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Commentary by Dale Pollak

Reinventing fixed ops; ‘Same same’ isn’t good enough

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Article Highlights

  1. 1. Franchised dealerships typically retain only about half of the customers who buy a new or used vehicle from them or visit their service department with no prior experience with the dealership.
  2. 2. The dealerships handle only 30 percent of service work performed each year across the country.
  3. 3. Service and parts department revenue increased about 13 percent between 2014 and 2016, according to the National Automobile Dealers Association. That's in line with revenue increases in new (13 percent) and used (11 percent) vehicle department sales.

Here are three troubling statistics about service departments at franchised dealerships:

1. These dealerships typically retain only about half of the customers who buy a new or used vehicle from them or visit their service department with no prior experience with the dealership.

2. The dealerships handle only 30 percent of service work performed each year across the country.

3. Service and parts department revenue increased about 13 percent between 2014 and 2016, according to the National Automobile Dealers Association. That’s in line with revenue increases in new (13 percent) and used (11 percent) vehicle department sales.

Why are these stats troubling? After all, they show a rise in service and parts sales commensurate with other dealership operations.

And NADA reports that, during the same period, dealers also saw their service and parts gross profits rise by roughly 2.5 percent.

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