According to ASE (incorporating Trevor Jones), the average overall labour efficiency of dealers' service departments fell from 83% in 2008 to 80% in 2009. Our own data record a similar fall and you have to go back more than a decade to find service labour efficiencies regularly exceeding 100%. Bodyshops, too, have seen overall labour efficiencies declining over time.

On a brighter note, ASE reckons that car sales per sales executive increased by 22% from 144 in 2008 to 176 in 2009. Of course this improvement could have been distorted by redundancies due to the recession, but our own figures - based on new car sales per member of staff - confirm a near-20% improvement over the last ten years.

Given that around 70% of gross profits generated in a dealership go on paying wages and salaries, efficiency is a key factor when it comes to improving bottom line profits. Obviously if you can get more sales out of fewer people then you make more money. Recessions create the opportunity to improve efficiency and get more from less. Indeed the more successful dealer groups over the last two years have cut staff and actually increased turnover or at the very least balanced staff numbers with changes in turnover.

The apparent improvement in car sales efficiency has never been researched to our knowledge, but anecdotal evidence suggests that the internet (and computers more generally) and the appointment of fleet sales specialists could be the reasons. In other words, dealerships have got more from less thanks to technology (the internet) and through specialisation. Sadly, though, it appears that service departments and bodyshops haven't applied 'more power to your elbow' or embraced specialisation.

Clearly workshop overall labour efficiency is complex - composed as it is of productivity, or how fast technicians work relative to standard times, and utilisation which depends on having plenty of paying work available. Utilisation will have undoubtedly been affected by the recession, but looking at the longer term trends, utilisation has been falling but productivity has fallen more in both service departments and bodyshops. The fall in productivity could be because standard times are tighter now, but as cars change it is difficult to assess. What we probably can say is that, in general, workshops haven't focused on the potential benefits of investment in technology and specialisation but continued to operate along traditional lines.

This is not the place for a rundown on workshop equipment, but one example we came across recently was Robodry, which can massively reduce the time required to paint a car. And there are plenty of other technological solutions available for service workshops and bodyshops. As well as technology, it seems that sales departments have benefitted from specialisation and it is equally possible for workshops to employ a similar approach even if it means breaking with traditional practices.

Put simply, there has never been a better time to change things for the better, and workshop efficiency is a good place to start.

Written by Trend Tracker director Chris Oakham, this piece first appeared his column in the subscription monthly Auto Retail Bulletin in April 2010. (See www.auto-retail.com for subscription details.)

Chris Oakham

Trend Tracker Limited

0870 421 4350

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