Even before COVID-19, the automotive industry was on the brink of a seismic shift. Electric vehicles (EVs) were poised to become mainstream, slashing maintenance and repair needs. Dealerships knew service lanes would see less traffic. The pandemic accelerated this reality: fewer cars sold and a surge in low-maintenance EVs hit service drives hard.

Now, as pandemic-driven high-profit margins normalize, franchised dealers face a stark reality: they must offset declining service lane traffic to maintain profits.

Dealership Opportunities

The rise of EVs and complex automotive technologies is also driving up recall rates, adding urgency for dealers to adapt. The solution lies in aggressive, targeted marketing strategies focused on recalls, reclaiming "lost souls," and retaining vehicles beyond their warranty periods—segments that often drift to independent service providers. Here’s how dealerships can seize these opportunities:

1. Cutting Credit Card Fees

   
   Implement credit card surcharge programs to reduce fees, following card brand rules and legislation. Encourage alternative payments like debit cards or cash, which have lower processing fees, to offset profitability drops.

2. Leveraging OEM Apps

   
   OEM apps are now essential, replacing keys with mobile devices (think Tesla, Lucid, Rivian). Dealers must integrate their scheduling, messaging, and video content systems with OEM apps, ensuring visibility and accessibility. This integration keeps consumers connected to the OEM and the dealer, enhancing service experience and loyalty.

3. Utilizing Telematics

   
   Dealers must grasp their OEMs' telematics strategies. Advanced telematics can send appointment leads directly to dealers, enabling timely follow-ups. Properly functioning connectors ensure dealers capture leads and improve customer engagement beyond the warranty period. Staying aligned with OEM initiatives positions dealers correctly in the telematics workflow.

4. Targeting Declined Services, Lost Souls, and No-Shows

   
   Dealers should use vendors' marketing capabilities to target declined services, lost souls, and no-shows. These areas, though minor, can significantly impact profitability. Systematically targeting recalls can bring in both recall and customer pay work, boosting service lane traffic.

5. Integrating Vendor Systems for Efficiency
   
   

   Integrate all possible vendor systems to enhance dealership efficiency and throughput. For example, integrating Drive Over equipment from Hunter and Traxtion and tire distributors like DealerTire with your video MPI program can increase transparency and convenience, leading to greater acceptance of recommendations, quicker throughput, and higher repair order values. Some luxury brands have seen repair order open times cut by 10 hours on average, increasing grosses by $100K. The right tools and processes can yield astounding results.

These strategies must be executed in parallel. The COVID-19 era is over, and service drives are returning to pre-pandemic levels. However, the rise of EVs demands that dealerships adapt to thrive. By focusing on these key areas, dealerships can navigate the challenges ahead and maintain profitability in a fiercely competitive market.

*This article was first published on Digital Dealer.