Are dealership service departments coming down from the high of a busy spring and early summer? Recent data from the Cox Automotive Dealer Sentiment Index show a dip in how the current level of fixed ops business is viewed by those in the stores.
The third-quarter survey shows dealers scored their service business a 67 (out of 100), down from 74 last quarter. And while dealerships in the Northeast and South reflect a slightly better level of fixed ops business (both gave it a 71), the Midwest and West regions were both down in the low 60s.
To be sure, this is not to say dealers have a negative view of fixed ops at the moment. For perspective, Cox says a score over 50 "indicates more dealers view conditions as strong or positive rather than weak or negative." But this quarter's numbers do show a bit less enthusiasm.
Rick Wegley, an instructor with NCM Associates in Kansas City, said many dealership service departments are struggling.
The shortage of techs, advisers and other personnel — coupled with a scarcity of some parts — has led to a backlog in the service lane and an inability "to meet the expectations we have established for the consumers over the last decade," he said.
"Capacity is an issue, including efficiency, for the majority of stores," Wegley said. "Some of this is compounded by staffing issues, but in many cases the volume of vehicle sales over the preceding years has overrun the fixed operations' ability to effectively handle the demand for service."
While dealerships remain optimistic about future fixed ops business — the 1,100 franchised and independent dealers surveyed gave it a 73, down one point from last quarter — Wegley warns about the many people leaving. He says they are often looking for something more than a big paycheck.
"It is not ego driven, nor in many cases monetary," he said. "They just want to know what they do each day makes a difference."