Dealers' #1 source for auto industry news, content, coaching & analysis

Dealerships respond to rising competition with third-party service providers

Dealership service centers are facing more competition than ever from third-party repair and maintenance providers

Dealership service centers have continued to lose business to non-franchised repair and maintenance providers, according to new research from Cox Automotive.

Over the last few years, fixed op profitability has mostly trended higher, as has the number of customers in need of repair. However, these gains have coincided with a slight shift in how car owners view dealership service centers. Based on an analysis of work orders, the retail automotive sector’s share of all service visits has shrunk from 35% in 2021 to 30% in 2023.

This year also marks the first time in Cox Automotive’s research that consumers have ranked third-party repair and maintenance providers higher than dealership service centers. While general repair shops were ranked just two points ahead of their franchised competitors, the shift in sentiment indicates that retailers are no longer providing the service experience they once were.

Two of the main issues cited by customers in Cox Automotive’s study were trust and cost. Car owners often do not trust their dealers to give them a fair deal, sentiments exacerbated by recent trends of heavily inflated car prices and bloated profit margins. These feelings may be affecting the ability of dealership service centers to compete with third-party providers. Above all, buyers who feel they were treated poorly by a dealer or their staff when purchasing a vehicle are much more likely to visit a competitor for follow-up work than return to the original seller.

Nevertheless, the retail automotive sector still has much to gain by offering repair and maintenance work, especially if they can overcome the challenges mentioned above. Prioritizing the customer’s experience, improving technician training and supplying teams with innovative technologies will be key to boosting profit and retention in the dealership service center.

Stay up to date on exclusive content from CBT News by following us on Facebook, Twitter, Instagram and LinkedIn.

Don’t miss out! Subscribe to our free newsletter to receive all the latest news, insight and trends impacting the automotive industry.

CBT News is part of the JBF Business Media family.

CBT News Staff Writer
CBT News Staff Writer
For over 12 years, CBT News has been informing and helping automotive retail professionals grow their businesses and thrive in their careers through an awarding-winning, on-demand streaming platform. With exclusive interviews featuring the biggest names in the industry, daily newscasts, up-to-date market data, and exclusive articles covering the latest trends, CBT News is your #1 source for auto industry news and content.

Related Articles

Manufacturers In This Article

More Manufacturer News

Latest Articles

From our Publishing Partners