Fixed Ops Journal - December 2019 - F27

FIXED OPS JOURNAL

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month's Fixed Ops Journal Forum in Orlando.
"It just reinforces in the customer's mind they
were smart for leaving" the dealership.

continued from previous page

the fleet, and if they don't, they get fined," he
said. "With an OTA, any OEM can push out
the update and have it done properly,
especially if it is a safety-critical system. It's
important to get those done quickly."
As OTAs proliferate and owners can avoid
the dealership, service departments will have
fewer opportunities to inspect vehicles and
recommend oil changes, tire rotations and
general maintenance work. At the same time,
the service drive will be less clogged with
customers who show up without an
appointment for safety-critical updates that
require only new software.
That change, says Lee Harkins, CEO of the
fixed ops consultancy M5 Management
Systems, will open service bays and free
technicians to do higher-profit repair work. But
it also will require fixed ops directors to step up
their marketing to win service business from
independent providers, he adds.
"Dealers shoot themselves in the foot when
a customer has to wait two hours for a
10-minute flash," Harkins told me at last

Good for dealers
Don Butler, Ford's executive director of
connected vehicles and services, says the
automaker is working with Ford dealers to
help define how OTAs are carried out. The
company has not disclosed OTA plans for
Lincoln vehicles.
"From a dealer's perspective, it might seem
like something is being taken away," Butler
said during a Ford event to introduce Sync 4,
the infotainment system in Ford brand
vehicles that will enable OTAs. "We've had
very good conversations with the Ford dealer
council about this.
"We agree that if we satisfy the customer
and make the vehicle better over time, we are
going to drive more business back to our
dealerships, for new-vehicle purchases as
well as for general maintenance," Butler says.
Hanno Lorenzl, an automotive principal for
the professional services firm EY, predicts that
dealership service revenue will initially
decrease when vehicles under warranty are

The 2020 Chevrolet Corvette is among the first
GM models to update its entire operating
system over the air.

updated with OTAs. But he says he believes
dealers can more than make up for that loss
by targeting service customers with out-ofwarranty vehicles that are about 6 years old.
The average vehicle on America's roads is
11.8 years old. Lorenzl says older vehicles give
dealership service departments a strong
opportunity to book high-value customer-pay
repair work.
Still, OTAs offer "reason to be nervous," says
Mark Colosimo, vice president of data and
analytics at the Detroit consulting firm Urban
Science.
"We are dealing with new technologies and
new products," Colosimo said at the Fixed
Ops Journal Forum.
"In the short term, we've got to plan for
them. We've got to know what's coming down
the road so we can be ready, especially in
fixed operations." 

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DECEMBER 2019

PAGE 27
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Fixed Ops Journal - December 2019

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