Dealerships Rely on Service Business; Single-Point Stores Still Viable

NY Auto Forum Dealer Paneli-CQFWkSW-SThree auto retailer owner/operators discussed opportunities and challenges that lie ahead for dealerships today and in the near future, during a one-day New York Automotive Forum jointly sponsored by J.D. Power and Associates and the National Automobile Dealers Association (NADA) that was held before the New York International Auto Show (March 29 – April 7). The following post features dealer views on service business and the outlook for single-point dealerships.

Moderator: Glenn Mercer, Independent Consultant

Panelists:

Earl Hesterberg, President and Chief Executive Officer, Group 1 Automotive, Houston, TX; the fourth-largest public dealership group in the U.S., U.K. and Brazil (142 dealerships)

Jon Lancaster, Retired Toyota/Lexus Dealer, Madison, WI

Wesley (Wes) L. Lutz, Owner, Extreme Chrysler/Dodge/Jeep, Inc., Jackson, MI

What About the Aging Fleet and Service Work?

Glenn: Moving to the “bricks” side of things—service. As was mentioned in an earlier presentation, the average age of the fleet in the U.S. is something like 11 years. The older model—sweet spot for a dealer was 1-5 years old and the independent aftermarket kicks in at 4-9. Now you’ve got a whole slog of cars that are way out there. Are those lost forever—the 17-year-old car? Or at some point do you think you could claw back this increasingly elderly fleet?

Wes: The whole business model has changed. Ten to 15 years ago we were doing 80% warranty and 20% customer pay. It is now 20% warranty and 80% customer pay. So we are learning as an industry how to approach those customers. For years and years, we didn’t have to worry about those customers. We’d come out with a recall and it was wonderful because our shops were busy all day long. We’re getting better at it and we’re getting more competitive because you have to be competitive today with the price transparency on the Internet. Continue reading ›

Satisfaction with Vehicle Service in Malaysia Improves, Particularly at National Make Service Centers

Mohit Arora

New-vehicle owner satisfaction in Malaysia with service at authorized service centers for the country’s national makes—Perodua and Proton—increases from 2011 with implementation of higher service standards that include explanations of service work and physical inspection of the vehicle before and after service, according to our 2012 Malaysia Customer Service Index (CSI) Study.

Although gaps in service satisfaction still remain, these gaps are narrowing between national and non-national makes in Malaysia. While national makes still perform below industry average, there are remarkable improvements in performance due to a more systematic implementation of activities that have a high impact on customer satisfaction. Overall customer satisfaction in the 2012 Malaysia CSI Study averages 740 index points (on a 1,000-point scale) in 2012, an improvement of 22 points from 2011. Continue reading ›

Study: Dealers Not Pushing “Unnecessary” Service Work

Contrary to popular perception, only a small percentage of auto dealer service customers (7%) indicate that their dealership tried to “sell” them work they felt was unnecessary, according to our 2011 U.S. Customer Service Index (CSI) Study. Admittedly, customer-reported rates of “up-selling” increases as vehicle age increases. Among owners of one-year-old vehicles, only 4% . . . Continue Reading Study: Dealers Not Pushing “Unnecessary” Service Work