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Are Your Fixed Ops Gains Just a Market Anomaly? National Data Says Otherwise.

June 13, 2025 by Bill Jackson

It’s a question many auto dealer groups are asking: Have our gains in fixed operations (service and parts) since 2019 been a result of unusual market conditions, or is the team genuinely knocking it out of the park? While your service department’s stellar performance is undoubtedly a key factor, national data strongly suggests that these increases are part of a broader, industry-wide trend, characterized by a “quiet comeback” built on smarter strategies, not just more repair orders.

Let’s dive into what the numbers tell us:

The National Fixed Ops Boom: More Revenue, Even if Not Always More Visits

Since 2019, fixed operations across the U.S. have seen substantial growth. Total dealership service and parts sales, for instance, are projected to reach over $156 billion in 2024. This represents a significant jump from $120.73 billion in 2019, and even more remarkably, an increase from $111.22 billion in 2020. This growth highlights the increasing importance of fixed ops to the overall profitability of new-car dealerships. In fact, the share of total dealership sales dollars derived from service and parts increased from 12.4% in 2023 to 13.2% in 2024.

Recent data from Cox Automotive/Xtime further confirms this trend:

  • Revenue in auto service was up 3% in April 2025 compared to March, and a significant 9% year-over-year, remaining “historically elevated”.
  • However, Repair Volume was down 1% in April compared to March, and flat year-over-year, indicating a “negligible change” in the sheer number of vehicles coming in for service.

Why More Dollars Per Visit?

This phenomenon of increasing revenue despite flat or even declining visit volume is a key insight. It’s happening for several reasons:

  • Rising Costs: Labor and parts costs are up, directly contributing to a higher average revenue per repair order (ARO).
  • Increased Repair Complexity: Modern vehicles often require more complex and thus more expensive repairs.
  • Bundling Behavior: Post-COVID consumer behavior suggests customers might be bundling more service work into fewer visits, leading to a higher ticket value for each visit.

Dealer Sentiment: Cautious Optimism on the Long Game

Looking ahead, dealers are expressing cautious optimism about fixed ops. Cox Automotive’s Q2 2025 Dealer Sentiment Index shows fixed ops optimism ticked up to 65 in Q2, up 3 points from Q1. Year-over-year, it’s up 4 points, indicating improvement, but it’s still below the 2021 high of 74. This “slow and steady growth” in future sentiment suggests a pragmatic approach rather than a surge.

Skyler Chadwick, Director of Product Consulting with Cox, notes that dealers are now “having to try harder to ensure business stays robust,” identifying and fixing process issues to “take full advantage of their available hours and open lift time”.

Best Practices: Rethinking Fixed Ops for Retention

In this evolving market, some dealerships are throwing out the old rulebook. Tully Williams, Fixed Ops Director at The Niello Company, for instance, prioritizes getting 70% of customers to return for service within 14 months, even if it means running “intentionally unprofitable” short-term offers. His tactics include:

  • “Buy three, get one free” tire promos to bring customers in for inspections and build long-term trust.
  • Completing 70-80% of brake jobs same-day when flagged during inspection.
  • Replacing batteries instead of just jump-starting them to build credibility.
  • Tying pay plans to forecasted hours, focusing the team on retention over sheer volume.

These strategies have led to shops running at 140–145% capacity and $182/hour gross profit.

The Bottom Line for Dealers

The takeaway is clear: your auto group’s impressive gains in fixed operations are likely a powerful combination of your team’s hard work and the prevailing market dynamics. While the market created a fertile ground for service growth, it still takes a skilled and efficient service department, often willing to innovate and focus on customer retention, to capitalize on those opportunities.

For auto dealers, this national trend underscores the enduring value and increasing importance of a robust fixed operations department. Investing in your service infrastructure, technicians, digital marketing strategy, and customer experience is not just about weathering market shifts; it’s about leveraging a fundamental and growing profit center in the automotive industry.

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