SAN FRANCISCO – When electric vehicles hit the big time, many auto dealers worry their service departments will take a financial hit.
That concern stems from the fact EVs have simpler propulsion systems, fewer moving parts and fewer parts to replace overall compared with conventional internal-combustion engines.
That means a potential drop in dealership service work when EV sales take off, as predicted. Currently, they make up only about 2% of U.S. market share.
“No doubt service revenue will go down, because EVs contain about 40% fewer parts,” Frederiek Toney, Ford’s president-global customer service division. He gives a keynote presentation “Vehicle Electrification and the Service Impact,” at J.D. Power’s 2019 Auto Summit here.
He extends more than merely solace to dealers. He also offers them a counter plan. It centers on service departments upping their game by delivering superb customer experiences that make people come back for more.
“It all rests with great customer satisfaction,” Toney says. “It is the key to keeping customers coming back. If we can hang on to market share, we can make up for (fewer repair orders).”
EV service work will include brakes, wheel alignments, tire replacements and battery refurbishment, he says. In contrast, things such as transmission work will be nonexistent because EVs don’t require transmissions.
Part of delivering exceptional customer experiences involves the usual checkbox items, such as developing trust and providing price transparency.
But for service departments specifically, it also calls for staffing top-gun technicians and using advanced tools and diagnostic equipment, Toney says.
The equipment is readily procurable for dealers willing to invest in it. But staffing qualified technicians is trickier. That’s because dealerships nationwide face a shortage of those skilled workers.
“It’s a big shortfall,” Toney says. “The industry needs 70,000 auto technicians a year.”
That need requires a call for action to recruit, train, hire and retain more technicians, he says, noting Ford spearheads programs to do that.
Toney calls it a grass-roots initiative that extends to high schools and even junior high and middle schools. Dealers often sponsor the training of young technicians. “The beauty of dealers sponsoring students is that it builds bridges,” Toney says. “We’ve added 2,200 technicians last year. The goal this year is 2,500.”
Virtually every major automaker spearheads technician recruitment and training programs. Still, talent poaching occurs. Toney tries to stay cool about that: “I’m not mad at other OEMs, but you do raid our (tech) schools.”
EVs will grow in popularity, he predicts. Ford plans to offer electrified versions of all vehicles in its lineup, including pickup trucks, he says. “The EV adoption rate is increasing. It literally is the future.”
Consequently, when it comes to recalibrating the service department to generate more repeat business to offset work reductions, “We’ve got to get this right.”