Old car, new repair prospect
Experian: Customers will keep cars longer, more dealerships will brand themselves
Dealer service operations, such as Action Nissan in Nashville pictured here, could see a boost from drivers keeping their cars longer.
Photo credit: LINDSAY CHAPPELL
ORLANDO -- Expect consumers to keep their cars longer, requiring more repair work, and expect more dealership groups to follow AutoNation Inc.'s lead and brand themselves.
Those are two trends Scott Waldron, president of Experian Automotive in Schaumburg, Ill., discussed during a press conference here today at the National Automobile Dealers Association convention.
Experian found last year that consumers were keeping their vehicles longer. Waldron expects that trend to continue this year. That means dealers must get better at winning long-term car owners from independent mechanics for repair work, he says.
"As these cars last much longer, there is an increased opportunity to fix the older cars, whereas in the past that sort of fell off the cliff," Waldron says.
Dealers must work more aggressively with first-car owners with long-term loans as well as second- and third-vehicle owners in the service lane to make them feel "like they bought a new car from me," he says.
"They could sell extended service contracts in the service lane or figure out who the customer really is and attract them better through multimedia messages, finding ways to keep reminding them to come in and see you for service," Waldron says.
Waldron says large dealership groups are also recognizing the importance of branding themselves to improve regional market penetration.
"You need to get the brand reputation to do that, so I think they'll continue to brand themselves," Waldron says. "Some of the bigger groups will spend marketing money to do that."
Waldron declined to name which groups he knows will be spending more to improve their branding.
On Jan. 31, AutoNation said it will drop regional brand names on its dealerships and use the AutoNation moniker on most of its 221 stores coast to coast.
Other industry trends seen in 2012 include manufacturers focusing on improved customer loyalty to their brands. Topping the list with the highest customer loyalty are Toyota and General Motors. Waldron says about 47 percent of Toyota vehicle buyers buy another Toyota. For GM that figure is about 46 percent. BMW is at the bottom with 31 percent.
Finally, lenders took more risks last year, but are keeping their risks manageable, Waldron says. And many lenders are issuing longer term loans. In 2008, about 13 percent of auto loans were for 73 to 84 months. Last year that rose to about 16 percent, Waldron says.
"They are putting processes in place to not take risky loans," Waldron says. "It allows more customers to come into the market."
You can reach Jamie LaReau at firstname.lastname@example.org. -- Follow Jamie on