Dealers could boost service revenues over GM recalls

Article by Christian Andrei, on May 27, 2014

The huge number of vehicles that General Motors has so far recalled for safety issues seemed like a bad news for dealers. So far this year, GM has recalled 13.8 million vehicles in the United States, although some vehicles were counted more than once due to multiple issues. The recalls covered 2.6 million Chevrolet Cobalts, Saturn Ions and other small cars for faulty ignition switches tied to 13 deaths.

On the other side, such recalls could mean a thriving business opportunity for dealers too. After all, a large chunk of $1.7 billion that GM has allocated so far to cover the cost of 30 recalls would be for repair work and reimbursement for loaner vehicles at dealerships.

Likewise, service advisers will have the opportunity to sell other parts or components to vehicle owners whose units are up for recall repairs. Richard Gonzales, service director at Vera Motors in Pembroke Pines, Fla., told Automotive News that there is no question that dealers will have a “big upsell opportunity” when recalled vehicles come to their shops.

Despite the opportunity, the barrage of recalls represents unpleasant news for dealers. After all, the huge number of recalled vehicles means that a large amount of parts needed to fix them.

So far, dealers are experiencing delayed repair parts and cramped lots as they have been compelled to stop sales of several key models.

Cort Johnson, service manager for Larry H. Miller Chevrolet in Murray, Utah, remarked that he is worried that negative effect of the recalls on vehicle sales would also lead to lesser service revenues at his dealership “two years from now.” [source: automotive news - sub. required]

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Back in 2009, Nissan first introduced the Nissan Leaf, the company’s first all-electric vehicle. LEAF stands for Leading Environmentally-friendly Affordable Family car and this particular EV has been considered as...
by - December 3, 2016
In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Those familiar with racing know that Marco Wittmann’s win during the 2016 Deutsche Tourenwagen Masters held last May was noteworthy as it was his second title in four seasons. In...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries