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


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 ›

Media Coverage Focuses on Chevrolet Volt Battery Warranty, Pricing

Chevrolet Volt and Li-ion Battery

Buzz continues about the plug-in Chevrolet Volt electric car that is set to reach dealer showrooms later this year. Recent news and corporate statements have focused on GM’s 100,000-mile/8-year guarantee for its lithium-ion (li-ion) battery and on questions about dealer pricing. Mike Omotoso, senior manager of global . . . Continue Reading Media Coverage Focuses on Chevrolet Volt Battery Warranty, Pricing