Ladies and Gentlemen, Start Your Service EnginesCompeting on service excellence in the automotive industry |
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"A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large," Henry Ford once said. Decades later, many companies are still struggling to heed his advice. According to a new study by Deloitte Research, automotive companies often neglect a huge opportunity in their own service businesses.
Our ongoing Global Service and Parts Management Benchmark study, covering many of the world's largest manufacturers of automotive and commercial vehicles, shows that the service and parts operations are typically far more profitable than the main business, and account for a significant share of total corporate revenues. As a result, service profits contribute more than 46 percent of total profits among the automotive businesses benchmarked.
Automotive companies that capture the service business — and, most important, keep it after warranties expire — gain not just in sales and profit but also in reduced costs and greater customer satisfaction and loyalty. Yet, most companies have a long way to go before they can harvest the immense potential of service and parts sales. Obstacles include a lack of service strategy and business design, and substandard operational planning and management, which typically result in mediocre execution of the service business.
For more information and to have your client participate in the ongoing Deloitte Global Service and Parts Management Benchmark Survey, please contact us.
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Ladies and Gentlemen, Start Your Service Engines
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