary to ride through certain tough cash-flow periods.

And due to this total backing of the fleet business, successful results from the fleet department are very evidence with model year 1973, Long Chevrolet will report approximately 40-percent of its net profits from its fleet business.

SEPARATE FINANCIAL STATEMENTS

Long Chevrolet's fleet department has a separate financial statement within the total statement of the dealership. Therefore, all fleet costs are completely identified every month. This way the fleet department, with its committed cash outlay, stands entirely on its own two feet.

In the financial statement, those charges directly assessed to the fleet department are taken from a General Motors dealership financial statement which would include the fixed expenses, the variable selling expenses, and the total semi-fixed expenses. Some of the items would be:

1. Fleet personnel costs (their salaries and benefits)

2. Percentage of dealership costs for rent, heat, lights

3. Taxes

4. All charges related to new car get ready

5. Telephone bill

6. The necessary interest to borrow funds to cover peak periods

7. Travel and entertainment

8. Advertising.

Long Chevrolet's program for fleet sales includes basically four areas:

1. Direct local fleet deliveries

2. Drop shipment fleet deliveries (where Long Chevrolet is the selling dealer)

3. Courtesy deliveries incoming

4. Fleet retail (referral business)

ADVANTAGES OF ONE DEALERSHIP

Recently there has been a trend for large company-owned corporate fleets and leasing companies to seek the advantages of one dealership supplying cars for the company's offices and representatives throughout the nation. Fenton explains that "most of the time it is an advantage for fleets to have one dealership, because the company then deals with a single source. There is a more efficient paper flow, and when buying from one dealer, there is better purchasing economics going to work. Also, the company's fleet budget is predictable, since the firm will know exactly what the car prices are in advance. In addition, this will free the fleet administrator's time to work on such things as operating costs, etc.," he said.

In getting cars for Long Chevrolet's customers, the dealership stresses the ability to handle accounts of any size to provide excellent service, to offer fast availability of cars, and to help in disposing of the car.

DEALERSHIP FRINGE BENEFITS

The best month for Long Chevrolet's fleet business was the month of June ('73), when 905 cars were sold. With these large totals appear certain fringe benefits from the fleet department to the total dealership. These benefits include:

1. Cars in the Chicago area return to Long Chevrolet for service.

2. Parts sales are increasing dramatically due to returning customers.

3. Body shop work is rising due to retail and fleet sales customers

4. New and Used car sales are aided.

How does Fenton, the largest volume fleet salesman, feel about the market today?

"The fleet market is basically untapped," he replies, illustrating several examples of companies that might be fleet customers for the dealership. And it is with this idea of an untapped market that Don Fenton and Long Chevrolet's fleet department searches for new accounts, offering high quality service and personal attention to fleet problems that has become a trademark in Don Fenton's relations with his fleet accounts.

LONG CHEVROLET'S FLEET PERSONNEL

Long Chevrolet's commitment to its fleet accounts is aided by over a dozen full-time employees of Long Chevrolet's fleet department.

Vice President of the dealership and Director of Fleet Sales is Don Fenton, who came to Long Chevrolet seven years ago after working eleven years for Nickey Chevrolet. As director of fleet sales, Fenton solicits all fleet business and is the general manager of the fleet department. He makes outside contacts to all active and prospective accounts and oversees the fleet department's daily financial and administrative operations, remaining in close liaison with the owner of the dealership, Jim Long.

Assistant Fleet Sales Manager is Ernie Lancaster, who initiates orders and oversees daily operations of the department. Primarily, his responsibility is to sell stock to fleet accounts. Other personnel include: Shirley Rupp is in charge of drop shipment and courtesy deliveries. June Levin manages drop shipment billing and expediting operations. Dick Asmussen is Manager of Long Chevrolet's new truck fleet sales department.

Anne Nadler is personal secretary to Don Fenton, and assists the director of fleet sales in customer liaison. Ginny Conforti supervises prompt payments to GMAC, and manages collections from Long Chevrolet's fleet clients. Diane Boyles administrates and bills direct fleet sales. Tom Devine is in charge of local deliveries. Otis Hill has the full-time responsibility of the fleet used car inventory. Bell Ahrweiler is in charge of licensing and titling of all fleet orders. Donna Santoro has a wide range of diversified responsibilities, and is called the fleet department's girl Friday. Otto Jacobsen is in charge of the new car get ready department and the pre-delivery check of fleet units.

Liaison between the Chevrolet Motor Division and Long Chevrolet's fleet department is Jack Flannery, Regional Fleet Account Executive for Chevrolet's Great Lakes Region. Fenton estimated that on 1,000 cars per year, a dealership should gross $150,000.00. "As volume increases," Fenton continued, "fixed expenses usually remain approximately the same. However, the gross drops. So with 7,000 cars, as is the case with Long Chevrolet, we grossed approximately $700,000.00, or $100 a car."

...AND THE FUTURE

The future appears bright for 1974, the year Long Chevrolet fleet department is working for a 10,000 car model year. And Don Fenton explains two things that will help to achieve another year of record sales. "One, more volume will create more dollars, and two, with the Litton system, invoices will be mailed out daily, allowing the fleet department to cut out a large part of their interest costs.

Don Fenton is a charter member and past president of the Automotive Fleet and Leasing Association (AFLA), is an affiliate member of the National Association of Fleet Administrators (NAFA), and also participates as a speaker for the American Management Association (AMA).