Proactive, positive, and constructive

Shop owners from coast-to-coast are realizing the competitive world of the Aftermarket industry is heating up like never before. The New Car Dealerships are becoming increasingly focused on taking the Independent sector’s business away from them, and doing their very best to keep it.

Based on what I see out there, however, I don’t think the new car dealership strategy will ultimately work in the long run because of the following factors:

* New car dealers run their business focused on “cost” which means they view, for example, all technicians as a “cost” to their business. Consider that competent employees make a business money; they create a great return “on investment” for the business. Dealerships, however, control costs by paying flat rate to technicians without regard to building long-term “career orientated” business/personal relationships with their technical team. History has proven the lack of respect for technicians is strong at the Dealership Management level. Many Independent shop owners have confirmed this, as many have come from working in a dealership environment. Due to the shortage of competent technicians, dealerships are now starting to guarantee a set amount of hours per week to their licensed technicians, however to control costs, they have less of them in the bays. We know of many examples where a dealership with 10 to 15 bays will only have two or three licensed technicians and the balance of staff are apprentices or journeyman. This lack of “knowledge base” will backfire over time as quality control of the services being performed for the consumer becomes an issue. Lack of quality work and service works against the consumer. It’s an “attitude” in running the dealership type business.

* New car dealerships do not have enough bays to service the current fleet on the road which means a definite further inconvenience to the consumer in the future, as scheduling service appointments increase in the waiting time. They also don’t have as many dealership locations, therefore the consumer is going to have to drive much further for vehicle servicing.

* New car dealerships are trying their utmost to keep vehicle technology information and tools away from the Independent sector. As the public becomes more informed about this issue, and the issue is brought before Parliament to ensure legal entrenchment of knowledge and tools are given to the Independent sector, the backlash against dealerships could be very strong. The consumer has a “right” to choose. Monopoly style concepts within the capitalist system do not work in favour of the consumer.

* New car dealerships go out of their way to imply to the consumer that their warranty will be void if services are not performed at the dealership and with OE parts. Innuendos are implied to the consumer but they will not put those statements in writing to the consumer.

Now I will be the first one to say that not ALL new car dealerships conduct their affairs this way. I know of some excellent new car dealerships across the country that do work with certain Independent shops, however, they are definitely in a small minority. Too many dealerships will just sell parts to the Independents, creating additional dealership profits for themselves, but they do not respect the Independent as can be confirmed by the above mentioned issues. The best dealerships desire a full professional relationship with the select Independents because they do recognize and respect the Independent’s business; understanding the best Independents work on all makes and models, requires more training which produces a more in-depth of quality staff, and more equipment is required in their location to meet and service the consumers needs.

These issues create opportunity for the entire automotive industry if only everyone could step back and think things through.

Consider the objective is to have a bottom-line profitable business with a satisfied consumer enjoying, as much as possible, their experience with the servicing of their vehicle.

Consider that there are many excellent Independent shops across Canada, and yes there are many “lousy ones” too but let’s focus on the best. These shops are focussed on service and quality to their client base. These shop owners understand professional business relationships and the importance of a win/win business relationship to the success of each partie’s business.

Consider these above average Independent shops now judge the type of relationship they have with local new car dealerships in terms of help and support on technical and tool issues when it comes to serving their client base. They are now actually advising their clientele on which type of new vehicle to purchase based on the quality of the vehicle and whether the dealership will work with the Independent to serve that particular client’s needs.

Consider the power of this business relationship when fully executed in a professional manner. Imagine a new car dealership being in a position to send warranty and service work to an authorized Independent shop for a prearranged fee that works for both parties. Imagine the service levels to the consumer are exceeded. Consider the image the consumer gets of the entire automotive sector working together to serve the consumer’s full needs and desires.

Now I can see the eyes of the industry rolling already about such a concept.

Consider the best Independents are as good as anybody else, but to have an equal chance of working with a new car dealership they have to do much better than the average dealership. The saddest thing I have seen over my career within this industry with competitive businesses, is to see a business competing because they are “required” to compete, not because they have a “desire” to compete. When someone is “required” to compete, their main focus is only on price. When someone has a “desire” to compete, they focus on a “standard” of how to do something with value-added. This elevated standard enhances bottom-line profitability. This would be great for our entire industry to embrace.

Consider that I am only touching the surface about a very in-depth concept, however, consider that with proper dialogue between dealerships and the quality Independent shops in their market area, new business for both parties can be generated. Manufacturers on both sides of the table, WD’s, and Jobbers also benefit from a proactive, positive, constructive business relationship.

History, world-wide, has always proven that protectionism attitudes have only served the “master” who started the idea in the immediate short-run, but never served the “master” in the long-run. Protectionism certainly won’t serve the end consumer. So answer this question honestly, “who are we in business to serve … the “master” or the “consumer?””

Robert (Bob) Greenwood is President & CEO of E. K. Williams & Co. (Ontario) Ltd. and Automotive Aftermarket E-Learning Centre Ltd. Bob has 29 years of industry-specific business management experience. He has developed shop business management courses for independent Service Providers recognized as being the most comprehensive courses of their kind available in Canada. Bob is the first Canadian Business Management Consultant and Trainer to be recognized for his industry contributions when he received the prestigious Northwood University Automotive Aftermarket Management Education Award in November 2003. E. K Williams & Co. (Ontario) Ltd. offices specialize in the independent sector of the automotive aftermarket industry preparing analytical operating statements for management purposes, personal and corporate tax returns and business management consultation. Visit them at www.ekw.ca and sign up for their free monthly management e-newsletter. Automotive Aftermarket E-Learning Centre Ltd. is a leading edge company devoted to developing comprehensive shop management skills through the e-learning environment. Visit www.aaec.ca and take the free overview. Bob can be reached at (613) 836-5130, 1-800-267-5497, FAX (613) 836-4637 and by E-Mail: greenwood@ekw.ca or greenwood@aaec.ca