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Jason Unrau

Jason Unrau Freelance Contributor

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Auto Tariffs (and Threats) Make Fixed Ops More Important Than Ever

‘45’ keeps everyone on their toes, there’s no denying that. The hardball tactics for NAFTA negotiations, steel and aluminum tariffs, and now the looming threat of auto tariffs are just a few of the things you didn’t see coming beforehand.

It’s common knowledge at this point that auto sales are deeply affected by the tariffs. Of course, that’s already being seen in manufacturing from the steel and aluminum tariffs as the cost to build cars increases. And it’s forecasted to have a detrimental impact on car sales if the auto tariffs proposal gets off the ground. Salespeople, general managers, and dealer principals all shudder at the potential impact.

But as service departments in the franchised automotive world, the impact doesn’t seem as great. If anything, it looks like an opportunity to shine bright. Truth be told, it is. Make no mistake, though. It’s more than an opportunity. It’s a responsibility to keep your dealership moving strong, through thick and thin.

Cinch the Belt Now

Sales departments can’t prepare ahead of time aside from buying more inventory before tariffs take effect, and even that strategy may not work out too well. Plus, it could all be for nothing -even hurting more than helping – if auto tariffs never go into effect. But fixed operations departments can be prepared if the shoe drops, and none of the changes have any risk associated with them if the industry isn’t dealt the next blow.

Staff Up

It’s been driven home for months now, but filling every technician bench is going to be important. If cars aren’t selling, car owners are going to be fixing. Service department volumes are inevitably going to increase and you’ll need to be fully staffed especially on the bench.

Take a look back at previous posts for recruiting technician talent. It’s the first step to bolstering the service department.

Train Up

Your team can’t afford missteps when the landscape for fixed operations gets ultra-competitive. Everyone needs to be fully invested and trained to do their role well. That means product training where possible, process training as a routine, and technical training for those who need it.

Trainers are going to be in higher demand and their rates are going to go through the roof if you wait. Begin fixed operations staff training now and keep it going indefinitely.

Track Progress

If you’ve been a little lax because things have been going well, get back to tracking your fixed operations numbers. Monitor department gross, hours per RO, and ELR, and compare to each individual. Identify if you have a weak link and train them up. If you haven’t done it before, implement a strict policy on discounts or write-offs – only management can make the call.  

There are tons of opportunities to shore up the fixed operations departments to keep your dealership not just maintaining but growing in a hectic, unstable automotive climate. Look at parts inventories and obsolescence to free up cash flow. Offer birddogs to employees for sales referrals (or bump them up). Create ad campaigns at the dealer level for service, parts, collision repairs, and accessories.

Do what it takes to push stable growth. There’s a good chance your dealership will rely on it in the near future.

Jason, how bad do you think it could get for dealers on the sales side of things? 

Mark Rask

Thx for the info....I guess uts time to start beefing up my service dept marketing!

Jason Unrau

Scott, I truly think it's all dependent on how far the tariffs are implemented. As well, some areas will be hit much harder than others. For example, blue-collar communities are likely to experience more dramatic sales slumps because some car shoppers simply won't be able to afford a car! 

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