If the recent automotive news tells us anything, it’s that sales are slow – and change is fast. Automakers and dealerships are navigating declining demand, while at the same time managing shifts in consumer expectations. They’re also searching for ways to speed the sales process and streamline service department functions. Recently, in fact, new events are taking shape that may create additional revenue and customer service opportunities across the dealership.

So, while the story of sales may not be great news, the industry’s movement toward more efficient operations is exciting and promising. On the service side, new marketing opportunities and additional revenue streams are emerging, all directly or indirectly related to technology innovations now coming to the fore. Here are a few service-related headlines:  

Vehicle Subscription Plans Might Become a Boon for Fixed Ops

What: You’ve undoubtedly heard the news about vehicle subscription programs. From all-makes platforms like Fair, to automaker-specific test programs operated by Ford, Cadillac and Volvo, it’s an idea that is gaining popularity – especially at the dealerships. Indeed, there are already a few dealers who are operating their own subscription program to further monetize their inventory. According to Automotive News, that includes service revenue, as well.   

Takeaway: The article outlines ideas that dealers can try in order to create a revenue stream from a subscription program. One such idea for dealers is to base a service drive subscription program on reconditioning best practices. The value is due to the dealer’s access to historic vehicle data.  Additional ideas include adding fees for repairs and warranty work.

Go here: Vehicle subscription plans create fixed ops opportunities for dealerships

Top Global Sellers: Can You Guess the Top Ten?

What: Okay, so most people already know that the Ford F-Series truck is the best-selling vehicle. And many would probably guess that the Toyota Corolla is also on the top five list of the global popularity. But did you know the popular Nissan Rogue is in the top five? It’s true. And here’s another surprise: The Toyota Camry didn’t crack the top ten. The list is published at MSN and is based on 2018 global registrations from JATO.

Takeaway: Counting vehicle sales around the globe shows trends in terms of consumer preferences, and in how automakers are responding to an array of market pressures. At the dealership level, it can also provide a signal as to which vehicles consumers will be most interested in buying, and what service managers might see more of when it comes to maintenance and repair.

Go here: The world’s best-selling cars of 2018

Your Friendly Lyft Driver Might Be a Great New Source of Income

What: According to Automotive News, there are currently around 4 million rideshare drivers bopping around cities and suburbs. That’s a lot of Lyft and Uber business, to be sure – and it’s also a great opportunity for dealerships. Consider, for example, that while most vehicles are active just four percent of the time, rideshare vehicles ring the bell at a robust 26 percent. The Automotive News post figures that this type of use equals six times the required maintenance.

Takeaway: If you’re not already marketing to ride-share drivers, seriously consider doing so. Obviously, their income requires consistent maintenance and repair on an accelerated schedule – and that makes them an ideal customer. If you build a solid service relationship based on complete, fast and affordable service, chances are they will return many times.

Go here: Drivers for ride-hailing services can be a prime source of fixed ops profits

Winter Blues Expected to Creep Into February Car Sales

What: Edmunds is forecasting a gloomy February for new vehicle sales, thanks to a 2.2 percent decrease compared to February 2018, and an estimated seasonally adjusted annual rate (SAAR) of 16.7 million.  On the bright side, sales improved over January 2019 by over 12 percent. Edmunds analyst Jeremy Acevedo sees it as a subtle drop and a “good barometer of the gradual sales decline we expect through 2019.” He cites the growing cost of purchase, such as interest rates, as a main reason for the slump.

Takeaway: After almost a decade of record-breaking growth, the auto market seems to have settled into a gradual sales decline, driven by higher cost and perhaps the availability of late model used vehicles. Regardless of the reason, service managers are becoming bigger VIPs inside the dealership, with a mandate to streamline service operations, and improve efficiency throughout the department.

Go Here: February Foretells Slower New Vehicle Sales in 2019

Summer is almost over. And it would seem the years of ever-increasing new car sales are also coming to an end, which means service departments will soon be more vital than ever — a fact that underlines the need for an effective operational plan.

Here are three headlines that show just how much things are changing:

How’s Your Technician Retention Plan?

A report published by Automotive News has showcased the current acute shortage of technicians. Simply put, it’s already a problem — and it’s getting worse as older employees retire. The numbers tell the story: According to automotive research firm Carlisle & Co., retirements in the coming years will create a shortage of up to 25,000 positions. 

Why it matters: According to the National Automobile Dealers Association (NADA), there’s an average of 19 techs per dealership, so this is a critical issue. Dealers can change the culture of the service drive to reflect a customer-focused, technology-driven approach to communication and workflow operations. That will appeal to tech-savvy Millennials.  Management will also appreciate the efficiency gains and younger recruits will feel at home in an environment that uses mobile devices.

New Car Sales are Down – Is it Time to Worry?

New vehicle sales lost ground compared to the first half of the year, but that doesn’t necessarily mean customers aren’t interested in purchasing vehicles. Demand is softening and consumer preferences are shifting toward larger vehicles. Case in point: According to Reuters, July passenger car sales dropped, but SUVs and trucks generally increased.

There are also signs the used car market is heating up. In July, the Manheim Used Vehicle Value Index reported that used sales reached a 39.2 million SAAR. That’s the best figure since 2012.  

Why it matters: Any decline in new car demand is noteworthy. As competition increases, the entire dealership operation needs to operate at higher levels, especially fixed ops. Given this sort of volatile market, dealership managers should focus their time and resources on profit centers such as the service drive.  

New Technology is Good, but Iteration and Refinement are Better.

All the recent talk about autonomous vehicles has made it seem that no one will ever have to drive again.

Or not.

Broad adoption of self-driving cars is still years away. Autonomous leaders like Waymo are expanding their testing, taking things slow, learning and racking up miles. Why? Consider this recent report published in Automotive News: almost 50% of consumers surveyed said they would never buy a fully autonomous vehicle, and 85% said drivers should always have the option to take the wheel.

Why it matters: With their lives potentially hanging in the balance, consumers are thinking twice about handing the steering wheel to a “robot.” And that’s not a surprise. Disruptive innovations require ongoing development, testing, and refinement to provide reliable products that deliver lasting benefits. Waymo and its peers are dedicated to developing a technology-driven solution that meets a clear need.

In much the same way, dealership leaders should scrutinize service technology in terms of what how it meets evolving customer expectations…and how it fits into the overall technology footprint of the dealership. How does the service experience you deliver align with customer expectations? Does it provide a transparent and personal approach to customer service needs? Most importantly, if your technology is meeting today’s needs, is it also being constantly improved to meet tomorrow’s needs? Technology that’s not keeping you one step ahead will just be a part of tomorrow’s problems.

How Can Dealer-FX Help?

At Dealer-FX, our mission is to help automotive brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

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