The old adage, “Know thy enemy,” holds true even in the retail business as competition in the auto service market gets more complicated.
With that in mind, independent tire dealerships and auto repairers might find the newly released National Automobile Dealers Association (NADA) study on factory-mandated auto dealership image programs interesting in that some of the findings could translate to more sales for their business operations. And some of the study's forecasts might even help independents prepare for what the competition might do in the future.
Car dealerships, unlike independent shops, must deal with their car brand franchisers' urging store renovations and standardization. The NADA study, which surveyed numerous dealers and other industry participants, concluded that while renovating a dilapidated store may show a positive return on investment, modernizing or standardizing stores may not. This could be true for any business.
On the other hand, the report noted what many successful independent tire dealers already know—that no amount of renovations and updates can compete with a consumer's trust and relationship with the business.
“One advantage small garages have traditionally had over large dealerships is the ability of the customer to develop a personal relationship with the garage owner or even the individual technician,” the report stated.
So independent dealers need to weigh the costs of investing in updating their facilities to compete with a modern car dealership down the street vs. investing in training employees to serve customers better and service their vehicles.
Independent dealers also should take note of NADA's predictions of the car dealership operations of the future. The report anticipates nearly 300 million vehicles on the road by 2025, but the number of car dealerships in North America—about 19,000—will remain unchanged.
These car dealerships will be going after a larger share of the profitable aftermarket service business. Some of the suggestions they may consider to draw in and retain service customers, according to NADA, include satellite service centers, pick-up and drop-off services, increased hours up to 24/7, centralized shuttle runs, on-lot touchscreen displays for unattended service drop off and driveway service.
No doubt, these are some ideas independents could implement, too, if they think this will help them compete.
The advantages of independent dealerships are that they do not have to bow to the whims of the OEMs, the way car dealers often have to. But car dealers also rake in more money and OEM support from selling new vehicles, so they can implement innovative ideas to compete.
Independents should watch and learn from car dealers then either implement these ideas first or find alternative ways to compete more effectively.