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Service Revenue Predictions – Stat of the Week

Service Revenue Predictions – Stat of the Week

The average vehicle on the road today is more than 12 years old, according to research firm IHS, and the vehicle parc is at a record level, in excess of 280 million. This drove Cox Automotive to touch on a relevant topic as one of their predictions for 2022:

The Service Revenue Opportunity Will Continue To Be Robust For Dealers

With new-vehicle prices higher than ever, research from Cox Automotive indicates more consumers will be focused on fixing, rather than replacing. Further, while the traditional commute may be a thing of the past, our research shows that 50% of Americans expect to drive more in 2022 than they did last year— avoiding public transportation; driving instead of flying; returning to a hybrid work situation. With the added miles, service visits are expected to increase as well. All-in-all, the service lanes should continue to be an important part of the franchised dealer business equation.

Diving into the numbers a bit more…according to Cox, the number of repair orders has taken a hit from COVID. Here’s a chart of the volume of repairs dealers have seen over time.

Source: Cox Automotive

But, each repair order generates over $475 in revenue on average.

Source: Cox Automotive

As people start venturing out more, repair orders will most likely increase. And at a higher sticker price for each repair, there’s the opportunity to bank more money from your service department.

Use This Data to Your Advantage

As service visits increase, you’ll want to maximize efficiency within the service department. For two good reasons:

Tightening up your procedures within your service departments means you are eliminating wasted time and effort, allowing you to do more with less.

But, doing more with less can open up safety gotchas. As the volume of visits increases, people are moving faster. Unless your safety procedures get built into employees’ “muscle memory,” there’s a massive opportunity for things to go wrong.

So, start looking at the processes and procedures within your service department. Are there bumpy handoffs? Are there areas that tend to cause accidents or almost accidents? Now’s the time to iron out any wrinkles – because, with a bunch of 12-year-old cars on the road, you’re going to be busy!

How KPA Helps Keep Your Service Team

KPA provides comprehensive consulting services, compliance software, and award-winning training to help dealerships maintain a safe workplace, protect their reputation, and reduce costs.

Take advantage of investigations, audits, program reviews, and more. KPA’s health and safety consultants help dealers comply with OSHA, EPA, DOT, and state regulations. Our certified consultants bring best practice advice and actionable recommendations for your unique program.


About The Author

Toby Graham

Toby manages the marketing communications team here at KPA. She's on a quest to help people tell clear, fun stories that their audience can relate to. She's a HUGE sugar junkie...and usually starts wandering the halls looking for cookies around 3pm daily.

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