With staffing, parts, and new car shortages, increasing costs, and ever-changing protocols, parts departments have evolved immensely since 2020. 2022 was no exception with constraints leading to innovation, breakthroughs, and new priorities across the board. Here are the top trends we witnessed in 2022 and our take on how dealers might use them to inform a successful 2023.
A shift in thinking
One trend has become crystalized this past year: across the country dealers and owners have grown a new understanding and appreciation for the value in their parts departments. We think this change has happened for a few reasons. Firstly, new car sales have been deeply affected by shortages, while parts and service maintenance have remained relatively stable. According to data from S&P Global Mobility, the average age of an American vehicle has hit a new record at 12 years and 2 months old- meaning folks are holding onto their vehicles longer resulting in more demand for regular maintenance and repairs. With online part sales a viable route to extending parts department sales far beyond geographic markets, it appears upper management has begun to grasp the truly unlimited expansion potential in parts sales. Thirdly, with ongoing part shortages, having the right parts and replenishment settings has become a powerful avenue for selling to competition and outpacing parts departments with a less optimized inventory. Parts departments also maintain customer relationships. According to a Cox Automotive survey, 55% of consumers said they “go to a dealership because its service personnel knows their vehicle better.” Make 2023 the year you translate understanding the value in your parts into actionable support and investment.
Increasing obsolescence
2022 continued a trend we’ve been witnessing for a number of years across manufacturers: increasing obsolescence. There are a number of factors that are contributing, but one seems to be underlying in almost all cases: Parts Managers don’t have enough time to be proactive in their inventories. Maintaining a healthy inventory requires ongoing auditing and optimizations. Without monthly reconciliations and regular physical inventories, there’s simply no way to know where things are going wrong and how to stop the obsolescence domino effect. Obsolescence over 15% that keeps coming back is a major red flag. Ultimately, your goal should be 0%- we’ve seen it! If you can get a handle on your obsolescence in 2023, the possibilities are truly endless.
Support shortages
This past year saw a remarkable increase in new-to-the-position parts managers and parts and service department employees. With this influx came a demand for parts department training and support. Even for seasoned employees, the industry changes so quickly that ongoing education should be part of the plan for every dealership. Though, as we previously discussed, understanding of the value that lies in the parts department has increased, dealers are still struggling to find and engage the support and education that is required for success and expansion.
PartsEdge saves Parts Managers hundreds of hours each year by taking all the guesswork out of DMS management, sourcing setup and optimization allowing them to focus on creating a successful operation. Our expert team is available on-demand to guide your operation to record success. As a result, our clients see an average 20% drop in total inventory, 15%+ less idle inventory, a 50% increase in ROI, and a 20% increase in parts sales. If you’re ready to put our parts power tool to work, send us a message! Our testimonials speak for themselves.