The hidden world of car dealerships

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As part of our research and insight gathering for D5 automotive, we got the opportunity to speak to a former named-dealership mechanic who now owns his own independent garage. We asked him for the inside scoop on how the industry really works and give us insight into a world which customers don’t often see.


Of the services you provide, which are the most popular?

 Around 80% of people arrive looking for their service & MOT - Mostly in sync. Lights on the dashboard normally remind customers when their service is due. We don’t remind customers as it would be too costly and also annoying for customers.

The other 20% of people we see are in to get their repairs fixed.

 

Do you see your products and services changing in future to reflect changes in the car market e.g. telematics?

Cars last longer than they used to - more and more problems are with the electronics rather than the mechanical bits or rust which used to be the issue.

I think that the future is Hydrogen, not EV! We do repair some hybrids but not electric vehicles. Electric vehicles need very little serving and we can’t touch the batteries.

 

Do you find that customers tend to have loyalty to the dealership/brand for after care/servicing?

 The older generation tend not realise you can go elsewhere and so are more loyal to the ‘main dealers’ whereas younger customers are more savvy.

 I’d recommend taking new cars to the main dealers for the first 3 years but not more (even if the warranty is longer) because;

  • Main dealers often do little software updates that you don’t know about and nobody else can do.

  • Main dealers are more likely to buy it back within 3 years if it’s been serviced by them.

  • Main dealers offer 3 year service plans if you want peace of mind

 Main dealers are not really interested in buying cars more than 3 years old so it’s better to go elsewhere for servicing after 3 years.

 I’m lucky enough to have a very loyal local customer base and most customers walk home after they drop off the car but I will sometimes offer a lift if needed.

 

What do customers like or dislike about the service you provide?

They tend to like

  • The lower cost, especially for replacement parts. For basic and safety parts, parts from the main dealership are normally identical to non branded parts but significantly more expensive.

  • The friendly / open service. I generally try to show people what the problem is with their car - some people are interested and appreciate it whereas some people don’t care.

  • The proximity to their homes. Convenience is a big factor for them.

  • The free services e.g. for loyal customers we don’t mind doing a quick check of something, quick bulb replacement, scrapping service if the car is not worth fixing etc.

 

Ultimately, they dislike paying! In particular, they worry about what an MOT is going to cost if it doesn’t pass. We try to help them to minimise the cost. If it’s an expensive non-critical fix then customers will often live without it, such as fixing the air conditioning.

 

Describe a typical interaction with a customer. How do they first get in touch / book in an appointment, etc.

 Booking is generally done on the phone and appointments are arranged in a paper diary. My customers tend to know that I can generally fit them within the next week or so.

 It is an art to managing capacity. Sometimes we run out of work but have long term projects that fill our time.  Sometimes, we have to ring customers back if more issues than expected come up.

We prioritise based on customer urgency. For example, a retired couple with a second car tend to be more accommodating and so get booked in the afternoon and might get pushed back to the next day.

 

How do independent garages differ from main dealers?

Everyone here used to work for main dealers before moving out of town and we are all much happier at an independent….

Working for a main dealer is very challenging (and they’re all the same)….

  • There is a lot of red tape and paperwork. Paperwork often takes longer than fixing the car!

  • We had to use branded parts which are expensive and take longer to arrive than equivalent non branded parts, which annoys customers.

  • The way of working and tooling is dictated by the OEM and sometimes that isn’t the best way.

  • They tend to cram the work in. Due to tight deadlines to do services and repairs, you sometimes had to cut corners which doesn’t feel good.

  • Their bonus systems drive wrong behaviours and cause arguments on the shop floor. It’s like being back at school!

  • They get quite a few chancers (who are not regular customers) who ask for a ‘freebies’. This takes up lots of time.

 

Is ordering parts a particular pain point for you?

 It used to be difficult to order the correct part but now all you need to do is call the Factor company and quote the registration number of the car. (A Factor is a company that sells and delivers parts on a just-in-time basis to garages, fast fits and fleet workshops. Deliveries occur at least twice a day, in the company’s own vans.)

The registration number gives the make and model and so the factor company know exactly which part to deliver. They normally have the parts in stock and so they arrive the same day.

 You sometimes have a choice of quality and this decision is made by the customer with our guidance. The Factor will deliver two parts and then take the one you don’t want back.

I never choose to go with branded parts except for model-specific or visual items such as a wing mirror. Branded parts for basic items are normally identical to non-branded parts and are a fraction of the cost due to the mark-up on them. OEMs make a lot of money on their parts and some customers think they’re better.

OEM parts take much longer to deliver. Local main dealers order the parts using the OEM Parts system - when it arrives, a few main dealers have vans and can deliver the same day if it’s in stock. Most expect you to collect the part or they will post it. But main dealers generally keep quite a small stock.

 

Which brands are most reliable?

German, Japanese and South Korean cars are the most reliable. Italian and French ones are not. Nissan now use Renault parts and so are less reliable than they once were, but they are still better than Renault. Savvy customers know that French and Italian brands are worse because their second-hand value is so much lower.

I think that OEMs would like to know more about why their older cars fail. They don’t really know at the moment because they only have data for first 3 years which is when their own dealerships service them.

If a customer’s car fails beyond economical repair, they will likely move away from brand. For example, if an ECU (electronic control unit) fails on an old car, the OEM could charge £900 for a new one. But the car is not worth it and so it is written off, and the brand reputation is damaged. The ECUs do not cost OEMs very much to make and so they should offer them at a lower cost to retain their brand reputation.


This invaluable insight into the hidden goings on in the industry has helped shape some of our big ideas which we are exploring as a team as we aim to alleviate some of the big problems facing both customers and dealers.

 

Fraser Smith