1 Thing We're Talking About: Dealers optimistic about fixed ops, Cox survey shows

Fixed operations continue to be a "bright spot" for dealerships, according to Cox Automotive's Dealer Sentiment Index for the third quarter.

Franchised dealers scored the current level of fixed operations business a 65, up 1 point from the second quarter. When asked to describe the future opportunity of fixed ops, those surveyed scored it a 71, up 2 points from the previous quarter.

Scores greater than 50 indicate dealers view conditions as positive or improving. Scores less than 50 mean dealers view the landscape as weak or negative. A score of 50 is neutral.

Cox Automotive Chief Economist Jonathan Smoke said a challenge for franchised dealers is the model of servicing mostly vehicles that are 5 years old or less, that are under a manufacturer's 3-year warranty or that have come off warranty the past year or two. There are fewer of those vehicles out there, mainly because of inventory shortages due to the microchip shortage.

"It takes more work to keep fixed operations continuing to be as busy as it once was," Smoke said. "But we continue to see very positive metrics around how much work is being done per service order. And then, of course, the pricing power that dealers have on both parts and service that are leading to strong revenue gains in average ticket size.

"I think fixed ops continues to be a bright spot for franchised dealers."