Puente Hills

2460 WordsNov 25, 201210 Pages
Puente Hill Toyota Puente Hills Toyota (PHT) is a large Toyota dealership which is owned by the corporation Hitchcock Automotive Services. PHT is situated in city of industry, California, about 25 miles east of Los Angeles. PHT offers a wide variety of new and used cars (this is unique in the industry). Furthermore they offer Toyota incentives, service specials, and Toyota parts savings. The annual profits of PHT totaled about $1.8, with annual sales of $ 85 million. PHT had a total of 145 employees. The employees are very valuable to PHT due they are the ones who have to advise the customer, sell the vehicles and repair them. But it is hard to keep them al motivated. As said by Howard Hakes; "It's people who give us our biggest successes…show more content…
Re-checks occur when problems are nog fixed right the first time ( 1% re-check is considered as good) We would recommend no changes in the incentive system for the service technicians. There are incentives for the service technicians to cut corners but this controlled by the PHT management. For example the current re-check percentage of PHT (0.006%) is far below the 1% that is considered as good in the industry. We agree with the statement of Hakes that this percentage must be significant higher if the service technicians actual are cutting corners. Service Advisors Service advisors at PHT receive a fixed salary of approximately $ 2000 per month. In addition they receive the following bonus: * 8% commission customer paid labor * 6% commission manufacturer paid labor (under warranty) * 6% commission part paid on labor internally at PHT So the bonus he could receive are paid on commission, so their earnings are depending on their sale skills. This typically used method for automotive service advisors. We think there a disadvantage of this system that is based on turnover: advisors could also receive bonuses even if the department are not making profits. Bonuses’ that rely on profit don’t have this problem. The service manager: The service manager receives a fixed salary of $ 3000 per month and in addition a bonus based on a percentage of the service department gross profit (before overhead expenses). If he gross profit is above the $ 195.000 the

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