Extended hours: the new normal?

The president of NAPA Canada says independent repair shops that want to compete effectively against new-car dealerships may have to consider extending their hours of operation.

Speaking to Autopro shop owners at their 30th annual convention in Niagara Falls, Ont. last week, Robert Hattam said more and more dealerships are staying open late into the evenings and all day on Saturday.

“This is the new reality. That’s the push. There’s going to be extended hours in our business,” he said. “We may have to service of the consumer at hours that we’re not used to.”

He acknowledged that the issue is a sensitive one that causes anxiety about quality-of-life issues.

“Everyone’s got the fear factor about working on a Saturday. But this is not a question of working on Saturdays. It’s a matter of servicing your customer,” he said. “It’s about organizing your business in such a way that you’ll have people there to serve those customers. If your customers want that service, you’re going to have to think about it.”

“No one’s going to force you. You’ll have to decide whether you’re happy with 2% sales growth or you want your business to grow at a rate of 8-10% a year. It depends on how motivated you are to fight for your marketshare.”

Hattam repeatedly stressed that new-car dealerships are the real competitor to Autopro shops, not other independent automotive repair shops.

“They’re doing a lot of things to retain their customers. They’re financing longer. They’re giving out maintenance packages that they weren’t giving out in the past. They’re being more competitive on the pricing of repairs.”

He said another big issue that is coming down the track is telematics – the direct link with consumers to get back into their repair bays on a continuous basis. He said Autopro is “doing some tests” on an aftermarket system that will give shops a fighting chance on the telematics front.

“We’re developing a strategy to overcome the telematics issue, because that’s going to be the biggest issue that we face from a customer-satisfaction perspective,” he said.

He also encouraged Autopro shop owners to invest in their showrooms.

“Think of the customer. Think of how you feel when you shop. What is the environment you’re looking for,” he said. “It’s important that you keep your showroom maintained and upgraded. Think of different ways that will satisfy your customers.”

Hattam also offered perspective on recent economic trends, calculating the impact they are likely to have on the automotive repair industry. In particular, he discussed a Canadian economy marked by slow growth, low inflation, even lower interest, and rising consumer debt.

“When you look at these challenges, it is just a template for what we need to do in moving forward in our businesses. It’s not doom and gloom, it’s a challenge,” he said.

For example, underperformed maintenance continues to rise, begging a response from the auto repair industry.

“People are not maintaining their vehicles the way they should. And that has several consequences for us. There are things we need to do collectively to address that,” he said. “For one thing, it’s not good for the environment when vehicles are not well maintained. It’s not good for the consumer. At some point they’re going to have to repair those vehicles and it’s going to cost them more. You have a role to play in underperformed maintenance. You see your customers every day when they come in. And that’s something you have to explain to them.”

He particularly urged them to start considering their ability to service luxury vehicles, including European brands like Audi, BMW, and Mercedes Benz, which is one of the fastest growing segments in the market. The number of luxury vehicles on Canadian roads is expected to grow from 1.7 million units (or 7.7% of the total) in 2011, to over 2.8 million (10.9%).

“We’ll see significant growth in this area,” he said. “Are we in that market? It’s an opportunity for us. Luxury vehicles are generally more expensive to maintain, so it’s a good transaction. Luxury vehicle have lower scrappage rates, so they’ll be in the market for a longer period of time.”

Owners of luxury brand cars are particularly OE loyal, he said.

“So what are we doing to attract those customers into our operations? We can’t just leave that segment of the market to the OEs,” he said. “All of our Autopros should be able to service those vehicles in the future.”