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Automotive Trends: Pickup and Delivery

Automotive Mobility Trends

Trends within the automotive industry are often referred to as “disruptions” given the shift in consumer behavior and technology. However, as Michael Maroone, CEO of Maroone USA, has noted, these disruptions are “pivotal moments” for the industry as a whole. Dealers can benefit from these changes by focusing on long-neglected areas, like fixed operations.

According to NADA, consumers spent $485 billion on vehicle repairs in 2018, but dealers captured only 20% of the revenue. Therefore, there is ample opportunity to advance a dealership’s service department by implementing innovative, competitive programs.

Pickup and Delivery Program

One dealership that seized this pivotal moment is Paragon Honda in Queens, NY. Paragon became pioneers of automotive mobility by implementing a program known as Pickup and Delivery. In collaboration with Google and RedCap Technologies, they have streamlined the process of vehicle services and maintenance- every auto owner’s dream.

First, customers schedule a service appointment either online or using Google Voice Assistant. Then, Paragon Honda uses RedCap Technologies to have the vehicle picked up from the customer’s desired location and returned when the service is complete, adding an unprecedented level of convenience for consumers.

Since the implementation of Pickup and Delivery, Paragon Honda has reported an astounding 475% increase in ride count growth from August 2017 to August 2019. Additionally, their Repair Orders have increased by approximately 56%, and their fixed operations gross profit has increased by around 58%.

If you’re looking for opportunities to create new revenue streams or maximize your fixed operations, please contact a member of the Automotive Services Team.

Dealership Competition

Although the Pickup and Delivery program may seem more feasible for metropolitan dealerships, other dealers, and even service centers, in rural areas have implemented similar mobility services programs. For example, Oxford Automotive in Ohio has a similar program that will even leave a loaner car for the customer in the event of prolonged service.

If auto repair businesses are taking advantage of a Pickup and Delivery program, dealerships are at risk of losing even more of the market share then they already have.

Paragon Honda is using this pivotal moment in the automotive industry to identify how the modern consumer behaves and offer a solution to the modern consumer’s needs. Automotive mobility solutions, such as Pickup and Delivery, are a seamless way to generate loyalty and provide a convenient service for current and future customers. Though this program may not be practical for all dealerships, it forces the industry to reexamine its traditional service model or otherwise risk falling behind the competition.

Author: Alyssa Ruane, CPA | aruane@withum.com

Automotive Services

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