U.S. new-vehicle sales fell 14 percent last year, and many dealerships suffered greater declines in states where businesses were locked down because of the pandemic, temporarily idling sales.
That shifted more pressure to service departments to pay the bills and keep the lights on, and it made fixed absorption — the ability of fixed operations to cover a dealership's expenses — more of a priority for many managers.
"Fixed absorption guarantees they're going to be in business tomorrow without the need to sell new cars," Bob Atwood, a management instructor at the NADA Academy, told Fixed Ops Journal. "One of the things we've learned during the pandemic is that service is the backbone of the dealership. Not the back end, but the backbone."