“He who whispers down a well about the goods he has to sell will never make as many dollars as he who climbs a tree and hollers.” (Edward of Wales, 1935)
There are two powerful forces currently affecting the car market. The pandemic, and the war in Ukraine, have led to new car sales dropping significantly, because supply chain issues have reduced the supply of new cars in the first place. Consumer preferences have also shifted as customers are looking to purchase electric vehicles.
One of the ways dealers can navigate this climate is through servicing. But what do these new alternatives mean for dealers in terms of offering servicing?
The bad news
The rise in electric vehicles will reduce the demand for servicing. The brakes of electric models are less likely to need replacing, the battery and motor require little to no maintenance. What’s more, research shows that “an electric car costs at least 30% less to service and maintain than a traditional car.” (Energy, 2022)
The good news
The good news for dealers is there is still a clear gap in the market to provide servicing for older models. Dealers will need to investigate extending the age of the cars they are servicing by creating service plans for older vehicles. A study carried out by WMS Group, and parent company Opteven, revealed that two thirds (65%) of car buyers are now opting for older vehicles.” (Online, 2022) If the statistics are anything to go by, this opportunity to make profit should not be overlooked.
How can dealers get hold of older models?
Three words: Referrals and budget servicing. Aftersales is still critical to maximising car dealership profitability. Customers cannot avoid the necessity of routine service bookings, but they can decide where to take their vehicle. What if your dealership found a way to bring these customers in for servicing? Dealers who are willing to offer incentives or discounts to customers who refer someone with an older vehicle in need of servicing could see themselves profiting.
Customers with older cars that are not under manufacturer’s warranty are likely to choose to go to independent garages for servicing. Therefore, by offering a referral reward to existing customers to recommend buyers to your dealership, dealers will win back these older vehicles customers. What’s more, rewarding customers will nuture your existing relationships and increase the likelihood of referrals in the future. Instead of waiting for customers to rave about your business, get out there and spread the word.
Bibliography:
Energy, e. (2022). Electric car maintenance and servicing. Retrieved from edf energy: maintenance
Online, A. (2022, July 6). Dealers respond to cost-of-living crisis by changing stock, Startline finds. Retrieved from AM Online: dealers-respond-to-cost-of-living-crisis-by-changing-stock-startline-finds
