A few of the nation’s largest new automobile retailers say the scarcity of latest automobiles is creating extra demand for elements and companies, as prospects maintain their automobiles and vehicles for longer.
In response, dealership teams report that they’re including shifts and growing service hours, making it simpler for purchasers to make their very own service appointments on-line and, as all the time, recruiting and retaining technicians. working additional arduous.
Digital advertising company Hedges & Firm predicts that the common age of automobiles on US roads will attain 12.3 years in 2023. There needs to be completed on these automobiles,” Daryl Kenningham, Group 1 Automotive President-US Operations, says in a convention name.
Houston-based Group 1 reported its second-quarter US elements and repair income of $376.8 million, a rise of 14.5% on a same-store foundation from a yr in the past, the most important of the highest 6 publicly traded new-car teams. Giant share enhance.
For the primary half, the quantity for Group 1 was $724.6 million, up 16.4%. Group 1 refers to elements and repair as “aftersales”.
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Public groups say that with the increase in gross profit per unit for new and used car sales, parts and services more than keep it as a contributor to revenue and profits.
Earl Hesterberg, Group 1 President and Earl Hesterberg said, “Perhaps the most important element of our second quarter results is the very strong recovery in our aftersales business, which has been driving low and facing the pandemic from a variety of lockdown conditions across all of our markets.” Had to do it.” CEO, says in a conference call.
Hesterberg says that Group 1 US dealerships saw an 8.4% increase in same-store gross profit since the second quarter of 2019. Market after sales,” he says.
Kenningham says that as parts and service volumes improve, the group’s dealerships are expanding operating hours and making more and more use of the four-day work week. The group had cut hours and a four-day schedule during the COVID-19 lockdown.
“We see a strong second half for after sales,” Kenningham says. “We are bringing many of our stores back to the four-day workweek. We are almost halfway through it now. And we see that to be able to manage that, it’s important to expand our capacity.”
Across the industry, a four-day week in parts and services offers some significant benefits to dealerships and their technicians. On a four-day schedule, dealerships can add shifts and extend operating hours, getting more work out of the same number of service bays. In exchange for working fewer but longer days, technicians can get more consecutive days off.
In addition to being open longer, the service and parts departments are making it more convenient for customers to make their own service appointments online.
Dan Clara, senior vice president-operations for Asbury Automotive Group, says online service appointments increased 38% in the second quarter compared to a year ago. Also, he says it would be counterproductive to book more appointments without increasing the capacity.
Without providing a specific number, they say Asbury managed to add technicians in the second quarter. “So, the good news is that not only are we becoming more convenient for our consumers to schedule online, but so is the throughput in our stores,” he says in a conference call.
Clara says Asbury is also working hard to retain them by training technicians and creating career paths for tech (pictured, below), “We are primarily focused not only on hiring and recruiting them, but also on retaining them. The most important thing is to develop them from within. The moment you can get an entry-level technician and lead them to a C-level technician, a B-level technician, and finally, a master tech, you’re going to have a tremendous amount of loyalty, a tremendous amount of knowledge. build,” he says.
Duluth, GA-based Asbury reports parts and service revenue of $317.8 million for the second quarter, up 10.1% versus last year, on a same-store basis. For the first half, parts and service revenue was $612.9 million, up 12%.