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By Keith Naughton Dec. 10 (Bloomberg) -- Ford Motor Co. is forecasting record annual sales from its auto service centers as owners keep their vehicles longer in the weak U.S. economy, providing a revenue boost for the company's dealers.
The Quick Lane Tire and Auto Centers, which are run by dealers and offer basic services such as oil changes, expect sales to rise to $450 million this year from $395 million in 2008, Tom Suttles, manager of the business, said in an interview. The chain may open 100 stores this year, its second- biggest annual increase, to a total of 575, he said. The service centers provide an additional source of revenue to the Dearborn, Michigan-based company and its retailers at a time when U.S. vehicle sales are declining. Ford sold 19 percent fewer cars and light trucks this year through November from the same period of 2008. "This is very good for dealers," said Jon Osborn, an auto retail analyst at researcher J.D. Power & Associates in Westlake Village, California. "They make almost all of their money on service operations. That's how many dealers stay afloat in these tough times." The retailers make money on labor charges for the services, while Ford gets revenue from parts. "People are keeping their cars longer and they're starting to recognize that there is required maintenance they have to have done," Suttles said. The poor economy "does benefit us." Sales rose 4.1 percent through October at Quick Lane stores open at least a year, including gains of 7 percent from tires and 13 percent from batteries, he said. A quarter of service customers drive models from Ford's competitors, Suttles said. The median age rose to a record 9.4 years this year for cars from 9.2 in 2007, and to 7.5 years from 7.1 for light trucks, Southfield, Michigan-based data provider R.L. Polk & Co. said in March. Ford expects to expand to more than 600 Quick Lane stores in 2010's first half, Suttles said. That would represent about 16 percent of the company's 3,671 U.S. dealers. |
