OCTOBER 2017 IN
RICK ASTER’S WORLD
With cars lasting longer, auto dealers are putting a greater emphasis on auto service. The service department provides the most obvious way to maintain a connection with a customer who may now go 10 or 20 years between car purchases.
In the late 20th century, when the expected life of a car was about five years, auto dealers could persuade their best customers to buy a new car every two or three years. There was a reason to hope that a customer would develop a habit of coming back to the same dealer again and again, conceivably buying ten cars from the same sales representative. A dealer could maintain a customer connection just through the sales function. In this period, dealers openly admitted that the only reason they had parts and service departments was that it was a franchise requirement imposed by the manufacturer.
For the privilege of being able to buy cars from the manufacturer, the dealer had to sell parts for those cars and be prepared to maintain and repair any car the manufacturer made. That didn’t mean the dealer would encourage customers to visit their service department. An auto dealer’s service department might make you wait two weeks for a service appointment. Dealer service might cost 50 percent more than the market rate. The service department was often a forbidding place, with inadequate ceiling lights, dirty floors, the floor littered with boxes of supplies and dusty displays of unsold tires.
That has turned around in the last quarter century. The improvements in dealer auto service are again mainly an initiative of the manufacturers, but dealers are doing more than just going along with the program. The last two auto dealers I visited for service had the floor in the service department every bit as clean as the floor in the showroom.
The biggest change, though, is the increased staff in service departments. With more mechanics in the shop, waiting weeks for a service appointment is a thing of the past. You might have a chance of getting service on the spot if you walk in to a service department. If not, the wait will likely not be more than two or three weekdays.
It’s worth noting that dealers don’t really pay extra by having one or two extra service technicians on staff. There is an extra cost only when a mechanic is idle, waiting for a car to work on. That doesn’t happen often — how often will any auto shop actually have every repair complete? The extra staff makes an enormous difference to the customer, though. The chance that a repair will drag on for an extra week waiting for technicians to free up, all but disappears. There is still the risk of delays in getting parts, but that process too has sped up, and the dealer’s service department will always get parts half a day faster than any other auto service provider. To the customer, the shorter delays mean that auto service has turned into something relatively reliable. It is a big change from what it was a quarter century ago, when I remember having a car in the shop for more than a month.
Dealer service departments still charge about a 10 percent premium, but that is smaller than before and the extra cost is something the average customer might be willing to pay for the extra convenience, along with the advantage of the more reliable repairs of service technicians who work on the same manufacturer’s cars day after day.
It’s a big change, but the dealer isn’t making the change just to improve the customer’s service experience. If you go to the dealer for service once or twice a year, you easily remember the name and location of the dealership. You feel more like a customer there. The next time you are ready to buy a car, you are more likely to think of that particular dealer first. That thought comes much more easily than if you were trying to remember where you bought your last car 20 years ago, then wondering whether the dealer was still in business.
Over the next 20 years the auto industry will be going through the biggest changes the industry has seen in its short history — but recall that 20 years is also the potential life span of a car sold today. A driver who buys a new car in 2017 may be shopping for a completely different kind of car in 2037. A dealer that maintains customer connections by having a service department that customers actually want to visit has a good chance of surviving the upheaval. Other dealers, those that try to get by with an expensive, inconvenient service department hidden around the back with dirty floors and fluorescent lights, will surely be forced to close.
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