Distance tolerance differs for automotive sales and service

I saw a brief but fascinating report in today’s Automotive Digest:

The majority of potential car buyers are willing to travel an average of 125 miles when shopping for a car.

But they’re only willing to travel 27 miles for warranty service, after the sale.

The story was distributed by PR Newswire, citing research from CarGurus.com… and it reveals just one conundrum in the vast set of challenges facing a scaled-back automotive industry.

Implications: Picture the “new car supermarket” that attracts people from a hundred miles away, based on volume-driven low prices. What kind of service-based offer (or loyalty program) could help them bring customers back for their service needs?

Picture the local, service-oriented car dealership, which seems to be always the bridesmaid (providing service to owners of the brand they carry), but never the bride (the place where the customer buys the car). In what ways might they leverage the higher-frequency relationship they have with service customers… in a way that yield more vehicle sales opportunities? (One might need vehicle service several times a year, but a new vehicle only every few years.)

Picture the manufacturer caught between these two different constituents. In a world where you’re dramatically reducing the number of dealerships where your product is sold, how can you maintain a service relationship who’s accustomed to dropping their vehicle off “just down the street” when it needs service? If the dealership is now (more than 27) miles away, how might you avoid losing that business to a local Pep Boys, Precision Tune, or independent car service company?

If you're the local independent service provider, how can you capitolize on the churn that will result from all of these dealership closures? (Lots of service customers might be up-for-grabs right now!)

While many dealerships have vanished completely, might they be replaced by “service-only” satellite locations that carry the name plates of major manufacturers? (Chevrolet, Toyota, or Ford service centers… which provide service after the sale or warranty repairs, but which do not sell cars?)

Sometimes, consumer trends can influence corporate decisions. In this case, perhaps the converse is true; corporate decisions (the closure of so many auto dealerships) will be a spark a change in the way people consume automotive products and services.

Mike Anderson