DETROIT (Bloomberg) -- Chrysler Group LLC said dealers who set up quick-lube services as part of the company's push to improve customer treatment are doubling their oil-change business in one year.
The faster service is part of the automaker's drive to improve buyers' experience and make the outlets more competitive with independent repair shops, said Pietro Gorlier, CEO of Chrysler's Mopar service, parts and customer care unit.
Gorlier aims to increase the proportion of U.S. Chrysler dealers open on Saturdays to 80 percent by the end of next year from 68 percent now and 60 percent last year. He also wants 80 percent of the dealers to offer express service by the end of 2014, up from 22 percent.
“All of the dealers who've implemented an Express Lane have had incredible results,” Gorlier said. “There is a huge potential that all of the manufacturers, including Chrysler, that we're not capturing due to the competition in the after sales.”
Chrysler dealers are outnumbered 37-to-1 by independent repair facilities, said Gorlier, who took over as Mopar's chief in June 2009. Chrysler has 2,317 U.S. dealers.
Some dealers avoided providing services after sales because they don't make a lot of money from oil changes, Gorlier said.
“You start with an oil change then you move to tires, to batteries, brakes” and to bigger repairs later in the life of the vehicle, he said.
Dealers who offer Saturday service hours increased their service business by 20 percent, said Bryan Zvibleman, a Chrysler spokesman. The Express Lane Service has doubled dealers' oil- change business in the first year, on average. They're selling three times more tires, four times more batteries, six times more windshield wipers and seven times more air filters, he said.
The average dealer makes more money from parts and service than selling new cars because the business has higher profit margins, said Stephen Spivey, a senior auto analyst at Frost & Sullivan Inc. in San Antonio.
“People are keeping their vehicles longer, which you've seen over the past two, three years as the new vehicle market has sort of gone in the tank,” Spivey said. “As a function of people keeping their vehicles longer, they may be paying more attention to accessories, maintenance, things that make the vehicle look better or run better.”
Milosch's Palace Chrysler Jeep Dodge in suburban Detroit began opening on Saturdays about 18 months ago and started a quick oil change service a few months later.
Revenue from non-warranty work in Milosch's parts and service shop in August rose 44 percent from a year earlier, just after the dealership opened the Express Lane Service, said Jim Gentry, Milosch's service director. The Express Lane cut customers' wait time in half to about 30 minutes and eliminated the need for reservations, Gentry said.
The average number of oil changes increased “instantly” and is now about 1,400 a month, up from 600, Gentry said.
“Everybody thinks dealers are expensive, that's the reason they don't come to us, and that we're inconvenient,” Donald Milosch, one of the dealer's owners, said in an interview. “With Express Lube and Saturdays, we're trying to change that image.”
The increased traffic has helped boost the dealership's orders for Mopar parts, such as oil filters and bulbs, by almost 50 percent, Gentry said.
The effort comes as Chrysler CEO Sergio Marchionne plans to take the automaker public, probably in the second half of next year. Marchionne said last month the offering may be “relatively small” and happen in “chunks” so the automaker can establish a base market for the shares.
Gorlier, the Mopar executive, declined to say how much the efforts were boosting Chrysler's revenue. He plans to talk about Mopar's aftermarket products at the Specialty Equipment Market Association's annual convention on Nov. 2 in Las Vegas.
Chrysler, which emerged from bankruptcy reorganization in 2009, is introducing 16 new or refreshed vehicles this year, and Gorlier said Mopar is ready with accessories for those vehicles.
Chrysler historically had been late with after-market parts for its cars, sometimes taking as long as six months to produce an offering, allowing competitors to take business, he said.
“My target is to be right there when the car is launched with almost all of the accessories ready to go,” Gorlier said.