By Charlie Polston, Automotive Customer Retention & Profitability Consultant, BG Products, Inc.
The holiday season is a wonderful time to reflect on the past year and count your blessings. Let me start by saying, I’m not naive or unaware of the political, religious, or ideological issues that divide us. Ours is not a perfect country, nor are any of us perfect – but there’s nowhere else on the planet that I’d rather live. And, there is no other career path that affords the excitement, variety, satisfaction, and unlimited financial opportunity like the automotive industry – and the best is yet to come!
Let’s review the opportunity that lies ahead of us as we count our blessings:
Vehicles in Operation
There are currently 273.7 million cars on the road in the U.S. That’s the highest car count in history – up over 70 million since 2002. When you consider the average car gets serviced two times a year, that’s over 500 million service visits. What an opportunity to increase your customer base as the VIO grows.
The number of service bays continues to decline. Over 50,000 service bays have gone away, due to dealerships and garages going out of business, in the last 15 years. Service bay count went from 1,217,000 in 2004 to 1,167,000 today.
It is simple supply and demand economics. The supply (of service bays) is down and the demand (of cars on the road) is up. What an opportunity to increase your shop efficiency and facility utilization. You have less competition and more cars needing service. The automotive service business is a robust growth industry.
Last year, $69 billion of preventative maintenance went unperformed. That’s money left on the table. It’s not exactly pent-up demand… but it is pent-up need! My friends, that is over $250 per car of low hanging fruit. Of course, you won’t get all of it; but you’ll get at least a third of it – if you ask.
Dealership Service Share
Last year, dealership customer-pay service and parts sales exceeded $39 billion. That’s the highest ever! While that is still just a fraction of the total $252 billion market, it represents an increased market share over previous years. Time out. Consider the last two statistics: Dealers sold $39 billion and left $69 billion on the table. You could increase your business by 25%, 50%, or even double it and still barely scratch the surface of the untapped potential.
You Eat What You Kill
Most fixed-ops pay plans are performance-based. The more hours or dollars you produce, the more money you make. From techs to advisors to managers there is a financial reward for working harder, smarter, and more efficiently. There are so many dead-end jobs in other industries – where the pay is the same regardless of work ethic or performance. What an opportunity to be able to work harder and make more!
No matter what your education, skill level, or ambition there is a place for you in a car dealership. If you’re a gear head that wants to solve complex mechanical problems, dealerships have a place for you. If you’re a wanna-be gear head, you can start as a lube tech and work your way up. If you aspire to leadership, management, or sales, there’s no better place than a car dealership to fulfill your dreams. If you have an entrepreneurial passion there are opportunities across the nation to own your own dealership. I know several dealers that got their start turning a wrench, selling F&I, or even washing cars.
Making a Difference
Many in the automotive industry have a passion for the environment and “going green.” The quickest way to help customers reduce their carbon footprint is to see that they have a well-maintained automobile. Tires, filters, fuel system cleaning services, and fluid maintenance services are just a few ways to keep vehicles green.
Americans cannot live their lives without safe, reliable automotive transportation. If you truly care about your customers then selling preventative maintenance services is your ultimate noble mission – it is your higher purpose. It is a win-win for everyone. The customer wins through less costly catastrophic failure and you win with an increase in revenue. If you want to make a difference, there is no better way than the automotive service business.
Most dealerships take inventory at years end. It’s a necessary part of your business. Equally important is that you take an inventory of your blessings. I am certain 2020 will be the best year the automotive industry has ever seen.*