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As fixed ops increase role as profit centers, some in Congress eye the right to repair

November 22, 2010

Dealers’ service and parts departments represent an ever larger portion of dealers’ profits, according to a recent analysis by NADA. Last year, the departments accounted for 48 percent of profits, The Wall Street Journal reported.

 

The growth could be attributed to the growing complexity of cars and the required advanced diagnostic tools. Fewer independent repair shops can afford the pricier factory diagnostic tools, and shops servicing multiple brands have been hurt most of all because of the high price for multiple lines’ repair tools and information. 

But the study’s results may not be good news for franchised dealers in the long run. A bill currently in Congress would require OEMs to provide independent service shops the same tools and information that they provide for franchised dealers.

 

Recent statistics about the profitability of franchised dealers’ fixed ops could give an extra boost to the bill’s supporters, who charge that independent service shops are getting squeezed out of the market by the exclusivity of the factory-franchised dealer connection.  

Also at the heart of the debate: charges that OEMs which do sell information and tools to independent service shops sell the same products to franchised dealers at lower rates, sometimes as much as 10 percent to 15 percent less, according to the Journal.

 

Manufacturers point out that they have already taken steps to help independent shops. According to the Wall Street Journal, manufacturers "reached an agreement with some in the repair industry in September 2002 in which the factories committed to giving independent shops the same information and training they provide to their dealerships.  

A forum also exists for independent shops to complain about inadequate information and receive carmaker responses. While they admit things have gotten better, many repair shops and AAA, the motorist advocacy group, say that information and tools can still be hard to obtain.

 

Carmakers say they are complying with the existing agreement and have made information and tools available to the independent industry.

 

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