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Franchised dealers are missing out on £1.5bn worth of revenue annually by failing to sell service and parts for items identified by vehicle health checks, according to a new survey.
BTC, the automotive training and software company, has estimated this loss equated to £330k per dealer in potential revenue and £165k potential gross profit.
The results are based on data collected from 2.3 million vehicle health check transactions, carried out by 825 dealers between July 2011 and July 2012.
Of the £305m worth of red and amber work identified, only about a third (£108m) was actually sold. According to BTC, the lack of effective follow up on the these items means that dealers are allowing independents and fast-fit operators to benefit from the unsatisfied demand.
The report estimated that each dealer is missing out on additional revenue of £136 per vehicle serviced. In addition, vehicle health checks were only completed for 72% of the dealers’ service customers in the period.
“Even where there is a compelling case on the grounds of safety or legal compliance, dealers are not able to convince half of their customers to have the work done on site, effectively handing over franchised dealer expertise and revenue to third parties, like independent repairers or the rapid fit sector,” said Herbert Lonsdale, BTC’s managing director.