At Automotive News’ first Fixed Ops Journal Forum, held Thursday, Aug. 9, in Atlanta, attendees heard lessons on leadership and strategies for recruiting technicians. Other sessions focused on compensation plans, the future of service loaners, improving profitability and the future of parts and service in the electrification and mobility era. A recurring theme: Parts, service and collision continue to account for the bulk of franchised dealers’ net income — but margins will have to be proactively defended in a shifting automotive landscape. -- PHOTOS BY ALISON CHURCH
Fixed ops in focus
Ruth Tomczyk, Esserman International's parts and service director, shared strategies to improve the productivity of dealerships' business development centers. The Miami company, she said, created scripts for operators to follow in English and Spanish. Her team also developed a streamlined process for answering customers’ questions using Google.
Vera Sandiford, DeLuca Toyota’s fixed operations manager, improved profits and efficiency at her Ocala, Fla., store by placing parts department employees along with fast-moving parts on the shop floor with technicians. Saving just two minutes per repair order can boost profits by as much as $5,000 per year per technician, she said.
Bob Cawley, fixed operations director at Horne Auto Group in Gilbert, Ariz., holds regular meetings with his staff, called Process Improvement Groups, where he asks everyone from lot porters to master technicians what management can do to help them work more efficiently. He also stressed the importance of leadership: “If you build your team right, it will last. And, more importantly, your business will run well and consistently without you there.”
Frank Ferrara, retired chief of Hyundai Motor America's parts and service operations and now principal of Traction-Labs, a consulting firm, says dealers can expect a 50 percent drop in gross profit from parts and service over the next five years as electrification and mobility gain momentum. But dealers can replace lost revenue by getting into the subscription business and creating “neighborhood mobility centers” that rely on dealers’ used-car fleets.
Lee Harkins, owner of consulting firm M5 Management Services, said dealers’ No. 1 goal should be to focus on building customer retention — which will improve profits — especially after the vehicle warranty period ends. “You want to be positioned as the vendor of choice. When something breaks, you want the customer to call you. What you have to sell the customer on is that he is smart for picking your store. The highest compliment is when a customer hands over the keys, tells you to do what it takes to fix it and says, call me when it is done.”
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