Cox Auto says December service volume went up but profits went down

A new Cox Automotive report has revealed that December service volume increased by 0.7% while revenue decreased by 0.7%.

Although the changes are largely insignificant, they stand in contrast to a year which saw more profits and lighter workloads for fixed operations departments in the U.S. The Cox Auto study noted that revenue from repair and maintenance orders had grown 7.8%, while service volume had dropped 3.4% year-over-year.

The change is minute, but the report has important insights for service departments and the dealerships which run them. Many store owners are concerned that the expense of running a fixed operations team will be less sustainable as technology improves. EVs are a major contributor to this anxiety, as they use fewer moving parts and require less maintenance. While the slight difference in monthly numbers is hardly indicative of a turning point in service volume profitability, it does highlight the unpredictability of today’s auto market.

The future of automotive retail has become increasingly difficult to pin down, thanks to the proliferation of transformative tools in every dealership department. One things is for sure: the tactics of today are sure to become outdated far more rapidly than the strategies they replaced. Store owners are now carefully considering what elements to cut or add in this transitionary period. If service volume brings in less money, there may be some who take the drastic step of scaling back fixed operations.

Regardless, some experts believe that dealers should avoid jumping to hasty conclusions over the future of fixed operations. As long as there are vehicles, repairs and maintenance will always be needed. Whatever form technology and consumer demand take in the coming decades, store owners should prioritize training and equipment, so that they can support their communities and business interests in the future.

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