Vehicle Service: Most Dealers Offer Service, But Opportunities Remain
Most tire dealers don’ consider themselves as vehicle service outlets, but most dealers derive a substantial portion of their revenue – and overall profits – from vehicle service sales.
According to Tire Review’s 1999 Tire Dealer Profile Study, 81% of tire dealers do some form of service on cars and light trucks, a percentage that has held steady over the last five years.
And the average gross margin they reported for service sales was a stunning 52.5%. Compare that to the 26% average gross marguin they reported on tire sales.
So while a tire dealer may always be a tire dealer, it’s obvious that vehicle service is carrying the mail – and the balance sheet.
Tire dealers are especially strong in undercar service – particularly wheel-end and brake service – vs. underhood work. In fact, over 90% of the dealers doing service work offer a tt
While well over half do provide underhood services, dealers complain of the high cost of specialized tools, diagnostic equipment and training necessary to keep up with last year’s technology.
Still, good full-service repair shops are hard to find. If your home market has weak full-service competition, now may be a good time to expand your range. Word of mouth recommendations from satisfied customers will be your best advertising tool.