Dealership service departments are on the verge of seeing transformative changes, and those that do not recognize these emerging patterns may face dramatic losses in revenues and missed opportunities.
Currently, new-vehicle dealerships handle only about 30% of service work performed across the country, which represents an enormous missed opportunity not only for additional service revenue, but for building loyalty and long-term customers.
This market share is likely to decrease even more as the auto service industry faces tremendous disruption as smart car tech, connected cars, and the Internet of Things (IoT) change how every automobile will be serviced in the future.
Maintaining or increasing their dealerships’ share of the service business will be dependent on dealers understanding these changes.
Having personnel in service departments who understand collision repair, how to diagnose mechanical problems, and how to replace parts won’t even give you a seat at the table, however. More important will be understanding how IoT will play an increasingly large role in automobile service.
Sensors inside vehicles will be able to communicate directly with the manufacturer or the dealership, which can determine real-time status of components, and diagnose potential failures before they occur—with preventive maintenance therefore becoming much more precise and data-driven.
And with the prospect of self-driving cars, it’s a very realistic scenario that a car would be able to detect such a potential failure, call up the service department, and schedule an appointment for itself, then drive itself to the appointment while the car’s owner is at work.
Scheduling maintenance and taking one’s car in for service will become a much more transparent process for the owner. Service departments will need to be tied in with this emerging technology, and those that offer this capability early on will be the ones that gain a competitive edge.
“Let’s open up the hood and have a look” will be replaced with sophisticated user interfaces that allow the service department to know precisely what needs to be done before the car even arrives at the shop. From the consumer’s perspective, unexpected costs and car repair sticker shock will be things of the past.
Dealers offering this level of predictive service and deep connectivity with each automobile will give themselves a tremendous edge over third-party repair shops.
Mechanics will have much more information at hand through a combination of IoT-enabled networks, internal sensors, and even visibility into the source of each replaced part through blockchain-enabled supply chain innovations.
The latter, for example, is especially important in understanding whether a faulty part is factory original, came from an aftermarket supplier, a junkyard, or is a counterfeit part from a substandard source.
That tie-in will naturally promote a higher level of customer loyalty, as automobiles will be sold with a built-in connection to the service department and continuous diagnosis, smart alerts, and opportunities for proactive maintenance.
In the foreseeable future, automobiles will be more like smartphones, with the vehicle itself being defined less by the steel, and more as a platform for connected apps and services.
IoT-enabled automobiles will enable dealerships to offer a whole new category of services, including predictive maintenance packages, maintenance alerts, and predictive analytics that analyze not only each individual automobile’s internal mechanics, but that of all other cars that are connected to the network as well.
David Gauze is advertising manager of Auto Body Toolmart, a company which has been supplying equipment, paint booths, and tools to auto shops for 30 years.