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New Car Dealerships Continue to Push Prices Downward


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We recently had a customer tell us that we were nearly $100 more expensive on a Timing Belt job (Volkswagen Bug) than the dealership. I called that dealer (as a regular customer) and asked for a price on the same vehicle, only find out we were, in fact, $89.00 higher.

 

Now, we all know the price game when people call on the phone, they usually give a bottom, starting price. Also, how complete was that price? And, what would have the price been after the car was inspected at the dealership is another story.

 

The fact is we see more and more lowering of prices in service as dealership, especially from Toyota, Honda, Ford, GM, Subaru, Hyundai, Nissan and Chrysler in our area. The goal is to increase car counts in the service bays. Smart dealerships understand the relationship from the service bay to selling future new cars.

 

As independent shop owners we need to be aware of this. I dont want to enter a price war with the dealerships, but I dont want my customer to perceive the wrong message either.

 

Any industry that enters a price war will have deep casualties among all.

 

Your thoughs?

 

 

Joe,

 

I suspect that trend will continue as dealers fight to stay alive in the face of declining new car sales. As the baby boomers begin to retire in 2013 and beyond, I don't believe that dealers will be able to reverse the negitive trend. There will be some dealerships that will not survive, but they are bound to drag down service costs in their market area until they exit.

 

To counter the decrease in dealer prices, I believe we must keep an eye on costs, educate our customers and have great customer service--all of which we should be doing today. I think there is an opportunity to capture younger customers with the use of social media and by offering some 'hip' products, such as, low cost wheel and tire packages, dual exhaust systems, performance packages, etc.--These kids are the key to countering an aging population if you can make them your customers TODAY.

 

Okay...back to my coffee. Have a great weekend.

Edited by Milehigh
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Yes i have seen more of that as of late. We are at war for our very lives more ways than one. Many people hear blah blah blah $89.00 too high, GOOD BYE.

 

That being said Focus on giving people a vehicle fixed right the first time, a washed car, a discount coupon for the next visit and ask everyone (including dealer employees) for referrals. B)

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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