Fighting For Business Is Dealer Service Departments

The recession forced numerous consumers to have to hold onto their cars for longer than they’d prepared, which is both a blessing and a curse for dealer service departments, says Wards Auto. Car sales and warranty jobs are down quite a bit (also as the market for auto loan financing), which has prompted dealer service departments to intensify their efforts to market their services to the public. Increases in ad spending – by as much as 30 percent for some dealers, as reported by Wards– carry the hope that the market will begin to show a lot more optimistic returns.

Numerous dealer service departments see short term gains

Consumers who keep their cars for a longer time frame will inevitably run into a lot more situations where auto repair and more extensive vehicle maintenance are necessary. To put it simply, “If individuals keep their cars longer, there is business to be had,” says DriverSide CEO Jad Dunning. AutoMD reports that nearly half of drivers in a recent poll have driven their current cars a lot more than 100,000 miles. The short-term added repair costs that tends to go hand-in-hand with such increased mileage is estimated to be about $ 2,500 per car owner, said AutoMD President Shane Evangelist.

Dealer service departments are predicted to lose out within the long term

J.D. Power and Associates estimate that dealer service departments could lose as much as 20 percent of their expected business between now and 2013, Wards reports. This is also an area dealers have to improve in: keeping their customers instead of losing them. Better customer service is the primary tool dealerships will attempt to use to stop the bleeding. Expanding service to seven days of the week and making contact with customers more often are also some ideas. Pre-paid maintenance plans and upselling extended warranties might also be necessary.

Instead of warranty work, focus on maintenance

Since there aren't as numerous new automobile sales today, it pays to shift from business models that depend on warranty work. Old cars that aren't covered by warranty anymore will need repair and service frequently changing the business model for service departments. Also, expanding dealer service departments’ inventory to include a lot more accessories is a goal dealers like Sid DeBoer of Medford, Oregon’s, Lithia Motors have in mind. He told Wards that he is “frustrated we don’t do better in accessories.” The same chain has a Sacramento, Calif., store that leads the way with accessory sales, so DeBoer hopes his dealership can follow suit.

Sources

Wards Auto

http://wardsauto.com/home/auto_dealers_serious_100513/