Repair vs. Maintenance
Dealerships and independent workshops efficiency and profitability are often hamstrung by repair work volume versus general maintenance and routine service. Read time 5 min.
During my years running Service Department’s, this was always a big focus for me. How much time are we using for inefficient preventable work and how it is affecting our profitability and customer satisfaction. I was always looking better ways of maintaining and keeping cars trouble-free.
Impact of Repairs
Too much repair work impacts profitability and cash flow (warranty excluded). There are so many variables at play that include and are not limited to time charged vs. time taken.
Technician efficiency:
Technicians lack experience in different repairs
Lack of tooling
Human error in repair
Older vehicles with different issues arising from the dismantling of major components.
These additions are primarily absorbed in the original quote, which is a drain on profit. I know of both Dealer and Independent workshops that will not even entertain certain repairs due to the profit and performance negatives.
Hybrid engine’s have special maintenance needs.
So, what is the answer, you may ask?
Well, this leads me to the importance of regular and well-performed maintenance to reduce the need to carry out larger and often costly repairs (profit drainers). Putting more emphasis on maintenance, you are doing the right thing for the vehicle owner.
Do the right thing for vehicle owner.
Service workshops alike need to have a single focus on more regular maintenance. You will say that the manufacturers dictate the service intervals, which are commonly 12 months/15,000kms, although substantially larger with some European models.
Are manufacturers driving your service business model?
Manufacturers have minimum requirements to show a low cost of ownership to sell vehicles in a highly competitive market, possibly the most condensed market anywhere in the world with the proliferation of brands in this country.
How are you addressing the effects of below world-standard fuel?
Compared to North America and Europe, our driving conditions, substandard fuel quality and under servicing of vehicles have led to:
Sludged engines
LSPI (low-speed pre-ignition)
Gummed piston rings
Partially blocked fuel injectors
Coaked-up inlet manifolds
These commonly known issues, in turn, create the need for costly and less efficient, more extensive repairs. For example, a 20-hour engine repair most times takes between 23 to 33 hours to complete and sometimes beyond, which in turn equates to 2 -10 services missed out or between $900 to $3900 worth of labour and parts.
As labour GP (gross profit) on services range between 70-80% and parts 35-45%, it is an easy equation that more labour equals more profit.
"More labour equals more profit”
Plus, excellent labour efficiency always outweighs parts GP as parts costs are rarely flexible, maintenance labour efficiency will run somewhere between 110-150% depending on the brand, whereas parts GP does not have the same scope.
Effective Service maintenance will, in the longer term, prevent large uneconomical vehicle repairs.
For example, with most current vehicles on the road with extended service intervals, a customer missed one or two regularly scheduled services. The engine sludges up, which necessitates a costly engine strip down with time lost and reduced profitability. Although there is hope with a BG Dynamic Engine Cleaner (BG103K), which negates the need for a costly engine strip down.
The answer to the prevention of these repairs is consistent and proactive maintenance.
Put it simply: More maintenance labour with BG will help your business, but most importantly, it will put your customers first.
Preventative maintenance is easy with BG’s proven specialty products.
Key Takeaways:
Are you carrying products designed for modern vehicles?
Maintenance is proactive, and you control your destiny.
Repair is reactive, and it is putting your business in an uncontrollable spin.
Writer Mike Algie has worked as a Motor Mechanic, Workshop Foreman, Service Manager and Operations Manager for multiple Dealer’s and dealership group’s, in Melbourne, Sydney and Queensland in his 40 years in the automotive industry. Today Michael works for BG Australia in Queensland.
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