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Independents' Pricing Advantage Over Dealerships

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May 1, 2018—Back in November, Jim Lang, president of Lang Marketing, reported that dealerships have been gaining more market share. In that report, Lang says that over the past two years, dealers have increased their share of the independent repair market, from 21.1 percent in 2014, to 21.4 percent in 2016.

Lang previously discussed this topic with Ratchet+Wrench, detailing the hits many dealerships took from the recession, and how they were subsequently able to rebound.

“Surviving dealers found it necessary to emphasize used car sales, and service bay sales,” Lang says. “They combined those by offering service bays as a bonus.”

Lang says that more and more dealerships are adding quick service bays, which has repositioned their hold on the repair market. However, Lang says that independent shops still have a pricing advantage over most dealerships, and are able to work on a much wider array of nameplates.

“Hourly labor rate for dealers is near $110 per hour—and it’s about 25-30 percent less than that for average independent shop,” Lang says.

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