With all the bad news we hear from the new car dealer front, there is some underlying news that should make independent repair shops and their suppliers stand up and pay attention. The car dealers that are left and surviving are expanding their service centers, offering “all makes” programs and going after new customers. These surviving dealers are seeing service department growth that is, on the face of it, absolutely startling. I recently read about one dealership tripling its service department volume.
Holy cow! Many independent aftermarket suppliers and shop owners must be thinking those dealers are eating our lunch as they take that business from us, the independents.
But are they “eating our lunch,” or just eating other car dealers?
In 2008, the National Automobile Dealers Association (NADA) reported that more than 1,000 new car dealers closed. In California alone, 23 dealers have disappeared since January of this year! Nationwide, at least 2,000 are expected to close by year’s end. Think about it. Every time a dealership shuts down, the service center abandons hundreds, perhaps thousands, of loyal customers. Where do those customers go? Who do they turn to for vehicle repair, service and maintenance? The most natural place for them is another new car dealer. So the car dealers are developing “all makes” programs to care for those abandoned vehicle owners. I recently read about a closing dealer who actually referred the customers he abandoned to his other dealership — one selling different make vehicles — for service work.
I would argue that the current explosive growth in new car dealership service departments is not so much at the expense of our independent repair shops, but more likely the pursuit and capture of what I’ll call the “abandoned” vehicle owners of a closed dealership.
So, what’s the business opportunity of your lifetime?
Those abandoned by the more than 2,000 new car dealers predicted to close in 2009. Nearly everyone will abandon their service department customers, leaving them wandering, looking for someone like you to service and care for their vehicle. And those independent repair shops who capture this new business will need a steady stream of aftermarket parts to make their business a success.
In fact, there are many independents having their best business years ever. They are already converting some of the “abandoned” into their customers. Shop owners like Vic at Vic’s Precision Automotive in Texas, who report more than 20 percent sales growth every time I talk to him. Or Jim at Dykstra’s Auto Service in Michigan, who opened his second shop right in the middle of this recession and has done so well, that he’s now planning his third.
The independent repair shops that offer good value may get some of the “abandoned” through referrals. But the independent repair shop that will get most of those wandering customers, will be the shop that targets and focuses on the “abandoned” this year. As parts professionals, you need to seize on this opportunity. When a dealership closes in your area, it’s a good bet that new business should come your way. This is an opportunity to reach out to your best independent repair customers and let them know you’ll be there to provide all the parts they’re going to need. Communicate your ability, reputation and knowledge.
Make the recession of 2009 the business opportunity of your lifetime.