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No Time to Retreat

Written by Ron Pyle

Wednesday, 08 October 2008

From a strategic point of view, the best time to acquire market share is when your competitor is at a disadvantage.

The economic news over the past few weeks certainly wouldn’t inspire confidence among independent automotive service and repair professionals to invest or expand their business. However, it may be precisely the right time to capture a competitive advantage.

From a strategic point of view, the best time for taking market share is when your competitor is at a disadvantage. With credit extremely tight and new vehicle sales at the lowest point in decades, hundreds of new car dealers are going out of business in the near term.

Several vehicle brands had already announced plans to rationalize their dealer networks. But the effects of the credit crunch will take a much greater toll, and this could provide an opportunity for some independents.

A recent J.D. Power and Associates report featured in the Oct. 6 edition of Automotive News revealed that franchised dealerships have been making significant strides in closing the customer satisfaction gap compared to independent shops.

This quote from the article points out the advantages that independents still hold:

“The biggest issue that makes the difference for independent garages is personal interaction. Also, people often use non-dealer shops because they think the dealer charges too much for service and is not as conveniently located.”

But the gap is narrowing and the article goes on to say:

“Dealers excel in the comfort of the facility and the amenities they offer. Another reason dealers are performing better is that they are doing more maintenance work. Maintenance customers tend to be more satisfied than repair customers.”

While it is impossible to predict the duration or depth of the impending downturn in the economy, it is likely to affect dealers more than independents and smart independent operators should be taking a hard look at their business model and their facility. Recent articles in AutoInc., such as the October 2008 management feature by David Rogers and the magazine’s year-long photo contest, have focused on the very topics mentioned above and would be an excellent starting point for anyone thinking about elevating their business to another level.

Even in a recession, vehicles are going to need service and repair. If the number of outlets performing service and repair is reduced, some customers are going to be displaced and will be available to those shops that are well-positioned and prepared. Be among the winners by refusing to retreat.

LIST OF COMMENTS

1/1. Retreating Written by Stephen Zitterkopf, AAM - Tuesday, October 21 2008
Dealerships are already experencing slowdown, this is evident by their representivies calling and asking what they can do to get our bussiness. I aim to support those vendors who support us, and advoid using vendors who compete against me.

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Last Updated ( Wednesday, 08 October 2008 )

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