Increasing Revenue With Fixed Operations

As the automotive industry changes and vehicle grosses erode the industry must focus on increasing revenue in fixed operations to grow net income. According to a study conducted in 2015 by Xtime which is a division of Cox Automotive, 526 million automotive maintenance transactions took place and dealerships only accounted for 31% of those transactions. The study also reported 223 million vehicles performed general repairs and dealerships accounted for 27% of those transactions. The numbers show a significant amount of business being lost to independent shops around the country which can be recaptured by automotive dealerships with a stronger focus on fixed operations and customer service.

Millions of dollars are spent every year on sales training for the front end of the business training vehicles sales people but little if any training is ever provided for the sales professionals that interacts with the greatest number of guests on the service drive. 

Focusing on these 8 controllable functions in the service department can change the departmental net profit in service by making just a few small adjustments. The 8 controllable functions include training, expenses, gross profit, clock hours worked, percent of productivity, work days in a month, effective labor rate and calendar utilization.

There’s a fantastic book on Amazon called "Turbocharging Your Parts & Service Departments" by David J. Linton. It’s a fantastic book that can be used by you and your team to set goals and understand how each of the controllable functions listed above can be used to change and make a difference to the bottom line.