July 17, 2026 | Subaru’s Todd Lawrence and Jim Pernas talk service department challenges; Honda discontinues electric Prologue
Automotive News Daily Drive
July 17, 2026 | Subaru’s Todd Lawrence and Jim Pernas talk service department challenges; Honda discontinues electric PrologueAutomotive News Daily Drive · Jul 17, 2026
The Honda Prologue is an all-electric SUV made by Honda. It runs on a battery instead of gasoline. The podcast mentions Honda plans to stop selling it after a period, so it’s a car people may want to understand in terms of future availability.
The Volvo EX-60 is a new electric SUV Volvo is planning. It’s the kind of car people shop for when they want an EV that’s not too big—more like a mid-size crossover.
The Subaru Love Promise is Subaru’s program to keep customers coming back. It’s basically Subaru’s way of rewarding owners and encouraging them to use the dealership for service.
Customer loyalty just means people keep coming back to the same brand or dealership. In car terms, it’s when you return for service instead of going somewhere else.
Tire rotation means moving your tires to different spots on the car so they wear evenly. The EV part suggests EVs may need extra attention to tire wear patterns.
Term
major transmission
The transmission is what helps send power from the engine to the wheels. A “major transmission” repair means it’s a big, costly job compared with routine service.
Warranty expires means the free/covered repair period from the manufacturer is over. After that, repairs usually cost more, so some people switch to cheaper independent mechanics.
The supply chain is the whole process of getting car parts from factories to warehouses and then to dealerships. If it gets slowed down, shops can’t get parts in time to fix cars.
Parts shortages are when repair shops can’t get the replacement parts they need. That can delay repairs because the car can’t be fixed until the right part arrives.
Cars use computer chips for lots of functions. During the semiconductor crisis, there weren’t enough chips, so car production and parts availability got delayed.
Fixed operations is the dealership’s service business—repairing and maintaining cars and selling parts. If new-car sales drop, service usually becomes a bigger part of the dealership’s income.
Fixed operations absorption is a way to measure whether the dealership’s service department is doing enough business to cover its costs. If it’s “absorbing” costs well, the service side is financially working.
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Welcome to Daily Drive.
For Friday, July 17, 2026, I'm Kellan Walker in Las Vegas.
Today on the show, Honda will discontinue the electric prologue next year.
Foxconn, the Taiwanese iPhone maker expanding into electric vehicles, postponed its U.S.
release of a mid-size EV crossover due to tariffs.
And tough competition in China derailed Volvo sales in the first half of the year.
Plus, two Subaru execs talk about the challenges service departments are facing today.
We know people are holding their cars longer, no question about it.
Let's run through all the news you need to know to keep up in the auto industry.
Foxconn, a Taiwanese iPhone maker expanding into electric vehicles,
postponed its U.S. launch of a mid-size EV crossover due to tariffs.
It will pivot to producing vehicles in Poland and will pitch a new taxi for Japan
to continue its international growth strategy.
Foxconn planned to deliver its Model C mid-size utility vehicle to a U.S.
client it has not publicly identified.
If the political situation were to change, the company might reassess.
The move shows how automakers and suppliers are dialing back U.S.
production plans due to tariff volatility and reduced federal incentives.
Honda confirmed plans to axe the electric prologue next year,
marking the end of the company marketing an EV in the U.S.
The company canceled plans to build three upcoming EVs in the U.S. back in March.
Despite initial success, after the Trump administration eliminated the EV incentive,
sales of the prologue decreased significantly.
The company is expected to further prioritize gasoline-electric hybrids
as well as gasoline models.
It plans to launch 15 new hybrids by March 2030,
primarily in North America, with the first hybrids due next year.
And Volvo sales in the first half of the year were derailed due to tougher than expected
Chinese competition.
Sales fell by 35% in China, a sharper decline than expected.
Despite the setbacks in growth, a Volvo executive said the company is expecting
to rebuild its cash position and increase sales with new products such as the EX-60
mid-size electric SUV.
Additionally, two new electrified models will be announced in September.
Volvo cars CFO Frederick Hansen said that the second half of the year will be led by Europe,
while the Chinese and U.S. markets will continue to be a struggle.
And those are today's headlines.
You can find more details on all those stories at AutoNews.com.
Affordability concerns are a new challenge for service departments.
Subaru is leaning on customer loyalty and the Subaru Love Promise to keep customers coming back.
Todd Lawrence is Vice President of Loyalty and Aftersales at Subaru,
and Jim Purness is Vice President of Fixed Operations.
They sat down with our own Dan Shine.
Here's the first part of that conversation.
Jim and Todd, thanks so much for joining me on the Fixed Ops Friday edition of Daily Drive.
Good morning, Dan.
Thanks, Dan.
So let's talk generally about dealership service departments and how things are there.
What are what do you see as we sit here in June of 2026?
Jim, I'll start with you.
What are the challenges that Subaru service departments are faking these days?
Well, we know people are holding their cars longer.
No question about it.
And you've got to earn loyalty.
A lot of the basics haven't changed.
You've got to earn the loyalty.
You've got to earn the business and value every customer.
The fundamentals haven't changed.
But it's challenging in some ways.
People, the affordability, people are cautious about spending big ticket items.
And actually that can and is helping us.
And Todd, from your perspective, what are you hearing from your service directors,
your Fixed Ops directors about things that they're struggling with?
You know, I think one big struggle right now is just the economy in general, affordability.
But we're getting our customers.
They're coming in.
Some may be turning down some of the bigger repair items.
But the business is definitely out there, which is a good thing.
Like Jim said, it's just maybe we have to go after it a little harder.
But we have the units and operation out there.
And our customers are loyal to the brand.
We want to keep them loyal.
So we're doing what we can to make sure they're coming back and staying at their Subaru retailer.
Jim, I think of all the brands out there, Subaru seems to be the one that, again,
the word loyalty is thrown around a lot.
It seems to me at least like that top brand that there's a service customer loyalty there.
How has Subaru built that over the years?
Well, we're a relationship car company.
And we believe in trust.
And it's really our retailers that have worked to generate that.
We call it the heart pillars, the love promise.
Being more than a car company and staying loyal to our brand.
I call that playing the long game.
Keeping customers coming back.
No business is too small for our retailer, whether it's an EV tire rotation,
and no business is too big, whether it's a major transmission or repair.
But developing that trust and being a good citizen in the community
certainly helps us get the job done.
And from your perspective, I think dealerships struggle with customer retention.
That's the warranty expires.
A lot of people go to an independent shop.
They think it's cheaper than the service department.
How do you continue to emphasize to Subaru customers that that's where they should be?
You know, I think we definitely do things in a uniquely Subaru way.
We call it the Subaru Love Promise.
It's not just a marketing tagline.
It's all about taking care of our customers.
It starts here at our corporate office.
We do a great job with our employees.
We want that to trickle down to our retailers.
So just at every interaction with Subaru, we want them to feel the love.
And we know that if our customers do the right thing,
take care of our customers, they'll come back.
They won't even think about the aftermarket.
So Jim, so you're retiring coming up soon here.
How soon?
Actually, are you leaving?
All right, next month I'm retiring.
Okay, all right.
And almost a 40-year career there at Subaru kind of walked me through
a little bit of that arc from when you started to where we are now
and how we talked a little bit about that loyalty and the customer retention
that Subaru is really well known for.
How did that kind of that arc of that build over itself over the years?
Kind of take me through that journey and how you kind of saw
Subaru really kind of building that brand recognition.
Sure, I started in 1987, summer of 87.
And we had loyal following, loyal customers.
We had plenty of challenges in the market.
We built front-wheel drive and all-wheel drive at the same time.
And we were trying to find our footing.
We were getting away from the old brand identity of inexpensive and built to stay that way
in the early 80s to the value proposition.
And we struggled and had some tough years, some lean years,
and looking for our identity.
And then we came out of it in the 90s with the outback,
responding to what our customers need and what they wanted and their lifestyle,
their need for adventure and outdoor type of living.
And so, and we built the product.
The product certainly improved dramatically and met the customer,
the owner, where they want to be.
And we worked with our retailers to develop their brand strategy as well.
And fast forward, the love promise, the love, share the love came out.
And that was a natural extension of how our customers feel about the brand.
And we, I think, have done a good job of showcasing that and making us more than a car company.
And that there's more than buying the sheet metal of the car or the parts and service.
It's the emotional bond.
It's the trust that we create with our owners and that we're there for them.
And then the safety that we provide and all of that has really come together
in the last several years.
And we're riding on that success for certain.
How do you build that culture from top down and make sure that it permeates
into every store that you have there?
Well, it's taken a lot of years.
And I've been around 39 of them, but developing the product.
And I think a lot of it does start with the product and then the marketing.
And then the field team, the Super America field team meeting with the retailers.
And you have to be authentic.
You have to be authentic.
And the love promise is a community commitment.
It's a customer commitment.
You have to be true to that.
And when you're true to that, it spreads and you talk about it.
You talk about the successes and the stories.
We call them love promise stories in the community and what we do to give back.
And then as time goes by, it develops, it multiplies over the years.
And it becomes the culture, the reason for being.
It's the purpose for our brand in a lot of ways.
And you spend 16 or so years kind of on the ground, I guess you would say,
in those different kind of field roles for Subaru.
And I'm sure that really informed you on, you're in the dealerships there and you
really can hear firsthand the problems or what they need and what they're doing well.
How did you, when you moved up into this VP role, how were you able to kind of keep that
connection with at the store level to kind of make sure that you're still hearing
what again, those fixed ops and service directors need from you?
It gets harder as you come, you know, most of my career was in the field.
And so I was constantly every single day in retailers and working with them every single
day and then coming to the corporate office in 2019 and moving into this role in after sales,
you have to seek out those opportunities and continue those connections and listen to your
retailers, their partners, they're so significant to what we do and to that brand strategy and
parts and service and loyalty, we call it the loyalty loop, keeping that owner coming back
for life. So you listen, you seek out those opportunities, we partner with the NRAB,
that's our National Retailer Advisory Board, and get to know them really well, travel to the
stores as much as we can in roles like this and listen respond
certainly in a partnership fashion.
You became Vice President in 21, a very tumultuous time in the auto industry coming,
kind of coming out of the pandemic slowly and supply issues, parts issues, supply chain stuff.
What was that like to kind of like jump into that fire a little bit?
I had no idea. I mean, it was baptism by fire, supply chain problems, getting vessels from Asia
over here was a challenge. There were parts shortages, galore, and we again, we listened,
we responded, we control the controllables. I remember saying that many times, control what
we can control. There's some things we couldn't control, if there were raw materials we couldn't
get, but we did everything we possibly could to develop countermeasures, to get the product,
get the supply chain. In the supply chain, mass production for vehicles always comes first,
and certainly we understand that in fixed operations and after sales, but then we need to
find the source, find the right suppliers and keep good eye on stocking levels and have good
systems in place so you can navigate the supply chain. We're not out of the woods. There certainly
are plenty of challenges now in the supply chain, not nearly as bad as 21 and 22 and the semiconductor
crisis and all of that. Don't get me wrong, but there are challenges. You have to stay nimble
and you have to read the data and you have to utilize the systems that you have to attract the
parts and see the trends and respond as quickly as possible so that we can keep parts on the shelves
for our customers. Definitely, service became during the pandemic in those years right after it.
Service became a big focus because sometimes sales were shut down during the pandemic and
service might have remained open as an essential service. We're kind of in a vehicle inventory
where maybe the sales are going to be down a little bit, margins are compressed. Again,
fixed ops is kind of turned to, looked to to carry a dealership. How have you over the years
kind of made sure that the back end of the business, as it's sometimes called, the back
end of the dealership was kind of still front and center in the minds of leadership at Subaru
that this is an important part of the business as well and needs to be treated as such?
Yeah, great question. Fixed operations absorption is a critical measure that our
field team uses retention as well and lost and prospect customers. It comes down to individual
one-on-one conversations in the field and making sure our field team has the tools when they're
working one-on-one with their retailer to show the opportunity. You're getting X percentage of
the units in operation and if you do this, this, and this, we can move that needle up.
It starts with that first maintenance complete. It starts with a great Love Encore
redelivery that gets the customer back and then they come for the first maintenance and then you
do a great job there and you bring them back for the next one and the one after that. But
using the data in a manageable way and planning for capacity, so there's many, many variables and
I'm answering the question in a lot of different ways, but it really comes down to the field team
and that one-on-one relationship they have with the retailers to develop the business plan and to
make sure that fixed operations is a key part of that business plan because you do well in Subaru
fixed ops. You're going to do well in new car sales and variable operations, use car sales,
no question about it. So, I'm talking a little bit about the transition with Todd and kind of
passing the torch to him. I'm curious, Todd, from how long have you, I mean obviously you know Jim
for a while, but how have you long have you kind of this transition been going on and kind of
walked me through, I wasn't sure when like Jim's retirement was announced and you were named as
his successor and I guess how that transition has been working over the last few months.
Sure, Jim and I started working together in this role in early March, so I've been fortunate to
have him around. He's certainly set up Subaru, set the department up for success. We have so many
great things in place, so many great things coming, so over the past few months I've just been
tagging along with Jim, hopefully getting in his mind a little bit. I've been here 29 years,
so I'm just a short timer compared to him, so I've learned a lot from him and we're in a
great position to move forward. Our retailers are in a great position. We have a lot of things
coming and with new car sales maybe trickling down a bit, industry-wide, this side of the
business is more important than ever and we're well positioned to jump in and keep our owners
coming back and grab our lost customers. That's Daily Drive for today. I'm Kellan Walker.
Thanks to Francis Clem as well as our own Urbash Kakaria, Hans Grimel and Peter Siegel for their
reporting for today's podcast. You can get the latest news on Volvo, Honda and everything
happening in the auto industry at AutoNews.com. Come back tomorrow for our weekend drive edition
of the show where our own Larry Belliquette and Michael Martinez break down the biggest stories
of the week. This is a serious situation for a union that has just been plagued by scandal.
About this episode
Honda plans to discontinue the electric Prologue next year, and the hosts also note how tariffs have delayed Foxconn’s U.S. EV plans. The conversation then shifts to Subaru, where Todd Lawrence and Jim Pernas dig into why service departments are under pressure as customers keep cars longer and become more cautious about big-ticket repairs. Subaru leans on the Subaru Love Promise, a “loyalty loop,” and fixed-operations follow-up—especially when parts shortages and supply-chain priorities complicate service.
Subaru’s Todd Lawrence and Jim Pernas talk service department challenges. Honda will discontinue the electric Prologue next year. Foxconn postpones the U.S. release of a midsize EV crossover due to tariffs. Plus, tough competition in China derailed Volvo’s sales in the first half of the year.
