Service departments hit annual ‘bump in the road’
The “bump in the road” service departments at franchised dealerships often feel in February happened again this year, according to a recent analysis of Xtime metrics by Cox Automotive.
Analysts found that service activity at franchised dealerships in the U.S. decreased in February compared to January, while revenue increased slightly.
Despite it being a historically challenging month for service departments, Cox Automotive discovered the Repair Order Revenue Index improved year-over-year.
The Repair Order Revenue Index for February came in at 139.9, reflecting a 1.6% increase from the January reading. This index rose 4.5% year-over-year and 26.4% from February 2019.
Analysts explained the notable jump from five years ago stemmed in large part to inflation and higher labor and parts costs.
Meanwhile, the February Repair Order Volume Index dropped to 78.8, marking a 4.1% decrease from January. Analysts acknowledged the reading was a 2.2% increase from February of last year, but it also was a 12.3% decrease from February 2019.
Cox Automotive reiterated the monthly Xtime volume and revenue metrics are designed to showcase average service department performance over time, with the information indexed to February 2019.
Analysts added the two top-line measures provide a glimpse into service department performance at franchised dealerships in the U.S.
Xtime provides software that helps auto dealers facilitate more than 10 million service appointments monthly.
Skyler Chadwick, director of product consulting at Cox Automotive, looked to add some clarity to the metrics and recommendations for managers through a Data Point.
“February is typically a bump in the road for service departments, with low consumer spending,” Chadwick said. “The data show that the volume of repair orders was low due to customers not keeping their appointments.
“In such a difficult month, dealers must ensure that appointments are confirmed, which could be as easy as sending a text reminder,” Chadwick continued. “The decline in appointments was consistent across all OEMs, meaning there is an opportunity for all dealers to improve in this area.”