Within the class of “this can be huge information…..or not” comes a report from Teslarati a couple of remark made by Normal Motors president Mark Reuss on the firm’s Investor Day 2022 on November 17. He mentioned that GM service departments have now repaired greater than 11,000 Teslas. “That’s a rising enterprise for us. I gotta say it’s a brand new enterprise,” Reuss mentioned.
That’s it. That’s the information. However what to make of it? That’s the place issues get difficult. Reuss identified that 90% of Individuals stay inside 10 miles of a GM dealership. A lot of these shops have technicians who’ve been educated to service the Chevy Volt PHEV and the Chevy Bolt BEV, so it’s not like they’ve by no means seen an electrical automobile earlier than.
Tesla, after all, has its personal service facilities, however many are a whole lot of miles away, getting appointments is usually troublesome, and there are complaints about excessive costs for repairs. Tesla additionally has cell restore technicians who will come to clients to make minor repairs. General, service would be the weak hyperlink within the Tesla expertise, and whereas Elon Musk says he’s personally devoting time to enhancing the service expertise, one has to marvel simply how a lot time he is ready to dedicate to this situation because the Twitter debacle explodes round him.
There’s a positive irony right here as effectively. It’s well-known that income from service is the lifeblood of many dealerships. They don’t make their cash promoting automobiles. They make their cash servicing automobiles, arranging financing, and promoting equipment like prolonged warranties, alarms, paint sealant, locking lug nuts, and ground mats. It’s much like the Kodak enterprise mannequin of virtually giving cameras away so they might develop all of the images individuals took with them.
A part of the Tesla tradition is a deep seated distaste for sellers. The sensation is mutual. Tesla remains to be banned from promoting its automobiles immediately on-line in a number of states, because of vendor franchise legal guidelines. Normal Motors has aggressively defended these legal guidelines in an try to decelerate Tesla and its disruption of the car enterprise mannequin that has been half and parcel of American tradition for generations.
There’s one other facet to this as effectively. Service clients get to wander across the showroom and stroll the used automobile line. It’s not unusual for somebody to drive in for service and drive out in a unique automobile. A number of the most skilled (and profitable) gross sales individuals cater to service clients. When somebody presents you an opportunity to get out of your 3-year-old automobile and right into a model new journey for little or no more cash per thirty days, the attract of make the swap is robust.
Normal Motors is about to step up its electrical automobile recreation. May it have an curiosity in having a Tesla proprietor browse its EV choices whereas ready for his or her automobile to be serviced? Oh, you betcha!
The Takeaway
The subtext right here is that Tesla has been very a lot in Silicon Valley “run round and break issues” mode because it started. A number of Tesla homeowners get satisfaction from figuring out they’re sticking it to conventional sellers. Mark Reuss and his colleagues in Detroit would by no means admit it, however there’s numerous dangerous feeling about automobile sellers on the market, which is why many discuss with them derisively as “stealerships.”
Whereas Elon Musk is busy constructing new factories and ramping up manufacturing towards 10 million new automobiles a 12 months (or extra), is there a risk that Tesla is getting forward of itself on the service entrance? If that’s the case, Normal Motors sellers — and others as effectively — may discover a profitable new area of interest servicing Teslas for individuals who want to do enterprise domestically. Would that be all people? No, after all not. However individuals like decisions and proper now, in the event you personal a Tesla, you have got only a few of them once you want service.
It is a entire new alternative opening up for sellers in all places. There’s additionally a big community of franchise auto restore corporations like Pep Boys and Midas which may push into this area. Statistics present the overwhelming majority of recent automobile patrons select to do enterprise with a vendor who’s near the place they stay and work. One wonders whether or not the good and highly effective Musk absolutely appreciates that dynamic.
Jalopnik says, “It is a huge deal for GM in addition to Tesla clients. Not solely does it give GM an opportunity to look inside on the intervals of a rival automaker’s product and be taught from that, it additionally provides Tesla clients simpler entry to service that’s generally exhausting to search out.” Amen to that.
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