Supply disruptions happen when companies can't get the parts or materials they need to make their products, which can cause delays and financial problems.
Morelli is a company that provides parts to Nissan, and it recently went bankrupt, which could cause problems for Nissan in getting the parts they need.
The service drive is where you take your car to get it fixed or checked at a dealership. It's important because it helps keep customers coming back for car maintenance.
Retention is about keeping customers coming back to the same place for service. If a dealership has good retention, it means people like their service and return when they need repairs.
A warranty is like a promise from the car maker that they'll fix certain problems for free for a few years. After that, you might have to pay for repairs yourself.
Cost of service is how much money you have to pay when you take your car in for repairs or maintenance. It's been getting more expensive over the years, which can make people think about going somewhere else.
The age of vehicles is just how old cars are. Older cars usually need more repairs, which can cost more money when you take them in for service.
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To down the show, Nissan's largest US plant goes down due to an aluminum shortage. Same disruption could cost Ford $2 billion. And GM cuts hundreds of salary jobs amid its profit push. Plus, a look at why more customers are defecting to independent repair shops from dealerships.
One of the biggest things that a dealer can be doing is staying in front of the customer, not with like, here's all the payments on every special car we have in stock right now. But more so, here's what we can do for you in your ownership process. So keep in that message in front of the customers' key.
Let's run through all the news you need to know to keep up the auto industry. Nissan is pausing production at its biggest factory in the Americas.
The company says assembly lines in smear and Tennessee will be idled on October 24th and 27th because of parts shortages linked to last month's novellus aluminum plant fire in New York. It expects the move to cut output by about 2400 vehicles.
The plant builds several high volume models, including the Rogue, Pathfinder, Marano, and Infinity QX60. The disruption adds pressure on Nissan as it works to regain US market share.
Ford is also feeling the fallout from that aluminum plant fire. The automaker says the shortages will cut profit this year by up to $2 billion.
To offset the hit, Ford plans to add about 1000 jobs in Kentucky and Michigan by 2026 to boost F-series pickup output. Even so, profits rose to $2.4 billion in the third quarter on record revenue of more than $50 billion.
Ford says it has enough trucks and SUVs in stock to avoid a sales dip and expects the damaged novellus plant to be back online by early December.
And General Motors is cutting more than 200 jobs just days after raising its profit outlook for the year. The cuts affect salaried workers mostly at its tech center in Warren, Michigan.
Employees were told early Thursday that the cuts were due to business conditions not performance. GM says its streamlining operations to stay efficient as automakers face higher cost from tariffs and slower EV demand.
The company says it's also eliminating duplicate roles to help boost profitability. And those are today's headlines you can find more details on all those stories at auto news.com.
Here to talk more about Nissan's production shutdown in Smirna is our own Irvash Kakaria, who covers the automaker for us at Automotive News. Irvash, welcome back to Daily Drive.
Thank you, Kevin. Good to be back.
So is this a significant setback or could it become one?
So right now it's not a significant setback. It's two days of production that's about you know 2500 roughly 2500 vehicles that have been lost.
The question is do these parts shortages and does the aluminum shortage continue and does that then require Nissan to keep that that factory which is its largest in the Americas, not just in the US.
So 6.4 million square foot factory. So does it force Nissan to keep shutting down production beyond Monday. So it's shutting down today and on Monday the question is will this continue.
And it's an issue because it's not just a factory it's Nissan's largest factory but more importantly it builds.
Nissan's most important vehicles in the US. It builds these high volume, high margin crossovers, the the pathfinder, the marano, the infinity QX 60 and most importantly it builds the rogue and the rogue last year accounted for about a third of Nissan's US sales.
So every day this plant is down. It can get expensive for a company or for a brand that can really not afford any more headwinds.
Well along with the shutdown there are several high profile supply disruptions rocking the industry right now and some could end up touching Nissan. Is the company in a position to absorb more.
Like I said it's already in a pretty precarious position they've got they reported their largest annual loss last year since almost a quarter of a century.
So they've really got to hit their marks as they try to recover the business and not having these key products available for their dealers is definitely going to hurt them financially.
The question is you know obviously aluminum is the the big issue here because the novellas factory in New York New York state went down it affected Stellantis Ford and it's affecting Nissan.
The question is what other components are they in short supply off because according to this memo that was reviewed by automotive news.
There's some other vehicle components that are also in short supply and they specifically cited a Morelli Morelli is a huge Nissan supplier and it recently filed for bankruptcy.
So that's kind of interesting what this component is that may be coming from Morelli and and I've asked them you know I asked Nissan like does this have to do with chips with the next period issue in Europe and they rule that out.
So at least we know that's not the issue yet so you know I'll stay on it and we'll see what what we can find.
Well Irvash thank you so much for joining me.
Thank you.
Coming up vehicle lives Alex Snyder and Tom Harsha talk about how to make service visits less transactional and more personal.
That's next on daily drive.
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Welcome back to daily drive. I'm Kellan Walker. The average repair bill increased 85% from 2019 to 2024.
That's according to data from the automotive retail technology company vehicle life. The company's Alex Snyder and Tom Harsha say those steep cost drive many customers to leave their dealerships service department and search of a cheaper independent repair shop.
The two spoke with automotive news senior retail editor Dan shine about the frustrations of service customers and how dealerships can win back their loyalty.
Thanks so much for joining me on the fixed stops Friday edition of daily drive. We're happy to be here, Dan.
So I want to talk about loyalty and service departments dealership service departments and something you guys know a lot about.
What are you seeing? I guess I'll start with you Alex. What are you seeing when it comes to the service drive and loyalty with customers?
I know retention is a bear for dealerships. Three year warranty expires typically 70% of those customers go elsewhere for their repair needs.
How are you seeing things shaping up when it comes to loyalty in the service drive?
One of the things that we need to keep in mind is the consumer isn't staying up to date on all the market trends and everything that's going on in a dealership all the time.
So they get a glimmer of what's happening once a year if they're maybe twice a year if they're doing service on a regular basis.
And then the sales customers are obviously three to five years. So they can miss a lot in that time.
And what has happened since 2019 is we've seen a significant increase in costs across the board service specifically in 2019.
It was less than three hundred dollars every time you went in for service. Now it's over five hundred dollars.
And we're also seeing the age of vehicles go up. So these customers with over a hundred thousand miles on their car.
They might be seeing six and seven hundred dollar bills every time they come in.
So that is having an effect on loyalty. It is driving people to go to their independence because the costs are so high.
And that's the only place they can go to afford whatever their car needs.
Talk a little bit about the experience that a customer has when they go to the dealership when it comes to how they feel about that visit.
It's the waiting room, the long waits, whether it's trying to sell them extra services.
Kind of characterize what how they feel about this experience in the service drive.
Yeah, you know, one of the things that we see dealers and customers talk about a lot is honestly even just the connection between I need a service appointment
and actually being able to talk to someone with the dealership or the online schedule and experiences.
At least a little to be desired in a lot of cases dealers ask some specific questions on their even their scheduling apps the customers they don't know they don't understand.
And so I think just simplifying that a little bit making it easier for them to understand and interact with the dealership without significant hold times, for example, would be a big lift from what I hear from consumers.
And and from dealers at some levels do and my own experiences service in my vehicle and I encounter these same things with the dealership.
And I've actually had the opportunity to talk to a couple service managers at the dealerships right to my own personal service and and help them understand new technologies available to actually make it easier on the phones for the service driving for customers.
So it's pretty interesting.
Do you think AI time is part of the solution?
I think someone would say, well, it's, you know, not, but do you think AI can can make things improve things better for the customer?
So we have had a deep and inside look at what AI can do when it went very, very important here implemented correctly.
In other words, put the correct guard rails on the AI.
But when it's done correctly, it can have a profound impact on the not only the efficiency of the dealership, the service department.
But I would say the customer experience, the customer, they just want an accurate answer and they want it in a timely fashion.
And so if AI can do that and it's accurate, they're okay with that is what we're seeing over and over again with our own AI and our own products.
It has had a profound impact for our dealers not only optimizing the dealership's staffing needs, but they're getting the right answers and they're getting good answers and it's moving the customer down the funnel.
Whether that be service or sales or whatever. So I think, yeah, so the answer is absolutely yes. It's going to have a huge impact it already has.
But what dealers are learning right now is it really matters that you put the correct guard rails on the AI and that it has enough data on that customer to personalize the message.
So Alex, you mentioned independent repair facilities in a minute ago.
What is it about those shops that maybe makes it the more preferred to a customer than then a dealership service or what are they doing better?
So it could be like a two or threefold response here. There are some independence, especially like the ones that are more more like a franchise.
You see them nationally that they might have some of the same holdups and things that you might find in the dealership where you're having to interact with an online form that might not be super easy to get through and that kind of thing.
But it's the some of the mom and pop ones that are local to the customer.
They're a little more hands on with the customer. They also have labor rates that are significantly less.
You know, I've seen in my local market labor rates, the dealership that are approaching $300 an hour, but the labor rates of the independence are $120 an hour.
It makes a significant difference on the cost, obviously, but also the hands on component where the customer might be walked over to look at their car.
They're talking to the tech who's doing the work. There's just a little more, you know, personalization to the experience.
You're dealing with human, you know, really feel that way.
And, you know, for my own experience, too, it's, you know, the independent shop that I go to, I've a couple of cars, you know, one, I've got an old Jeep, my kids drive, it's over 200,000 miles. I've got a car that's other ones, you know, over 170,000.
I take it to an independent shop. And I know the guy, I know the owner, he's the one turned the wrenches. I call him up. I say, hey, this is what's going on.
And so there is, there is, like you're talking about, there is a little bit of a relationship there as opposed to the times I've been to the dealerships. And it's, you know, you don't know who your tech is. You don't know sometimes it's different advisor as well.
So I kind of, on that point, I'm, I think what you and Alex have discovered is some of the pain points is customers feel that they're a transaction.
The relationship is transactional and not relational. And that they, they don't feel valued. They're just maybe the kind of like a little commodity to dealerships kind of expounded on that. And what you guys have found.
Yeah, we, we talk a lot with dealers about when they, when they talk about loyalty, they talk about the next transaction with the consumer. And that's not what loyalty is loyalty is being there to answer their questions honestly with transparency.
And that you earn the right to transact to get with them, right? And that's kind of just a different way of thinking about your business.
But the other things that we're seeing here when it when you think about loyalty is, you know, for example, when it's a, it's a major job that needs to be done on an old car.
A customer who has been an independent may actually consider the dealership we got transmission or major engine component like you may need the diagnostic equipment that only a dealership has, for example.
So we're starting to see these older cars. There are some interesting opportunities emerging, but the dealer has to be ready for it.
Like you, you, you want to incent that customer like, hey, come on back. We'll give you, we'll give you a break, right?
To look at this vehicle, you know, that kind of stuff. We're starting to see dealers just really starting to open up to this.
These some of these concepts and ideas. And now the question is, how do, how do you get to that customer? How do you let them know that you'll be easy to work with again?
Come on back basically messaging. And you have an intelligent enough systems to to accurately guess at that stuff, right?
It's like, understand where that customer is actually adding this order of vehicle and how to message them.
You know, there's a lot of those kind of things. I think dealers are really just starting to wake up to and realize oh, wow, there's an, there's an emerging opportunity starting to happen here if we could get this right.
Yeah, for sure. Now, finally, Alex, okay, I'm a dealer. I realize I've got a loyalty issue. And I think for most dealers has not a surprise for them.
What's the first step? What's the second step? How do I go about trying to repair this kind of feeling that customer has had one, you know, about my dealership?
Well, before I answer that one, I do want to say that I think some dealers have woken up to this. We are seeing a trend in loyalty coming back a bit.
So this year to date for service in particular, 67% was the loyalty rate for 2025 for service.
And 73% was the rate in September. So there was a nice little uptick. There was also a nice uptick on the sales side too.
And I think what's happening here is dealers are realizing that they've had some holes in their process.
Maybe some, some holes in their staffing and things like that. And they are adopting technologies such as AI and other things out there that are patching some of those holes and getting the customer a better experience reaching out to them more often and letting them know, hey, we're still here.
You know, that's one of the biggest things that a dealer can be doing is staying in front of the customer, not with like, here's all the payments on every special car we have in stock right now.
But more so, here's what we can do for you in your in your ownership process. And so keeping that message in front of the customers keep.
Gentlemen, enjoy the conversation very much. Good stuff. Well, I look forward to have you back again. Thanks for your time.
I'll see you Dan.
Alex Snyder is CEO of Vehicle Life and Tom Harsha is the company's COO. They spoke with our own Dan Shine.
That's Daily Drive for today. I'm Kellen Walker. Thanks to automotive news executive producer Jake Near as well as a
Ron Urbosh Kakaria and Michael Martinez for their reporting for today's podcast.
You can get the latest news on service and parts, supply chain problems, and everything happening in the auto industry at autonews.com.
Come back over the weekend for a weekend drive edition of the show with our own Hannah Lutz and Larry Velliquette.
About the biggest news from the past week including the multiple supply chain crises affecting automakers and suppliers.
Well, this chip crisis could definitely hurt the supply chain in the US and in Europe.
We'd love to hear from you. Let us know what you think of the show when the topics we cover today.
Send us an email at DailyDrive at autonews.com or leave us a voice mail at 313-444-2774.
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About this episode
Nissan's largest U.S. plant faces a temporary shutdown due to an aluminum shortage, impacting production of key models like the Rogue and Pathfinder. Ford anticipates a $2 billion profit hit from the same supply chain issues, while GM cuts over 200 jobs to streamline operations. The episode also explores the growing trend of customers turning to independent repair shops, driven by rising service costs and a desire for more personalized experiences. Experts discuss strategies for dealerships to enhance customer loyalty and improve service interactions.
