Franchised dealerships must reframe aftersales as a strategic driver of profitability rather than a basic operational function, according to new research from industry expert David Hart.

The paper, titled The Future of Aftersales Profitability in Franchised Dealerships, outlines how aftersales departments, traditionally seen as a support function, are now central to long-term financial performance as dealers face mounting cost pressures, shifting customer expectations and increasing competition from independents.

The research is based on six months of study, drawing on meta-analysis of global automotive markets and interviews with 17 senior professionals from across the UK sector. It identifies a number of converging challenges—digital transformation, electrification, labour shortages and customer behaviour changes—that are forcing dealerships to rethink how they structure, price and deliver aftersales services.

“Aftersales has long been the backbone of franchised dealerships,” said Hart. “If you’re doing it right, it can often cover operational costs while new car sales contribute additional margin. Yet, many still treat it as an operational necessity rather than a strategic profit centre.”

The study highlights how high staff turnover, especially among service advisors, is hampering operational efficiency and customer satisfaction. Dealerships are also grappling with legacy systems—often more than six platforms in one department—and a lack of structured customer data, limiting their ability to implement proactive and personalised service strategies.

EV adoption is compounding the pressure, with reduced service revenue and growing competition from independents and fast-fit chains entering the electric vehicle repair space. Dealers, the report argues, risk becoming default providers of low-margin warranty work unless they take decisive action.

Among the paper’s recommendations are investments in AI-driven communication, predictive maintenance systems, and flexible service plans. It also stresses the importance of training programmes to upskill technicians and improve EV diagnostics capability.

“Customer retention, flexible pricing and workforce development are now inseparable from profitability,” said Hart. “With EVs requiring less routine maintenance, every service opportunity must be maximised.”

On operational metrics, the paper advises dealers to focus on recovery rate, workshop utilisation, real-time diagnostics, and upselling through structured Electronic Vehicle Health Checks (EVHCs). It also calls for better integration between CRM, booking systems and DMS platforms.

The report concludes with a warning: franchised dealers that fail to innovate risk losing market share to agile disruptors. Those that embrace change can turn aftersales into a high-margin, resilient revenue stream.

“Dealerships are at a crossroads,” Hart added. “You can either embrace innovation and strategic improvements – or risk falling behind.”