[asphaltgambler]

Automotive service shops, especially small independent places face a serious challenge. I believe it is far more than just current economics................….What I know, I'll share.

My brother occupied the service manager's position at a large Hyundai dealer in the early to late 90's. Hyundai was struggling in the American market selling an average of 100,000 units in 1995. While the service and parts side was doing well, sales were flat and not meeting expectations. This was largely due to an overall inferior product line in the previous generation.

To 'reverse' that perception, especially here, they came up with 10 year / 100,000 mile bumper-to-bumper warranty. That was set in motion in '96 with a lot of advertising and support.

By the end of that year that cost them a LOT of money - but tripled sales. Further by then they had a decent product, decent engineering and execution.

My brother and I had a conversation about this just prior to public campaign. I said " Well ……..this is the beginning of the end for COD service as we have known it"...…………………………………….and sure enough it has come to fruition.

The next blow was when BMW launched their new line-up in 2003 where all service items were now 'CBS' or condition based service. So then anything mileage / time related as a reference for servicing like: 30K, 60K, etc. is now out the window. So you really could not sell services to the customer based solely on hard use and / or mileage. BMW had 'upped' their maintenance game (so to speak) and programmed the firmware in the ECM / TCM to get the maximum mileage and time out of service intervals, even to the point of detriment to the car over the long haul.

BMW had to do this, as well as others, to compensate for the shift in consumer buying habits. Consumers now were focusing a lot of what their potential new car would cost them not in just up front price but in maintenance $$ year-over-year. At some point, that information was part of the reveal on the window sticker. Since the innerwebs had all this too, the buyer could easily shop online and see what the real ownership costs would be.

My belief is that the Asian vehicles and manufacturers were driving this, certainly beginning with Hyundai. I mean, Ok, a Lexus back then was very nice but boring. Buying a new 2001 V-8 BMW you just knew it was going to cost you, part of the 'driving experience'.

That cost in 2004 averaged $3200 / year (in the Northern Virginia) area for repairs and maintenance. But people started to get weary of that as the Asian competition evolved and direct 1-one-1 were just as good or better.

Today the consumer mindset has evolved from an acceptance of high COD repairs for most brands to a culture of " If warranty doesn't cover it, I'm trading / selling it".

20-25 years ago the average new car dealership had a 80/20% rule where 80% was COD, remaining was warranty work. NOW it has completely reversed, so where then does that leave indie shops?

Lastly, the fact that even in the last 5 years virtually every manufacturer stamps out a pretty good product, great engineering and good execution for the most part. If it doesn't break or need maintenance for 100K, but for oil changes - where is the opportunity?

I know personally 5 indie shops, all Euro that are struggling or at least not meeting previous years numbers. That expanded into working on just about what ever comes in the door.

I don't see it, the opportunity is gone I was part of the 'downfall' post-recession obliteration of that industry. I'm glad I'm in public service now, been a long road but one that's paid off.