Los Angeles County last week allowed car dealerships to reopen "for sales with adherence to distancing and infection control protocols."
"Now we have to get invited to the house. We have to earn that," Sullivan, known as the LAcarGUY, told Automotive News Publisher Jason Stein last month on the "Daily Drive" podcast. "We have to do so much of the paperwork and everything previously that it's a piece of cake when we get out there. And, certainly, we can't negotiate anything once there. We deliver the car. We can't talk about gap insurance or something that they forgot."
During the last eight days of April, Sullivan said his dealerships delivered 150 vehicles. His goal, once things return to normal, is to grow the model so it makes up 25 to 30 percent of all sales.
Sullivan, 66, talked with Staff Reporter Lindsay VanHulle about how home delivery has evolved at his dealership group over the past several weeks. Here are edited excerpts.
On what home delivery was like before the pandemic:
We've had a wonderful digital presence for years, but the home-delivery aspect was always very small. I mean, really, almost nonexistent — 15, 20 cars a month. It was really almost one-off. An afterthought, almost, when somebody needed or wanted it. It was not our focus. We've always trained people to come down, get excited, make the purchase emotional.
We were working off a ... model that was old but was successful. ... I was leery [to switch], because we had to convince our guys that this was the right thing to do, but more importantly, we had to convince our guests that it was the right thing to do.
On how his dealerships are setting up deliveries:
We're just communicating online through one of the digital [retail] tools and delivering the car physically. There's usually some phone interaction. ... We try to make it as [much] texting as possible.
I think we'll just get better. These digital tools are going to jump. What I'm doing is going to throw them into another sphere.
On the need for more e-contracting in a home-delivery environment:
If this is going to work and margins will be fine — not better, but fine — this has to be quick and efficient for us, too. The guest wants to get in and out, on and off. OK, so do we. If this is a streamlined process, no one's going to retire on it so we want to get in [and] out.
Efficiency is very important, and so paperwork being done and in the office and communicated with the factory, all that stuff, is hugely important. So that [digital] signing is being perfected as we speak and that will be a big one. We can do all but two [signatures electronically] currently.
On what the post-pandemic future looks like:
The margins are not going up on this process, so we'll have to figure that out. We've got to take a lot of cost out of the transaction to make this model work. This needs to be a staple for us moving forward for very specific reasons.
Say you're selling 100 cars a month. If we're doing 70 [in person] and 30 [online], now 30 people are doing it ... not in the dealership, so that frees up the store to be more efficient, more friendly, bigger for the 70. The 30 gives you kind of additional sales and takes the pressure off of trying to run 100 through F&I.
And now you've got time where, if there's a wait, there's no wait now. It greases the rails to a more efficient operation — a bigger, more efficient operation. It's either a pressure release, which is fine, or extra volume. Either is good.
