#DealershipService

Car dealerships are a conundrum. For decades, they’ve prevailed despite changes in every aspect of what occurs at a new car dealership. The big question is whether they will continue doing business as they have, or will there be changes to a system that’s out of touch with buyers today?

Marc writes:

Hi. Long-time reader, and have had a past question answered. With all the hype surrounding electrification, there is one aspect I see little discussion about — the impact on the service and parts business. If the majority of profits at a dealership comes from service and parts, what is the impact of no oil changes, etc, and the myriad of ICE parts that electric vehicles don’t have? Jiffy Lube, Aamco, Midas, all done.

The economic implications are huge. Your thoughts?

For a variety of reasons (the post-recession binge finally cooling off is the biggest), new-car sales are down in the United States. One would expect that would hurt the revenue of new-car dealerships. Not so much, it turns out, as dealers have found other ways to generate revenue. Or at least that’s what a Bloomberg report says. But there are caveats that suggest the Bloomberg piece may be generalizing. In other words, maybe some shops are seeing more revenue from more work, but other shops aren’t, even as they get busier, due to other factors.

Traditionally, new-car dealerships have always generated revenue and profit from their service and parts departments – and those departments outshine sales at many stores. So it’s not surprising to see dealers turning to a reliable profit center when sales slump.

J.D. Power and Associates continued its courtship of Buick and Lexus in its latest scorecard for consumer satisfaction with dealer service departments. While J.D. passes out awards around like a teacher giving PARTICIPANT ribbons at an elementary school science fair, its consumer index is a decent way to track automotive trends. In this instance, that trend is continued improvement of American manufacturers. Well, most of them.

Fiat Chrysler should sincerely consider making a large contribution to J.D. Power so it can get out of last place in literally every single category.

Meanwhile, General Motors is on its best behavior with a score of 807 out of 1,000, an improvement over last year by a full 10 points thanks to Buick taking top honors (860 points) and its other brands scoring substantially above the industry average. Buick was followed by Mini, GMC, Chevrolet and Nissan in the mass-market brand rankings.

The secret is out: my intrepid and long(ish)-suffering wife, Danger Girl, is the new owner of Matt Farah’s Corvette. This was my idea, for better or worse. She was all set on ordering a new Grand Sport for the 2017 autocross/trackday season, but I thought that it would be a better idea for her to experience all of the new-Vette-owner rituals (nose scraping, rocker panel ripping, mirror scratching, lurid 130mph backwards-facing exits into Mid-Ohio’s “China Beach”) with a used car. So now she has a “learner” Vette, albeit one with 421RWHP, Pfadt coilovers, a half-cage, and fixed Sparcos.

With just 32,200 miles at the time of sale, DG’s Corvette is still well out of warranty thanks to an in-service date from the (Bill) Clinton administration. (I guess I don’t have to put that qualifier in there any more, do I?) As my wife found out last week, however, having a car that’s under warranty isn’t always a blessing. In fact, sometimes it’s an outright curse.