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June 01, 2020 12:00 AM

Service business shows improvement

Dave Versical
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    Things are getting better.

    Less than three months after dealership parts and service business began to crash amid the coronavirus crisis, signs are emerging that the worst may be over.

    Figures from 10 brands tracked by Urban Science in Detroit show a sharp falloff in U.S. repair orders beginning in March through the week of April 5, when business plunged 56 percent from year-earlier levels.

    But in the four weeks through May 20, the average decline was 35 percent. And in the most recent week of the four, the drop was 27 percent.

    But as Urban Science's Aftersales Solutions leader Piermichele Robazza notes, there are big differences among states.

    Economic activity, including the number of miles logged in passenger cars, has varied depending on the COVID-19 caseload and the severity of governors' stay-at-home orders. In three states — Massachusetts, New Jersey and Michigan — the four-week average drop-off in repair orders through May 20 was more than 50 percent. At the other extreme, Alaska, Oklahoma and Texas all saw declines of less than 20 percent.

    The 10 auto brands that report their repair order figures to Urban Science account for about 27 percent of U.S. new-vehicle sales.

    Bill Lucchini: Dealer stress remains

    Bill Lucchini, CEO of Dealer-FX, is seeing the same patterns as Robazza. His Toronto technology company compiles repair order data from dealership clients that use Dealer-FX software.

    Despite the improvement, he said, there's still "quite a bit of stress out there."

    "Dealers are in mourning for the 2020 that they could have had," he said. "They're happy that things are improving but looking at a P&L that's not healthy."

    Lucchini points to the stresses of layoffs and drumming up business while implementing new safety protocols and finding ways to reduce face-to-face interaction between staffers and consumers.

    One way to avoid that is to pick up customers' vehicles at their home or office, haul them to the shop for repairs and then return them. Carlisle & Co. of Concord, Mass., has data from four automakers showing increases for each on that front. In one case, pickup and delivery activity from February to mid-April more than doubled to 40 percent of repair orders.

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        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
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        • Google: Google's dealer guidebook helps dealers navigate today's digital landscape
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        • IHS Markit: COVID-19: The future mobility delusion
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        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
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