Fixed Ops Journal - December 2017 - 18

FIXED OPS JOURNAL
Scott Keogh, president
of Audi of America, wants
"reality" in EV forecasts.

Don't panic over transition to EVs,
experts advise service providers

RICHARD TRUETT
rtruett@crain.com

espite dire predictions that the internal combustion engine is running on fumes, the transition to
electric vehicles will be gradual
and dealership service departments will have
plenty of time to adapt, industry leaders say.
"There are alarmist headlines," Scott Keogh,
Audi of America's president, told Fixed Ops
Journal. "You've got to put some reality behind it. I am not a doom-and-gloomer."
Audi, like other automakers, is gearing up
for a huge spike in sales of electrified vehicles.
But even so, Keogh says the fixed ops business
is not in danger.
"Even when our mix in 2025 goes to 30 percent EV," Keogh says, "you are still going to be
dealing with at least double the amount of [internal combustion] engines [from today], because we are still going to continue to grow."
Ramping up body shop operations and selling collision repair parts - especially glass -
to independent shops are among the ways
dealers could offset revenue losses from fewer
service visits by EV owners, analysts say.
"Dealers have a big advantage in supplying
genuine collision parts," says Nate Chenenko,
head of the mobility practice at Carlisle & Co.,

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continued from Page 16

perform tire and wheel replacements and sell
suspension parts for EVs, Burchfield notes.
They also can make collision repairs and sell repair parts to independent body shops, he adds.
But that window of opportunity won't stay
open long, says Chenenko, who cites his experience with a gasoline-electric 2005 Toyota
Prius he has owned for a dozen years.
"In 2006-07, I couldn't walk into an independent repair facility and get the same level of care
because the technology was so new," he says.
"Now, the entire aftermarket can fix a Prius."

The future is now
At Autocom Nissan East Bay in San Leandro,
Calif., Service Manager Bob Nannetti is on the
front lines of a battle that other dealerships are
likely to face as the brands they sell go electric.

PAGE 18

DECEMBER 2017

an industry consulting firm in Concord, Mass.
But Chenenko adds: "The collision parts
profitability window closes when semiautonomous technology becomes more widespread, because cars will stop crashing into
each other."
Wally Burchfield, vice president of aftersales
for Nissan North America, says dealership
technicians still will have plenty to do during
and after the transition to widespread EV use.
"We are still dealing with a population of
early adopters," Burchfield says of EV owners.
"They are generally cautious."
And even when EVs enter the mainstream,
he predicts, the instant torque of their electric
motors will cause drivers to push them hard.
"Aggressive driving will cause more maintenance to be needed," Burchfield says.
Jim Roche, senior vice president of marketing and managed services for Cox Automotive's Xtime, also counsels dealers and fixed
ops managers not to panic about the switch to
EVs.
"How many gasoline engines [in vehicles]
are on the road in the United States today? 250
million," Roche says. "How many more will we
sell in the next 10 years?" 
Larry P. Vellequette contributed to this report.

Out of service

Service work on these parts is not
required in EVs
 Oil and filter  Cooling system
 Engine air filter
 Spark plugs
 Transmission
 Drive belts

"Sixty-five percent of the cars in my drive are
coming in for an oil change, and that builds
long-term retention," Nannetti says.
But the Leaf has changed the equation, he
concedes.
"Many of the early adopters were religious
about doing the maintenance because they
embraced the technology," he says. "But the
[Leaf] is maintenance-free and many drivers
know it. Now that the car is getting into second hands, there's really been no reason for
people to return to the dealer."

At Motorcars Honda in Cleveland Heights,
Ohio, dealer Chuck Gile is revamping his service department to offer extremely speedy oil
changes.
He's betting that his fast lane will encourage
customers to get other service products, such
as wheel alignments, brake repairs and tire
sales.
But the battery-powered Honda Clarity that
Gile will eventually sell - the EV is on sale only in California and Oregon, and Honda has
yet to announce plans for a nationwide
launch - won't need oil changes.
Gile worries that when electric vehicles arrive in volume, he'll lose the opportunity to
inspect vehicles and find service items that
customers don't even know they need.
"Back in the late '70s, you didn't want to do
oil changes," Gile says. "Now, that's the most
important thing. You have to keep adapting
and changing." 

Table of Contents for the Digital Edition of Fixed Ops Journal - December 2017