Fixed Ops on the Rise, But Dealers Say ‘Raise the Bar’Fixed Ops on the Rise, But Dealers Say ‘Raise the Bar’

Everybody in business, especially in dealership fixed operations, knows the reward for clearing a high bar is – a higher bar.

For dealers, fixed operations is successfully helping offset the decline in new-vehicle gross profits. But executives for the six publicly traded, new-car auto retail chains say they require even better performance from fixed operations to keep their dealerships thriving.

The six companies report a total of $4.2 billion in fixed operations revenue as a group in the fourth quarter of 2024, up 6% vs. fourth-quarter 2023. That’s on a same-store basis.

For all of 2024, fixed ops revenue for the group was $16.4 billion, up 3.6% vs. a year ago, according to company reports.

For the fourth quarter, Sonic Automotive, Charlotte, NC, had the greatest percent increase in its franchised fixed ops segment, rising 10.1% vs. a year ago. Lithia Motors, Medford, OR, had the smallest increase for Q4, up 3.4%.

Good Going – Now, Improve

Despite the rising numbers, fixed ops needs to “find another gear” and do even better, says Bryan DeBoer, Lithia president and CEO. He’s speaking specifically about Lithia, but executives with other public chains cite similar reasoning.

Finding “another gear” amounts to a new mindset, DeBoer says – to believe fixed ops can churn out even more repair orders, more shifts, more hours and more revenue from the same service bays and the same brick and mortar.

“It’s more of a mindset issue from the service advisers in the organization and management. They believe that there are only so many hours there. And they can find the efficiency,” he says.

It Takes Money to Make Money

DeBoer acknowledges upper management is responsible for persuading regional management, parts and service managers, service writers and technicians to believe the new mindset is credible and higher results are achievable.

On the more practical side, it’s also on Lithia to make the investments, recruit and retain more technicians, efficiently manage service appointments and workflow and make sure managers actually implement and track new offers, like home delivery of routine service, he says.

“What is my percentage of vehicles that are Driveway Repair, meaning I’m repairing a car in someone’s driveway? Or it’s Driveway Pickup, meaning, I’m picking up the car from someone’s driveway, and I’m taking it back to the store and fixing it? If they’re not involved with those things, they’re not involved with automotive service retail today” because those services are no longer optional, DeBoer says.

Right Attitude

All the public companies say they’re working hard to recruit and retain more service technicians.

Sonic Automotive says it had a net increase of 335 technicians in 2024, exceeding a target of 300 for the year. Sonic CFO Heath Byrd says the additional technicians represent an additional $100 million in annualized fixed ops gross profit once they are all “fully mature and in place.”

In 2024, Group 1 reports an increase of around 300 technicians, or 7%, in the U.S. market and expects to hire a similar number in 2025.

Lithia’s DeBoer says that as necessary as adding technicians is, they also need the right attitude. “It’s not a tech issue, okay?” he says. “It’s more of a mindset issue.”