October 4, 2018

A new approach to parking for dealerships facing site size constraints

Auto dealers in urban and expanding markets can find themselves facing rising land costs, inventory constrained sites, non-renewable leases for off-site lots lost to development, and overcrowded parking lots that make it hard to exhibit inventory and retrieve vehicles.

As auto dealerships are completely reliant on inventory to support sales and require the space necessary to store service vehicles, site constraints can significantly impact the dealer’s ability to increase sales and to service a larger customer base, thus constricting its ability to grow revenues.

Automated parking systems can increase inventory with both semi- and fully-automated systems that can reduce the overall footprint required for inventory and drastically increase a site’s ability to carry and increase inventory.  Site efficiency gains can also streamline inventory management, increase sales, and provide additional space to store service vehicles.

More Service and Inventory Space

With more parking space, dealerships can not only accommodate more customer cars and eliminate off-site parking, but more of their own inventory. Dealers can show off their full range of models, all in one place, and sell more cars right off the lot with much more inventory on hand.

Additionally, automated parking leaves space to expand other elements of a dealership. The service center, for example, can accommodate more clients. Service centers can also afford to store more parts and equipment with the additional space that such systems can provide at the ground level. The best locations for car dealerships don’t always have a lot of land, and automation allows dealers to fully maximize their current available space.

Economic and Tax Benefits

Accelerated tax depreciation makes automated parking economically appealing. Because parking lifts are considered equipment, they depreciate over a shorter period—approximately seven years—than that of a building. Thus, the returns after taxes are significantly larger, sooner.

Utilizing automated parking systems also offers an opportunity for differentiation and brand recognition, which draws in more consumers and improves overall economics. An additional benefit is that such systems allow for fewer emissions and less fuel consumption.

Automated parking provides car storage systems that keeps your inventory cleaner and protected from harsh sunlight and weather, damage from poor inventory management and employees moving vehicles. It also reduces theft and vandalism. These parking systems offer cost reduction, faster retrieval car times, all coupled with a smart method of tracking inventory.

Dealers are no stranger to on-site damage to new inventory from door dings, bumper scrapes and rim damage that happen because vehicles need to me moved multiple times by employees to retrieve vehicles in stacked lots. Not only are costs incurred from this damage, but additional expense in the inefficient use of employees’ time is incurred and the customer experience is lessened by the burden of walking in hot/cold/wet lots and waiting extended periods of time for the desired vehicle to be found and retrieved.

Automated parking lifts mean a far less chance of damage occurring, streamline vehicle retrieval and will increase employee utilization and improve the customer experience. At the same time, it can reduce the time to close and offer the sales team more time to service more customers.

With automated parking in your dealership, you can achieve a much faster ROI yield and a significant cost savings in operational expenses with a 100% increase in inventory and accelerated vehicle retrieval, which estimates to about a 40%-50% sales increase.

A Case Study

A dealer was planning a 5-level conventional parking structure with cast-in-place concrete slabs. He instead used a system designed by CityLift Parking, omitting the slabs and increasing the parking from five to seven levels using a puzzle rack and rail solution. That lowered the overall height of the structure and reduced the cost per space by over 30 percent.

Designed by Oakland, CA-based CityLift, the structure also improved retrieval time to less than three minutes, with direct showroom access. The owner was also able to accelerate depreciation of our system since this is considered equipment, as opposed to property.

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