Service Department

There are two basic types of Service Departments.

* Product specific service facilities.
* System specific service facilities.

The most common type of product specific service facilities are new car dealership’s Service Departments. These Service Departments must be completely educated about all of the models being serviced including those that may be more than a few years old. Although they specialize in the type of new vehicles that they are franchised to sell, they usually are capable of servicing other makes also.

Some service facilities repair or specialize in one system such as transmissions or performing tune-ups. These facilities are referred to as system specific service facilities. These specialty shops are usually limited to a few types of repairs. The Service Department and technicians must have an in-depth knowledge of the systems being repaired.

Years ago, new cars made money for the dealer. Today, as a rule of thumb, they don't. After factoring in overhead expenses, floor plan interest, advertising, competition, etc., most dealers make very little on new cars. This is part of the reason that the dealers are looking to their Service Department to recoup that lost income.

As with many industries, product is no longer the profit point. Instead, the product – the vehicle - is sold so that the dealer can make money in the Service Department. As auto manufacturers find it harder to distinguish themselves by characteristics such as products or pricing, customer service has become the last critical competitive advantage.

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