Fixed Ops Journal - April 2021 - F16

FIXED OPS JOURNAL

Interview by Richard Truett

minutes with ...
 Nick Pinchuck, CEO, Snap-on

The $200 million sale last month of fixed operations software provider
Dealer-FX, of Markham, Ontario, to Snap-on Inc., of Kenosha, Wis., gives
the giant manufacturer best known for its technician tools and dealership equipment a platform to evolve the digitalization of the service department. Dealer-FX helps broaden Snap-on's corporate portfolio, which
includes repair information and software for independent repair shops.
Snap-on CEO Nick Pinchuck, 73, spoke to Fixed Ops Journal about his
plans for Dealer-FX. Here are edited excerpts.
On how Dealer-FX fits with Snap-on
Everyone thinks of Snap-on as the tool vans. They're iconic. It's kind of
the core of our business, but in reality, we are organized by customers.
The vans sell tools to the techs who twirl the wrenches. That's about 40
percent of our business. But we have two other divisions. About 28 percent of our business is the repair systems and information business,
which we organized about 10 to 15 years ago. [The company's Commercial & Industrial Group makes up another 28 percent, and the remaining portion is Snap-on's financial services.] Dealer-FX allows us to get

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even more involved in that. Dealer-FX puts us front
and center in the trend of the digitalization of the repair shop. Dealer-FX is a huge opportunity and advantage for dealerships. As new technology comes
into the bays, how they deal with that is going to
have a big say in how profitable and prosperous they
are. That's why we like Dealer-FX. It's at that nexus.
On Snap-on's plans for Dealer-FX
There are few companies that are more focused on vehicle repair than
Snap-on. It's in our blood. We think we can bring things beyond just the
current structure of Dealer-FX. We think in terms of developing Dealer-FX's software. We make our money by spending time in shops, by observing what's actually going on and structuring our products to meet
the challenges. And that works whether it's a wrench or a piece of software. We believe with the Dealer-FX system, with its unified products,
with its integrated products, it is going to allow them to generate more
service and parts revenue per call and make it more efficient internally,
so they'll do it cheaper. It's going to give dealerships a powerful way to
deal with the changes.
On whether Dealer-FX might expand to independent repair shops
We are already in the independent market with another system, a big
player, Mitchell 1. There is a lot of difference between an independent
shop and its services, and a dealership. In a broad form they do the same
thing, but the depth at which they understand the cars, and the financial
structure, is different. The customer base is different. There might be an
opportunity there. Maybe we merge them, but these are early days.

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On potential synergies for dealership customers of both Snap-on
and Dealer-FX, such as one bill
Sure. We'll offer that. I always think this is a good thing to offer, but I
don't view that as a first-order event. I view it as a pleasant bonus for both
dealership owners and us. But that's not why we acquired Dealer-FX.

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On whether Snap-on considered other fixed ops software companies
or even developing its own
The first thing is: Would you like to be in that business, and how can
you be in that business? We've had this space on our radar screen for
some time. We saw that new technologies are coming down on us like a
freight train, and we wanted to get in place quicker than if we developed
it ourselves. It was pretty quick that we decided Dealer-FX was best.

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On how battery-electric vehicles, with less required maintenance
and possibly fewer tools needed for repair, will affect Snap-on's bottom line
Snap-on is a company that makes its money on change. We guarantee
our hand tools for life. How is it we have any business at all? The reason is
because the cars keep changing and you need different tools. If there's a
time in which cars changed faster, I don't know when it was. The repair
shop is going to be a challenge but also a great opportunity for dealers. 

APRIL 2021

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4/5/21 11:33 AM

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Fixed Ops Journal - April 2021

Table of Contents for the Digital Edition of Fixed Ops Journal - April 2021