Conversation (Chris Collins + another speaker) about the future role of dealership service departments: service is predicted to become the dealership "star" as vehicle sales shift toward direct-to-consumer and subscription models. Key points: growth of fleet business and subscription-based ownership with maintenance bundled; turnaround time (minimizing vehicle downtime) will be a primary value for fleet customers; technicians with high skill will command premiums; dealerships will consolidate (larger groups like Lithia, AutoNation expanding) while smaller dealers sell out; service centers may operate off-site satellites or warehouses with less customer-facing space; the traditional service drive will decline as vehicles autonomously relocate or are picked up. The speakers also reference an Automotive News article (November) about GM/Ford and the UAW shifting positions on direct-to-consumer sales in Michigan.
Questions this video answers
November (year not specified in this chunk)
Chapters
I, I think another thing with the future of service departments is more and more it's going to be fleet business. I think we're starting to see that right now. But as time goes, people will be, you know, they will be in subscription based purchases, it won't even be leasing anymore. And in those will be maintenance and repairs will be included in the warranty and, and they will just go to wherever that fleet contract is. Right?
Yep. And I think that the big thing on that, and just hear me out on this, I think that the, that the value to the fleet company is, is not going to be price, it's going to be turnaround because there's a cost to that thing being off the road.
Yeah.
It's not necessarily going to be. They're not looking for 1999.
Only with trucks. Yeah, with, with heavy trucks. So there'll be more fleets. I think that I did have tires also like you said. I think that whoever has the technicians will win. I think you'll be able to charge a premium if you have the technicians. Yeah, it will be harder and harder.
Well, especially when it comes to like your modification theory.
Right.
Like I don't want the, I don't want to, I don't want a 10 an hour tech doing my modification is actually going to be responsible for driving my car. Right. Like you want that thing done. Right. And they will absolutely be a premium on the people that are the best at it.
Recently there was a article.
In Automotive News is actually in November and we're trying to get him on but he, he was talking about how in Michigan General Motors and Ford switched sides in the lawsuit of the dealers suing so Tesla couldn't sell, sell and service cars there. And that uaw, the union also switched sides and was not only backing Tesla's direct to consumer, they were saying that not even carving it out for Tesla for all automakers to be able to go direct to consumer. So I've said this for a long time and you know, it always seems like I'm talking to air. Yeah, to air that the manufacturers are going to go direct to consumer with the car sale which is going to leave service departments for dealerships in an identity crisis because they're still going to be very needed in the marketplace. But most of the dealers and general managers, their identity is tied up in how many cars they sell. And so a lot of dealers will sell. So there'll be more consolidation in the Lithias and the Autonations and all the bigger companies will grow dramatically and the, you know, mom and PA Dealer groups and dealers will slowly sell over time. But it'll be the pen skis, the Lithias, the Autonations, the groups, maybe there'll be another group that'll, that'll come out of nowhere. But there'll be more and more consolidation through this identity crisis that the car sale will no longer be the star of the show. Service will, but the service department will become more and more important and I think you know, service departments will be allowed to have satellites and it'll be more about the customer experience. It'll also be more of a fleet based type thing where you can do it in warehouses and you don't have to have the customer facing part of it.
Yeah, yeah. I think that that's beautiful for expansion. Right. Like that's the thing with the dealerships is they got these big beautiful multimillion dollar Taj Mahals. But man if you can have, you can have eight lifts in an off site location, what kind of money can you generate out of that? That it's not customer facing? What a great opportunity for service centers.
Yeah, more than anything either the cars will drive themselves to us or we will go pick them up. But the idea of a service drive will be less and less.
Yeah, but that flip, that's a really big thing because I think that you know, everyone thought that the big three were going to kind of sit behind their dealers until the end. Right. And it's, it was really kind of a downhill thing because I think both Ford and GM invested in like Rivian and the newer companies and stuff like that. So once they to kind of say okay, it's coming, I, I think that was my worry for the way that the dealer model is. But it's not, it's not going to stay the same and I think, just think we got to get ready for it. But service is definitely the answer.
Yeah. Thanks so much for watching this clip of Service Driving Revolution. We're uploading new stuff every day so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333 Ask SDR for special deals on our books and training. Head over to offers.chriscollinsinc.com that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video.
