It is an old trucking industry adage that while the sales department sells the first truck, the service department sells the second, third and fourth trucks. According to David Gerrard, senior vice president of distribution at Navistar, “Without an effective relationship on the service side of the house, it is very difficult to maintain the customer relationship.”
Dealers seem to be grasping this concept, if recent news from dealer networks is any indication:
- Volvo Trucks Strengthens Dealer Support Capacity in Southeast;
- C-B Kenworth Expands Customer Support with Parts & Service facility in Auburn, Maine;
- Custom Truck Sales Opens Parts & Service Location in Brandon, Manitoba;
- Elite Support Network Continues to Raise Bar for Customer Service; and
- International Truck Dealers Make Significant Investments Aimed at Delivering Value for Customers.
Gerrard says that in the past year the International dealer network invested nearly $60 million to renovate or add more than 250 additional service bays and increased service hours by more than 22%.
According to Mike Conroy, Peterbilt’s dealer development manager, “During the past year many dealerships invested in their service business to improve customer satisfaction, in areas ranging from technician training, both on-line and classroom settings, to additional bays.”
Volvo has seen “a strong concentration of expansions and renovations at Volvo Trucks locations in the West and Southeast regions and also in Texas. These areas have introduced more than 460 truck service bays and 500 Volvo technicians into the Volvo service network since January 2010,” says Brandon Borgna, spokesman for Volvo Trucks.
What's Behind the Trend?
There is no one thing responsible for these investments, but factors such as increased vehicle complexity, market share gains by certain OEMs, regulations and emerging technologies such as natural gas fuel systems factor into dealers’ decisions to add capacity.
“Vehicles are getting very difficult and expensive to maintain,” Gerrard says. “More customers are focusing on their core business and don’t want to worry about maintaining their trucks. This creates more intensity on dealers to address those needs for their customers.”
Since 2009, Dick Sweebe, president and CEO at The Diamond Companies, estimates he has spent about $16 million on expansion, which included increasing service and parts capacity. The move in part was in response to vehicle changes but also to accommodate customer demand.
“I did not have enough capacity to get them in and out in a timely manner,” he says. In May, Diamond Companies moved into a brand new facility in Springfield, Mo., that increased the number of bays at that location from eight to 24.
Next page: More bays, more scheduling options
[PAGEBREAK]Bay capacity has been a concern for many OEMs and dealers. “Capacity has been a focal area throughout the Volvo Trucks’ North American dealer network," Borgna says. "Since January 2010, bay capacity has increased more than 20%."
Additional service bays also offer scheduling options for dealers. “Once you have rooftops in place, then you can flex capacity,” Gerrard explains. You do this by looking at way to expand hours of operation, including adding a third shift or offering service on weekends.
Other Ways to Grow
However, adding bays is not the only way dealers are increasing their service capacity. Some dealers are dedicating technicians to specific fleet customers. “Technicians go to work in the customer’s facility to get the work done and it eliminates them having to bring the trucks back and forth to the dealership,” Sweebe says.
Another extension of the traditional service offering is mobile service trucks. “These trucks are available to go to customers’ lots. Typically they are well equipped in terms of power and diagnostics, and they carry a full spectrum of parts inventory that is aimed toward traditional kinds of maintenance items or failures,” Gerrard says.
As for the future, OEMs are confident their dealer networks will continue to make the investments needed to meet customer demand.
Borgna says, “Volvo Trucks’ focus on vehicle uptime will continue to define the refinements and investments made throughout the dealer network. Customers can expect greater utilization of time-saving technologies, like QR Codes for faster vehicle check-in, Volvo’s web-based ASIST service management tool and Remote Diagnostics. Standard on all Volvo-powered Volvo Trucks, Remote Diagnostics is proven to increase vehicle uptime by providing proactive diagnostic and repair planning assistance with detailed analysis of critical diagnostic trouble codes.”
Peterbilt dealers also will continue to expand their service footprint throughout the U.S. and Canada, according to Conroy. “And they will remain committed to providing their employees the training necessary to care for their customers and grow their business.”
Ready for the Future
With the recent investments he has made, Sweebe feels his dealerships are all positioned for the future.
"‘We may look at going into some other markets if we feel the need, but certainly we are going to continue to enhance our service departments.” He says this will include investment in infrastructure that will accommodate servicing LNG and CNG vehicles.
“As opportunities present themselves in order to take on more service business, we will do whatever we have to do to be able to accommodate it.”
Gerrard says International dealers will continue to make investments in service going forward. “Our dashboard puts us at another $40 to $50 million in the course of the next 12 months and that is not pie in the sky. There are shovels already in the ground.”
He also expects increased investment by Mexican dealers in the area of $6 million after already having invested $6 million in the past 10 months. “Mexico is becoming increasingly important because of cross-border traffic,” he adds.
Conroy also believes dealers, rather than independents, “are in the best position to support today’s customers due to numerous new products introduced to the marketplace over the past decade, ranging from new vehicle designs to the various levels of emissions regulations.”
However, Sweebe says many dealers’ bays are filled with warranty work and that while in theory adding capacity would help dealers gain access to the second and third vehicle owner, the reality is many dealers are not able to take on service work from those customers at this time.
“What we have tried to do is divert some of that through our leasing operations,” Sweebe says, “because they can do PM work and other light maintenance work. And we are hoping that as warranty work slows down –we have seen some slowing – that we can get more of the after warranty work that is out there.”
He adds, “Parts and service are the lifeblood of the dealership. It’s what pays the bills.”