Franchise dealers missing out
UK franchised dealers are continuing to miss out on significant aftersales revenue opportunities due to a failure to sell urgently required work identified during the service process.
Annual data from electronic vehicle health check provider autoVHC has revealed that the UK franchised dealer sector missed out on as much as £429 million in 2017, having managed to sell only 53% of Red work. Red work is identified as faults that if not addressed pose a serious safety risk and in many cases will mean the owner will be breaking the law if they continue to drive the vehicle.
autoVHC’s data, which sampled 500 UK dealers in 2017, revealed the average UK dealer failed to sell £87,600 worth of urgently required work over the 12 month period. Across the sample group this equated to £43.8 million worth of lost sales, meaning a total lost sales figure of £429 million across the UK’s 4,900-strong franchised dealer network.
Chris Saunders, Business Unit Director at autoVHC, said, ‘This continued trend of missed sales opportunities is worrying, particularly as many dealerships are now relying on aftersales revenue to offset any losses associated with the recent dip in new car sales. Clearly, there are failings in the way technicians are communicating with motorists, and these need to be addressed as a priority.’
In addition to the missed sales opportunities, autoVHC’s latest data also indicated a drop in aftersales activity during 2017. Over the 12 month period the average dealer saw 3,320 vehicles presented at its service department, a 19% drop from the 4,080 vehicles seen during the course of 2016.