The recession has forced consumers to hold onto their cars for longer than they had prepared, which is both a blessing and a curse for dealer service departments, says Wards Auto. Automobile sales and warranty jobs are down quite a bit (also as the market for auto car loans), 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, according to Wards– carry the hope that the market will start to show more good returns.
Dealer service departments may see short-term gains
Consumers that end up keeping their cars for a longer time period will inevitably run into a lot more situations where auto repair and a lot more extensive vehicle maintenance are necessary. It was simply put, “If people keep their cars longer, there is business to be had,” by 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 go hand-in-hand with such increased mileage is estimated to be about $ 2,500 per automobile owner, said AutoMD President Shane Evangelist.
Dealer service departments are predicted to lose out in the long term
J.D. Power and Associates think that dealer service departments could lose as much as 20 percent of their expected business between now and 2013, Wards reports. This is one more area where dealers are trying to improve, keeping customers instead of losing them to non-dealer shops. Better customer service and a lot more competitive pricing are the main tools dealerships will attempt to use to stop the bleeding. In addition, expanding service to seven days per week and making more frequent contact with customers are popular ideas. Upselling extended warranties and pre-paid maintenance plans may also be necessary.
Rather than warranty work, focus on maintenance
It pays to shift from a business model that depends on warranty work as you will find fewer new auto sales today. Older cars not covered by warranty likely need service and repair, defining a new 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 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 for the article
Wards Auto
http://wardsauto.com/home/auto_dealers_serious_100513/
No comments:
Post a Comment