Fixed Ops Journal - May 2016 - (Page 36)

FIXED OPS JOURNAL OFF-LEASE TSUNAMI ■ Is your dealership's service staff ready? Experts say get aggressive JIM HENRY T he coming wave of off-lease vehicles means dealerships need to get ready now for not only more service work, but a shift in the nature of that work and what personnel dealerships need to do it, experts warn. "Right now we're leasing almost 30 percent of a 17 million-plus market," said Rick Wegley. He is an instructor for the NCM Institute, part of NCM Associates Inc., of Kansas City, Mo., known mainly for facilitating 20 groups. "Three years from now, that's really going to shift the market," he said, comparing the effect to a tsunami. It's not just a question of a rise in overall volume, Wegley told Fixed Ops Journal. The mix of work will change, too, he said. More off-lease units and other late-model used cars mean increasing demand for lowerskilled routine maintenance and reconditioning, Wegley said. As an offshoot of that, he said, dealerships should be more aggressive in hiring entry-level technicians suited to do maintenance work as opposed to full repairs. More work Service departments already are seeing more work, prompting fixed ops managers to fret that customers who can't be serviced PAGE 36 MAY 2016 4.5 On the rise 4.0 Lease maturities are on their way to a new record. The previous record was 3,468,676 in 2002. 3.5 3.0 (In millions) 2.5 2.0 1.5 1.0 .5 0 ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: ALG in a timely manner may go elsewhere. New U.S. light-vehicle sales hit a record 17.5 million in 2015, and most analysts predict another record this year. To deal with the rise in service volume because more vehicles are on the road, dealerships have been adding service capacity. That means hiring technicians, adding shifts, staying open longer and, as a last resort, adding more service bays. Bryan Galloway, fixed operations director for Anderson Automotive Group, of Raleigh, N.C., said his organization is looking at all of the above. The group has eight stores in North and South Carolina: four Toyota, three Nissan and one Kia. "We started last month going to two shifts, so we can stay open from 6 a.m. to 11 p.m. At our Toyota store in Raleigh, we have already been open Sundays for a couple of years. Feeling the demand for quick-service type of things, we are also looking at building a reconditioning center," Galloway said. Leasing has historically been more comSEE OFF-LEASE, PAGE 38

Table of Contents for the Digital Edition of Fixed Ops Journal - May 2016

Fixed Ops Journal - May 2016
Editor’s Letter
Service Counter
Legal Lane
Profit Builder
‘Grease monkey’?
Photo story
Richard Truett
High light
Service satisfaction
90-second oil change
Financing fixes
Supreme Court
Tech trends
Top 50
5 Minutes With
Shop Talk
Fixed in Time

Fixed Ops Journal - May 2016