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August 26, 2022 06:00 AM

Why fixed ops appear to be at odds with EVs

Repair needs will shrink, so dealerships need to stress customer loyalty to retain their business over the long haul

Steve Mertl
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    Jake Fisher
    SUPPLIED PHOTO

    Fisher: “All things being equal, electric vehicles are going to be much better when it comes to problems and repair.”

    Automobile dealers are seeing early evidence that electric vehicles will change the service landscape and the way they compete with independent shops.

    With fewer major moving parts — no pistons, crankshafts, valvetrains or multispeed transmissions — EVs are expected to spend less time in service bays for maintenance or repair. That means dealers will have to adopt fresh strategies to keep that business once EV warranties expire.

    “Generally speaking, our mission to dealers is to reduce the focus on dollars per visit and increase the focus on retention,” said Andrew Harkness, Nissan Canada’s director of aftersales and quality assurance.

    Related Article
    Canadian dealers prep for changes in service departments as EVs approach

    Dealers such as suburban Vancouver’s Morrey Nissan, which has sold the Nissan Leaf EV since its 2011 launch, have absorbed that message.

    “There’s no doubt we’re going to have to pivot, like we are in every corner of our business, into operating in different ways,” General Manager Jarrett Morrey told Automotive News Canada.

    LESS TIME IN THE SHOP

    Although only a small percentage of vehicles on the road are electric, predictions that they will make fewer and less costly shop visits are being borne out, said Tim Reuss, president of the Canadian Automobile Dealers Association (CADA), which represents 3,200 franchised dealerships.

    Anecdotal feedback from dealers in British Columbia and Quebec is reinforced by data compiled by U.S.-based Consumer Reports. A 2020 study based on surveys of U.S. and Canadian EV owners found that EVs and plug-in hybrids had 50-per-cent lower average lifetime repair and maintenance costs per mile compared with internal combustion engine (ICE) vehicles.

    “Generally, consumers are going to wind up saving money when it comes to repair and maintenance,” said Jake Fisher, Consumer Reports’ senior director of automotive testing.

    “Long term, all things being equal, electric vehicles are going to be much better when it comes to problems and repair.”

    That squares with Harkness’s experience so far with the Leaf. Dealers normally see the Leaf once a year, “sometimes less,” though some come in to have winter tires mounted, he said.

    LEAF LOYALTY

    NISSAN

    Nissan’s experience with the Leaf EV suggests customers want dealerships to service their vehicles as opposed to going to the aftermarket.

    But Harkness and others said that fixed-ops managers should not be alarmed. With the Leaf, for example, total customer retention over 10 years is about the same as for ICE vehicles, he said.

    “We’ll get a little less of the business upfront,” Harkness said, referring to an EV’s longer service intervals. “But we’ll get the customer a little later in life when they require a little bit more repair as the vehicle ages.”

    CADA’s Reuss agrees, noting that most owners seem to prefer returning to the dealership for ongoing service, at least for now.

    “The overall impact on those dealerships is neutral, if not positive, because what they are not getting on a per-unit basis, they are getting because every single EV is coming back to them,” he said.

    Dealer Morrey echoed that view.

    “With the Leaf specifically to date, we’ve experienced a high, high amount of loyalty. Retention is strong because for sure the consumer’s relying on the dealer to manage and help with all aspects of the vehicle, as opposed to going aftermarket.”

    SUPPLIED PHOTO

    Harkness: Dealers normally see the Nissan Leaf once a year, “sometimes less.”

    Independent shops will expect to compete for that business eventually as EVs age, said Jean-François Champagne, president of the Automotive Industries Association, which represents the aftermarket.

    “Survey after survey shows Canadians want to have options.”

    WE BUILT IT, WE KNOW IT

    Consumer Reports finds EVs among the least reliable vehicles, said Fisher, “not because of their electric powertrains but because of the other componentry that they put in these vehicles,” such as electric door handles. EV dealers recognize this and are making efforts to persuade customers that a dealer service bay is the best place if things go wrong, Reuss said.

    The message to Nissan’s customers, Harkness said, is “we built your vehicle, we know it best.”

    For instance, a dealer service adviser can educate owners about the effects of regenerative braking on EV rear brakes, which are vulnerable to rust and corrosion from underuse. Nissan also offers lifetime free battery checks.

    “That encourages customers to come in and get full details on the health of the battery,” Harkness said.

    The overall service retention rate for all Nissan vehicles is only about 50 per cent, he said. Dealers need to be more “attractive, trustworthy and transparent” to cement relationships over a vehicle’s life cycle.

    “With EVs, it becomes even more important, because [customers] have less and less reasons in the first few years to come back,” Harkness said.

    “They stray far from the original dealership, and that’s it. We want to give them reasons to come back.”

    That means being proactive, said Morrey, offering complimentary services in hopes customers return when their EVs needs care.

    “Before,” he said, “we relied on them to come to us, and we engaged at that point.”

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