In January, Diamond Hyundai in Palmdale, CA, participated in a national event hosted by the manufacturer to upgrade anti-theft software in some Hyundai models. The dealership offered more to Hyundai owners than just the software upgrade at the event, held at the Antelope Valley Fairgrounds. It also offered a free multipoint inspection.
Though the dealership didn’t try to sell the Hyundai owners on any repairs, service manager Ashley Miller tells WardsAuto that second visits increased 12% after the event.
“We got a big response because we weren’t looking for (attendees) to do anything,” she says.
That kind of extra effort is what dealerships need to do more of to compete against aftermarket service providers, says Leonard Martin, director of automotive retail at J.D. Power. Otherwise, they risk losing customers to the aftermarket.
“Dealers do a great job of selling the car but not selling the service department,” he says.
As we previously reported, the recent J.D. Power 2024 Aftermarket Index Study showed franchised dealerships only came out ahead of aftermarket services in one area: respondents found them more trustworthy, especially in repair areas that require more technology or are complex.
The study involved 10,264 owners, and data was collected online from January through March.
“When it comes to confidence in being able to repair the vehicle, (customers) have a high degree of confidence in the dealers’ ability to do that,” Martin says.
Used-Car Buyers and Introductions
Dealerships should introduce new- and used-car buyers to the service department at the time of purchase, so the customer feels comfortable coming back, Martin says.
“It is probably more important to introduce that used-car buyer to the service department (because) you have a maintenance plan or warranty on the new car,” he adds.
When someone buys a new or used vehicle from Diamond Hyundai of Palmdale, the salesperson takes the customer to the service department and introduces them to the service advisor and the service department receptionist. They also give the consumer the receptionist’s business card, Miller says.
After four months, the dealership’s business development center calls the customer to reintroduce the dealership and remind customers that Hyundai vehicles come with a three-year or 36,000-mile (58,000-km) complimentary maintenance program.
Price is often cited by consumers as a reason to go to the aftermarket.While the dealership does lose some business to the aftermarket, the dealership’s services are competitively priced, Miller says, especially for oil changes. Hyundais use synthetic oil, which is quite expensive in the aftermarket.
Other advantages make dealerships stand out, she says.
“Our biggest thing here is presenting the value of the service side. When you come to a dealership, you are getting a factory-trained technician for your specific vehicle,” Miller says.
Improve That Appointment Time Gap
More than 70% of customers who are currently served by a dealership intend to return to the dealer for service, Martin says.
“The takeaway is, if a dealer can keep them in a portfolio, there is a likelihood they will return” for service, he says.
Once they use an aftermarket provider for routine maintenance items such as tire and battery replacement, however, around 80% say they will return to the aftermarket provider, J.D. Power finds.
One reason is a tough one for dealerships to beat: convenience. There are more aftermarket provider locations. But convenience also has to do with scheduling, and Martin says this is an area in which dealerships must improve.
The inability to get an appointment with a dealership service department in a reasonable amount of time is a consistent complaint, he says.
“Dealers need to solve their personnel issues and figure out how to get customers into the dealerships more quickly,” Martin says.
That aside, however, dealers have “every conceivable advantage (compared) to an aftermarket service provider,” including very nice facilities, pleasant waiting rooms with coffee, snacks and Wi-Fi, the right tools and manufacturer-trained technicians, he says. “But (dealers) don’t talk about it.”
Dealers “need to do a better job selling that service here is a value proposition,” Martin says.
Dealerships must show customers what they offer in terms of trained technicians and manufacturer-certified parts, Engell Pellumbi, service manager at Land Rover of Tacoma (WA), part of the O’Brien Automotive Group, tells WardsAuto.
“You will get more bang for your buck going to a dealership because an independent is only looking at the short term,” he says.
Both Jaguar and Land Rover offer a one-year warranty for any car bought at the dealership, new or used, no matter how old the car is, Pellumbi says.
“Now (customers) have peace of mind,” he says.
Pay Attention to Tires
Electric vehicles wear out tires much more quickly than internal-combustion-engine vehicles because of the weight of the battery and the higher torque. As the number of EVs on the road grows, dealers need to pay close attention to their tire departments, Martin says.
“We are seeing that EV customers are migrating to tire replacement shops for tire needs,” he says.
With so few additional service needs, tires are an important area for dealerships to retain some manufacturers’ portfolios transition to pure EVs, Martin says.
Dealerships “can’t afford to cede this tire business to the aftermarket,” he says. They need to ramp up their (tire-selling) efforts.”
