Dealerships Make Way More Money From Service Than You’d Probably Guess, So Here’s How They’re Trying Not To Lose It

It would seem like now is the perfect time to own a shop that works on cars. Vehicles on the road have never been older, but “older” in this sense means a car that was built in the early 2010s. These are cars that often require more specialized knowledge to repair than even my early-2000s car needs.

You won’t be surprised to hear that service is the biggest chunk of revenue a dealer is likely to earn, but the actual amount some dealers are seeing may surprise you. The Morning Dump is thinking about dealerships today, as the big National Auto Dealers Association annual conference is about to start.

Right now, you wouldn’t want to necessarily be a Volkswagen dealer, as that brand has been in rough shape. Could a name change for an existing model help? Maybe VW, as a brand, could learn from Renault, which has continued to find ways to grow in a challenging environment.

The most challenging environment in the automotive world might be Le Mans, and this year’s Goodwood events will have three of the most famous cars.

85% To 90% Of Revenue At Stake

Last week, I talked about how direct sales were a threat to dealers. This week, I want to talk about service. If there’s a commonality between both, it’s that dealers have long had a huge advantage that’s slipping away due to both consumer preference and technology.

There’s a piece from Automotive News talking about the importance of dealer service centers:

Service departments can generate between 85 and 90 percent of revenue for a majority of dealerships, Rick Wegley, an instructor and consultant at NCM Associates of Kansas City, Mo., told Automotive News.

“There is not a department in any dealership in America more important than the service department,” said Tom McCollum, chairman of the Audi National Dealer Council and CEO of Forbes Todd Automotive Group.

For most brands, margins on new cars are slim, and used cars represent yet another challenge. Service centers aren’t necessarily a slam dunk, though. There’s the ongoing technician shortage, and parts are getting more expensive, plus less foot traffic to stores means fewer chances to grab customers.

The older the car, the more cautious the owner, said Alan Dibre, chairman of the Acura National Dealer Advisory Board and dealer principal of Acura dealerships in New York and New Jersey.

“Customers are very cautious in terms of what their spending is,” he said. “You’re seeing less traffic.”

There are lots of concerns being voiced here, but this can still be a profitable business, as Car Dealer Guy reported last year:

According to Reynolds and Reynolds’ recently released Fixed Operations Golden Metrics, profit per repair order jumped for dealers in nearly all markets with some variation depending on volume levels.

• As of May, major urban stores averaged $414 per customer pay repair order (RO), up $33 year-over-year.
• Metro stores rose $23 to $349 in total, and community-based stores accrued $268—adding $9.
• Rural location gained $2 and averaged $225 per RO.

As always, there’s an upper limit to what someone with a 2014 Nissan Rogue is going to want (or be able) to pay for repairs. There’s also an issue of convenience. Bringing your car to a dealer to be told that it can’t easily be fixed now, and that the fix will be expensive, is a terrible outcome.

One growing solution is mobile service and more technology to reduce errors/labor needs, which automakers like Ford are pushing with its dealers. Here’s Bozard Ford explaining how it works:

Our strategy mirrors a hospital system’s model, that utilizes urgent care centers to manage less severe cases. Similarly, our mobile vans, equipped with Wi-Fi, handle minor issues like computer downloads or quick fixes directly at the customer’s location. This prevents these simpler tasks from occupying valuable bay space in our main service center.

This strategic division allows our primary service center to focus on its core strengths: major repairs like transmissions and engines, and supporting our used car and accessories departments. It’s an efficient approach that maximizes profitability. While our Quick Lane provides fast maintenance, mobile service extends this efficiency by taking an even broader range of services out of the shop, significantly boosting our overall capacity.

Perhaps it’s because I have an old BMW, but I’d be hesitant to take my car to a BMW dealer out of fear of what they’d tell me. I’m not sure yet what I’m going to do with my Honda as it ages out of its warranty.

VW ID.4 To Become The ID.Tiguan?

Volkswagen’s naming convention for its EVs is kinda terrible, right? The ID.Buzz, the ID.4, the ID.7. Whatever. Maybe you like it, but it’s such a shame when the brand has such fun names as Beetle, Tiguan, and Polo.

Oh, hey, speaking of Tiguan and Polo, VW already announced it’ll use the name Polo for its ID.2-sized subcompact, and there’s maybe a name change coming, according to CarExpert:

It’s expected the ID. Tiguan will follow suit with a redesigned cabin where the much maligned capacitive buttons and sliders will be binned. Like the ID. Polo, the ID. Tiguan should also feature the company’s latest touchscreen infotainment system with faster response times and an improved interface.

Under the skin, the rechristened ID. Tiguan will use a heavily updated version of the MEB architecture. Cheaper lithium iron phosphate (LFP) battery technology is likely to be adopted for some variants, with nickel manganese cobalt (NMC) lithium-ion batteries to continue in longer-range versions.

So ID.4 becomes the ID.Tiguan. It’s not clear if this will happen in the United States, but it makes sense. [Ed Note: ID.Tiguan is not a great name. Just call it Tiguan EV and be done with it. -DT]. 

Renault’s Five-Year Plan Is Working

Renault is the most interesting European automaker right now, and while my focus has been on the clever EVs they’re building, the long-term plan from the company was to shift from dependence on China and Europe towards emerging markets.

This plan goes back a few years to after the pandemic, and according to S&P Global, it’s working:

Among the expected outcomes of this plan is the launch of eight new products by 2027. Several have already been launched and have contributed to the sales uplift in 2025. A key product has been the Renault Kardian, a compact crossover that is based on the automaker’s long-standing CMF-B architecture. Renault highlighted the model’s contribution to the growth it saw in Latin America and a 44.8% y/y uplift in Morocco.

Another product contributing to this improvement is the Renault Grand Koleos. Built in South Korea and born out of the relationship between the French automaker and China’s Geely—from which this model sources the GEA—the midsize crossover helped boost Renault’s sales in South Korea by 55.9% y/y in 2025.

Overall, this has meant that sales in Renault’s international market represented a 30.5% share of its worldwide sales, up from 28.6% in 2024.

The whole world wants cars, but the whole world isn’t going to be buying electric cars yet. Being able to build cars for the EU market and emerging markets isn’t a giant business, but it ain’t a small one, either.

Goodwood Is Getting The Le Mans 1-2-3 Ford GTs

I don’t know if I’m going to Goodwood this year, but there’s at least one more reason why I’d consider it: The 1-2-3 finishing Le Mans Ford GTs from the 1966 24 Hours of Le Mans will be there.

For the first time in a decade, the three Ford GT Mk IIs driven by Bruce McLaren and Chris Amon, Ken Miles and Denny Hulme, and Ronnie Bucknum and Dick Hutcherson will not only appear together, but also run.

These legendary cars – chassis P/1046, P/1015, and P/1016 – will take to the Goodwood Hill during the Festival of Speed as the event celebrates some of motorsport’s greatest showdowns with the theme ‘The Rivals – Epic Racing Duels’. Entirely apt, as 2026 marks the 60th anniversary of the intense battle between the combined forces of Ford Motor Company and Carroll Shelby’s Shelby American, and Ferrari.

In September, the trio will reunite once more at Goodwood Revival, where they will run on the historic Motor Circuit, offering fans a rare chance to witness these icons in action.

Sweet.

What I’m Listening To While Writing TMD

I just learned that the opening orchestral sound from Portishead’s “Mysterons” is from a British TV show called Captain Scarlet and the Mysterons. There is just so much incredible and weird puppet-based TV from the ’60s I never knew existed (I learned this from Bandsplain, FYI).

The Big Question

Who was the last person to fix one of your cars?

Top photo: Ford