Reaction From The Virus

The virus has taken its toll on every one of us even if we haven’t gotten ill. The business was affected dramatically with service and body shop car counts down in many sales departments forced to close, temporarily. Most shops have seen counts recently improve, but I’ve seen some destructive habits forming that are affecting results across the country in fixed operations. Service departments have added additional steps to sanitize vehicles and protect customers and employees alike.

These things are needed and likely will become standards for the future. Additional damage from the virus is occurring that has nothing to do with the disease. Dealerships across the country have slashed pricing, reducing margin in addition to lower car counts. We are seeing this destructive habit, making it challenging to find recent repair order sequences that qualify for improvements on warranty submissions to manufacturers. With reduced margins and counts plus the additional costs of new processes, be prepared to suffer a slow and painful death of your business.

Most state laws allow repair order ranges up to six months old, so it hasn’t eliminated increased amounts for warranty submissions yet. The real damage will occur if your dealership believes lower margins are the answer to improving fixed operations gross profit. Improving margins on warranty repairs is critical to get dealerships through tough times. Dealerships can gain hundreds of thousands of dollars in profit with a good warranty submission. Lower margins and running a sale are not terrible now and then just don’t plan to live there.

Sincerely,

Rob Gehring, President
Fixed Performance Inc. (Fixed Operations Consulting)
ATES (Automotive Technician Employer Standards)
Margin Plus (Manufacturer Warranty Reimbursement Program)
Toll Free: 1-888-205-8718
Office: (419) 433-8219
Cell: (419) 282-1351
rgehring@fixedperformance.com
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