Dealer Service Business Down

Dealership service-lane volume fell in November, though revenue was up, thanks in part to inflation, Cox Automotive said.

The data provider said the business drop-off was largely due to seasonal patterns but cautioned that dealerships should strengthen customers’ experience with getting their vehicles serviced to avoid steeper declines.

Cox said its Repair Order Volume Index tied its lowest reading in six years, down 5% month-over-month and 3% year-over-year to 82.1. Its companion revenue index did fall slightly, 1.5%, month-over-month but rose about 4% year-over-year, at least partly because of inflation, Cox said. Revenue was dramatically up from 2019, by more than 36%.

Behind the business numbers are Cox customer sentiment metrics that show consumer trust in dealerships is falling. A recent study it conducted found that dealerships for the first time aren’t consumers’ most preferred service provider and that their trust fell 8% in the past two years.

“Start by considering what improves trust — transparency,” said Cox Director of Product Consulting Skyler Chadwick in a press release on the findings. “There are tools that help dealers show consumers what services and repairs are being recommended by texting videos and pictures. Consumers don’t have to wonder if dealers are telling them the truth; they can see it.”

He said dealers should approach trust-building across the business, though, not only in the service department. “… next-level customer experience will come when the experience is seamless from purchase to service through trade-in — across the entire lifecycle.”

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