Service Centers Face Challenges

By Staff Writer October 12, 2021

Despite current headwinds and market conditions, dealership service centers remain resilient and continue to be among the most preferred service providers. According to the 2021 Cox Automotive Service Industry study released this month, 34% of consumers prefer dealership service centers, a 1 percentage point increase from 2018, and ahead of general repair shops. And while this is great news for franchise dealers, there is still a majority of the market dealerships aren’t capturing - translating to $214 billion in potential revenue.

Dealership service centers are the most preferred because of their existing relationships. In fact, 55% of consumers say it is because the dealership knows their vehicle. On the other hand, dealerships continue to combat the perception they are overpriced and expensive. The top barriers to returning to the dealership are not only cost, but also location according to consumer rankings, all of which makes way for what owners consider easier and more convenient options, like general repair shops. On top of that, nearly 1-in-4 consumers also say their dealership service visits take longer than expected, adding to their frustration.

Exacerbated by the pandemic, service departments cite part delays from manufacturers (58%) and finding or hiring the right technicians (45%) as their top operational frustrations, and both can directly impact the consumer experience, including the notion that service departments take longer than expected. On average, dealerships cite a decline in the consumer satisfaction they deliver, with only 55% of dealers believing satisfaction has improved in the past 12 months (down from 71% when surveyed in 2018). Specific to staffing, 57% of dealership respondents say their service department is not fully staffed, and 80% expect these labor shortages to continue or worsen in the future. The majority (60%) also say the service technician is the top role they plan to grow this year, so there is a focus on investing in this area of the business.

“Despite a challenging marketplace, opportunities exist to better leverage digital tools to deliver on and even exceed consumer expectations, while also offsetting some operational challenges,” said Tracy Fred, vice president of operations for Xtime. “Elevating the entire service experience with a consumer-first mindset and the use of technology can help raise overall profits, capture additional market share and help mitigate the frustrations service departments are currently facing.” 

Dealership service centers offering digital features have a more positive outlook. Of the dealers saying the experience has improved in the past year, they more often offer services like service pick-up and delivery, ridesharing, progress tracking, online cost estimates, mobile check-in, and other digital services.

Car owners particularly want the ability to schedule their appointment online, and it seems the dealer is striving to meet consumer needs there with 74% of dealers offering this option today. Of those owners scheduling online, 91% are highly satisfied with the experience; however, a third of consumers are unsure if their service provider offers this feature, which is consistent with the 2018 Cox Automotive Service study.

Consumers also want to review and approve repair estimates online (67%) and access their vehicle service history (66%), which according to those surveyed are among the most critical digital features a service center should offer and provide an added level of transparency and convenience to the service experience.

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Last modified on Tuesday, 12 October 2021 15:34