As gross profits from the actual business of selling cars fall from pandemic-era highs, dealerships are trying to convince customers to return for every single oil change to help secure their bottom line.
Gone are the days of a constricted car supply and weak competition that saw dealerships rake in sky-high profits in the early 2020s. As profits fall back to Earth—partly because of compressed margins caused by the car supply moving closer to demand and competition between car sellers increasing—dealerships have had to emphasize other areas of the business to protect their profits.
For many dealerships, this means focusing on service. Despite their reputation for pricey repairs and questionable value, some operations are doubling down on the customer experience to compete with independent shops such as Jiffy Lube, Meineke, and even Walmart. The stakes are high, given 42% of Americans identified one of these chains as their “primary service provider” in 2025—up from 20% in 2020, according to a report by consulting firm Ducker Carlisle.
Tim Pohanka, executive vice president and chief operating officer of Pohanka Nissan Hyundai, a dealership group in Fredericksburg, Va., told Fortune the compressed margins involved with dealerships’ core business of selling cars have singled out service as “the biggest opportunity.”
