A Volvo service technician uses the Volvo VIDA application in a dealership service bay.

As customers start returning to automotive showrooms, they seem to be avoiding service departments. According to NADA figures (as reported by Richard Truett in the November 2, 2009 issue of Automotive News), parts and service revenues at dealerships are dropping. There are a number of reasons for this: fewer new car sales and increased quality means less warranty work; higher parts and service costs (at most dealers) drive customers into independent repair facilities (IRF); improved consumables like engine belts, hoses and spark plugs tend to last longer; modular design practices that promote component exchange makes it faster/cheaper to replace items than to repair them. These and other trends have caused parts and service revenues to drop more than $3B, from 2005 to 2008, at new car dealerships.

I bring this up as another cause of concern for OEMs. (As if they need another worry.) Success or failure for dealership channels relies, in large part, on a healthy parts and service business. However, trying to increase service revenue by decreasing product quality really isn't an option-regardless of the practice of planned obsolescence. Today's customers demand high quality, therefore the question for OEMs is how to restore their dealer's profit centers-parts and service-without adversely impacting product quality and customer satisfaction.

The answer may lie in the complexity of modern automobiles. Dealers are uniquely qualified to service and support the deep-and rapidly changing-technology that is now standard on even inexpensive cars. Truett quotes John Baumgardner, service director at Orange Buick-GMC in Orlando, FL as saying, "'Diagnosing the problem is now more complex than doing the repair work.'" After describing how vehicles have up to 15 programmable modules, Laura Terzs, Ford's manager of diagnostic service products, states that, "'The trend now is to reprogram the modules rather than replace...So we release a software fix to the dealer vs. replacement.'" This suggests that OEMs must provide dealers with advanced diagnostics and software capabilities to ensure they have a service and parts advantage over independent competitors.

Truett writes, "Automakers are acutely aware that high satisfaction scores are a key way to retain customers, so they want to make service department visits infrequent and fast." That may sound as if the goals of OEMs are at odds with the goals of dealers-as they try to increase service revenue-but the reality is different. While it's true that OEMs are trying to reduce the amount (and cost) of service needed by any one vehicle, their focus on maintenance efficiency can give dealers the ability to increase the number of vehicles they service. If successful, the effect would be to switch the revenue equation from servicing fewer vehicles more frequently, to servicing more vehicles less frequently. And more vehicles being serviced typically results in greater parts and service revenue. Ultimately this is a battle for market share and as vehicles get more complex, smart OEMs can give their dealer channel a competitive advantage.

One OEM that has done this successfully is Volvo. Using Enigma technology, the Volvo diagnostics system deployed at most of their dealers has dramatically reduced service times; to the point where each service bay can now repair one additional car per day. If a dealership has eight service bays, that's 8 more cars each day-48 cars each week and almost 2500 cars each year-that can now be serviced by the dealer, without ever expanding their service department. That additional volume gives dealers the flexibility needed to get creative, finding new ways to improve customer service and brand loyalty.

Enigma improves maintenance and repair productivity-it's a one-stop-shop for all service and parts information. Providing technicians and parts managers with the information they need, instantly and accurately, is the first step to ensuring service visits are successful and fast. Helping OEMs find ways to improve dealer service and support is not a simple problem to solve, but it's what we do. As one of our customers said, "Enigma is the aftermarket expert."