Up To Standards
- Author: Mike Weinberg
- Subject Matter: Industry changes
- Issue: Keep up with tech, trends
Technical Training
We have come to the end of another year, and it is time to reflect on how our industry is changing and how we must change and adapt to survive. There are many trends that have very direct effect on our bottom line and our future. The auto manufacturers control a tremendous amount of what affects our industry. They are building excellent cars that if properly serviced will give owners good service for a very long time. Fuel mileage and emissions levels have improved greatly, with the advent of hybrid and electric vehicles. Due to better design and manufacturing standards, cars do not break down as often as past models if the customer does the required maintenance. Longer warranty periods, self-diagnosis and service reminders are now built into many current vehicles.
Many companies provide services at no charge to the car owner. These services are not free as the costs have been included in the purchase or lease prices, but there is no charge at the time of the service. This removes these vehicles from our shops for maybe the lifetime of the vehicle. Longer warranty periods also ensure that we have fewer vehicles coming into our bays. The great increase in leasing has also kept the vehicles with the dealer as opposed to an independent shop. In the Northeast, lease “intrusion” is now running 48%, and the only parts of the country that have less leasing are those where long distance driving is routine to the geography.
Many metropolitan areas have “park and ride lots” that have removed many commuters from the highways through carpooling and public transportation. Other government programs such as the infamous “cash for clunkers” program removed a huge amount of vehicles from the road and the repair shop. There used to be a large body of dedicated transmission shops throughout the country; now there is a huge decline in the “transmission shop” as we knew it, as many shops are now doing general repair work such as A/C, exhaust, suspension, alignment, and brakes to give them adequate cash flow. General repair shops are now doing transmission swaps with units purchased from central rebuilders.
Social media and the internet are very powerful forms of advertising and communication, but it has its dark side. An unhappy customer, rightly or wrongly, now has the tools to destroy your reputation by reaching thousands of people in minutes. You now have a number of websites that sell auto parts to anyone, at prices that are as good as you can buy it for from your supplier. There are forums of every kind where people exchange ideas and experiences on different auto products and fixes, where people can voice their opinions, many of which have absolutely no basis in fact. You don’t have to have any knowledge or expertise to pound a keyboard and confuse millions of people. Opinion isn’t fact, but in this day and age what used to be a rumor that circulated between a few people can now go viral to a worldwide population. It has never been more important to take the time to fully understand your customers and educate them in what the repair process and cost will be. Problem resolution has become a much more detailed and time-consuming task. If there are fewer customers for our product, it is very critical to keep the ones we have.
As the design and function of the modern car has become infinitely complex, our level of education and expertise has to grow. In the world of the manufacturer and dealer, it is in their interest to keep us out of that loop, so as to keep that customer at the dealer level. Service manuals are hard to come by, and we have to do more research through technical-information companies to get the answers and information that is impossible to be without.
Another source of irritation for our industry is “captive parts.” The automaker does not make all the parts that go into the vehicle. The Tier One suppliers that provide many of the parts manufacture the assemblies and service parts. Today’s automaker signs contracts with these companies that they will pay the tooling costs for those products and that anything made on their tooling cannot be sold to anyone else. This means that you now have to go back to the dealer for many parts. I believe that this is a shortsighted approach that is intended to keep the business with the manufacturer, but it creates more opportunity for the aftermarket producers. If there is enough volume, the aftermarket will create the same or improved part at a competitive price. With the huge increase in makes, models, and components, your investment in inventory must increase in order to complete your work in a timely manner.
There are now many hundreds of different transmissions that you have to service, which means your expertise and investment has to increase dramatically.
Government regulation plays a large role in increased costs and complications for the average citizen and the repair industry. I am sure that no one can get through the day without running afoul of some law or bureaucratic rule. The feds, state and local governments write hundreds of thousands of rules with good intentions, but they never examine the economic effect of these rules that add to everyone’s costs without having practical value in the real world. No one has ever been able to legislate away a problem, without attempting to change the behavior of the population. Since the 10 Commandments we have been taught “thou shalt not kill.” If the law could solve the problem, there would be no murders. Only modification of human behavior can solve the problem the law intended.
So where do we go from here? We know how hard it is to make a living in our industry. We have to work smarter not harder. If you wish to succeed you must continue your ongoing education. Reading and research will become several hours of your daily pursuits. This magazine and others like it try to become a good source to understand the theory that you must master. Educate yourself and your people to understand and deal with new technology.
Seminars, websites, books, and continuing education courses provide you with direction to move forward. Technical services will put vast sums of material at your fingertips. If you stand still the world will pass you by very quickly. Remember when all you had to do was fix two- and three-speed transmissions? Now we have CVTs, nine- and 10-speed transmissions, electronically controlled. Make the investment in the latest essential tools; they will pay for themselves quickly. There are a number of excellent computer systems out there that allow you to reflash the driveline and engine management computers in the cars, which keeps it in house rather than paying the dealer. Don’t forget to invest in management education, which will help you to be efficient and profitable. Learn the difference between markup and margin so that each job becomes profitable. A good management seminar will help you to become an expert manager and teach you the organizational skills that are critical to survive in the modern world. Spend time to become an expert diagnostician so that you are properly analyzing every problem the first time, which is the way to profits.
Invest in yourself, some with purchases of the right tools and equipment and some with time devoted to your profession. Continue your education as the need will never stop. Never stop learning to solve the problems. If it was easy everybody would be doing it. Have a merry Christmas and a healthy, happy New Year.
