Over the past 10 years, dealers have seen gross profit from parts sales shrink. Dealers have few wholesale parts opportunities. NADA says the percentage of older cars on the road is reducing warranty repairs. And the addition of “Quick Service” lanes is changing the sales mix to lower margin parts. All of this is affecting the bottom line of the fixed operations department.
There is little a dealer can do to lower the average age of America’s auto fleet or to reverse the growth of independent repair shops. The trend of longer maintenance intervals also affect parts sales. Dealers do, however, have the ability to improve the gross profit generated by their “Quick Service” lanes.
As cars age, the number of maintenance-related accidents increases proportionally. These are accidents caused by worn brakes, among other things. Dealers who do a proper safety inspection will increase parts sales and keep America’s roads safer.