AutoNation 2001 Annual Report Download - page 6

implement best practices concerning sales and contracts-in-transit
flow processing, (2) developing and using a web-based tool to
monitor our dealerships' contracts-in-transit and (3) developing
relationships with preferred lenders who can expeditiously process
our dealerships' contracts-in-transit. During 2001, we improved our
average contracts-in-transit reported days outstanding to seven days
as compared to eight days during 2000.
INCREASE PRODUCTIVITY
The following are examples of key initiatives we have implemented to
increase productivity:
- IMPROVE OUR DEALERSHIPS' SERVICE CAPACITY. We are using our
industry-leading scale and resources to improve our service capacity
with a program to actively recruit, train and retain new service
technicians, who are currently in extremely high demand across our
industry, so that we
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can maximize our service bay utilization. We also have developed and
implemented at our dealerships our proprietary Production Planning and
Tracking System, which is a customized server-based program that allows
us to track each of our service technicians on a day-to-day basis to
maximize productivity and performance. Our dealerships also operate our
team-based Advanced Production Structure service process (APS) in which
small dedicated teams of technicians and customer specialists work
together to maximize service efficiency and customer satisfaction. APS
has led to gains in labor productivity and customer satisfaction in our
service departments.
- USED VEHICLE SALES: We are the largest seller of used vehicles in
the United States. Each of our dealerships offers a variety of used
vehicles. We are leveraging our status as the largest retailer of
new vehicles in the country to develop competitive advantages over
our principal used vehicle competitors and to expand our used
vehicle business. We accept as trade-ins more used vehicles than any
of our competitors, which we believe gives us better access than our
competitors to desirable used vehicle inventory. We also believe
that, as a result of the scale of our new vehicle dealerships, we
are in a superior position to realize the benefits of vehicle
manufacturer-supported certified used vehicle programs, which we
believe are improving consumers' attitudes toward used vehicles. Our
used vehicle business strategy is focused on (1) using our
customized vehicle inventory management system, which is our
standardized approach to pricing and inventory mix based on our
dealerships' established best practices, and (2) leveraging our
scale with comprehensive used vehicle marketing programs, such as
market-wide promotional events and standardized approaches to
advertising that we can implement more effectively than smaller
retailers because of our size. We have also dedicated management
personnel in each of our geographic operating districts to oversee
and optimize our used vehicle operations. We continue to utilize the
Internet to improve our used vehicle operations by providing
consumers an easy-to-navigate means to view our large on-line
inventory of used vehicles.
- FINANCE AND INSURANCE AND OTHER AFTERMARKET PRODUCT SALES: Each new
or used vehicle sale presents our dealerships with the opportunity
to arrange for financing of the vehicle through preferred third
party lenders and to sell an extended service contract, insurance
products and other aftermarket products, such as vehicle
accessories, maintenance programs or a theft deterrent system, some
of which are offered and administered by independent third parties.
We continue to focus on improving our finance and insurance business
by (1) completing the implementation of standardized