Tony Molla | Maximizing Fixed Ops to Future-Proof Your Dealership
Three Key Insights with Sanjiv Yajnik
Tony Molla | Maximizing Fixed Ops to Future-Proof Your Dealership
Three Key Insights with Sanjiv Yajnik · Jun 26, 2026
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Term
pre-owned vehicles
“Pre-owned vehicles” just means used cars. If a dealership sells used cars from different brands, the service team has to be able to fix more kinds of cars, not just one brand.
Term
diagnose a very complex computer-controlled system
Cars today have lots of computers that control different parts. “Diagnosing” means figuring out what’s wrong by reading those computer codes and checking the related sensors and modules.
Term
certified
“Certified” means the technician has been trained and can show they know what they’re doing. The speaker is saying that having proof of qualification helps protect the business.
Term
CTE program
CTE stands for Career and Technical Education, which is school-based training focused on practical job skills. In this context, the speaker is recommending partnerships with local CTE programs to build a pipeline of technicians before they enter the dealership workforce.
Concept
internship or an apprenticeship program
These are training paths where someone learns while working with experienced people. The point is to build technician skills before they’re fully on their own.
LIVE
on this episode of Three Key Insights.
The opportunity that I found when I got into the industry is often not appreciated,
and I think that's part of the problem for us attracting individuals.
The auto industry is moving fast, and it's getting more complex.
Success Today takes more than instinct, it takes insight.
Welcome to Three Key Insights with Sanjeev Yashnik, president of Capital One Auto.
Today, Sanjeev welcomes Tony Mala, a leading technician advocate and automotive education expert.
As a driving force behind national training standards at the ASC Education Foundation,
he brings a powerful perspective to a crucial conversation about solving the talent shortage
and maximizing fixed ops revenue.
Now, in my previous podcast, we've talked to industry veterans who have said that
given where the auto industry is going, where car buying and car selling is going,
an incredibly important part of a dealership business is on the servicing end of it,
on the service base, on what happens after the sale.
And that really creates a really great foundation to keep the business steady
as you go through the ups and downs of the selling cycle.
One of the big issues that we face today is that that particular area of the dealership
is under pressure from a talent perspective.
But before we dive into that, Tony, welcome.
And can you tell us a little bit about yourself and how you got into the position you're in
and what drives you on this really, really important topic?
So I've been an advocate for the technicians my entire career.
I mean, I was one, I turned wrenches.
And my experience working with children not only expanded my technical knowledge,
but it showed me the importance of what information was going to be in the future coming.
And that's what we're dealing with right now.
This is just as computers were coming along in a big way.
And it's a very different prospect to become an automotive technician
than it was when I was doing it.
Requires much more training, much more enthusiasm for the career.
And they are in short supply, as you said.
So I'm spending my, I always enjoyed working with the schools.
I worked with schools in when I was in Virginia.
But I'm pleased to be able to continue that work.
And while my own personal crusade to find the technicians we need for the future.
So Tony, I'd love to dive a little further into the issues that we are facing
and how you're solving it.
But if we take a step back and just look at the auto industry and look at the dealerships,
how important is it that a dealership should have a really strong service department
from your perspective and has it become less or more important over time?
Well, when I was running the business, running the service department for Fiat,
I quickly learned that the sales department sold the first car,
the service department sold all the others.
But you know, the more and more dealerships are depending on the back end
to carry the carry the load for all the fixed ops expenses.
And to do that, you have to have qualified people working in your service department.
I know the dealership I go to, they have openings.
They have that openings for as long as I've owned the vehicle
and I've owned the vehicle for three and a half years now.
And it's very, very difficult to find the level of expertise that you need coming out
of some of the high school programs, which are a little uneven in their preparation.
One of the things that I'm doing with the Education Foundation
is helping programs become accredited to a national standard.
And these days with technology advancing the way that it is,
it's important that when you hire an entry-level technician that you know
they are trained up to a certain level where you can take it beyond that.
So, but customer services can, you know, again, you really have to pay attention to the consumer.
And 50% of the folks that are bringing their cars in are female.
And it's very important to keep that in the equation too.
We're seeing more and more women becoming automotive technicians.
And I know I found out when I was on the service desk,
they make great service writers and still do so.
So let's just start with the service department.
And you said, you know, a dealership sells the first car
and then the service department sells all the rest.
From your perspective, from everything that you've seen,
you've been in the industry a long time, you've seen many dealerships, you've seen groups.
In general, do dealerships know or appreciate the value
of the service department and is enough attention paid to the service department
from your perspective?
And I want you to answer the question from, say, 20 years ago and then today.
Just compare the two.
20 years ago, my experience was the service department was a necessary evil
to most dealer principles.
We tended to ignore the technicians back then.
They were just, you know, kind of background noise in the life of the dealership.
But today's entry-level people and experienced technicians are looking
as much for the dealership to invest in them and their success
as the dealership wants them to invest in the dealership success.
So an important component, I think, that exists today that didn't exist as well
as it should have back then is training.
Having the capacity of taking an individual out of school with a certain level of skills
and then sending them to ongoing training to build those skills over the years
and build their value to the dealership is crucial to success.
So again, I'm just sticking with, before we get to the actual technicians and what is required,
if I'm reading you correctly, you're basically saying 20 years ago,
it was kind of viewed as a necessary evil.
So I would think the extrapolation of that is that the dealer principles,
they really focused on the front end of the business,
much more than the back end of the business.
But what I'm also drawing out from what you're saying
is that today, the service end of the business is a much more strategic
part of a dealership versus being there just for the sake of convenience for the customer,
servicing the vehicle and so on.
That is correct.
As I mentioned earlier, the dealerships, most of the ones that I know,
are relying more and more on the service department to basically cover all of their fixed costs.
And what do you see happening in the service department
that is going to be that impactful to the dealership?
Is it the servicing the cars?
Is it that they help customers find new cars?
How do you see the service department adding to the safety security,
the success of a dealership today?
Well, the service experience is a chance to build trust and reliability,
if you will, as a consumer.
But I think it's also important to understand that the individual who is buying a vehicle from you,
again, and brings it back to the dealership to have it serviced,
they're going to base a lot of decisions on future purchases based on that experience.
The experience they have when they're having their vehicle serviced,
again, builds trust, it builds confidence in the dealership.
And it builds a relationship, which we've always talked about,
that all businesses are basically relationship businesses.
That is, I think, more true in the automotive industry.
So it's a really strategic part of the dealership,
and it is required for the dealership to do well, and it's not a nice to have,
it's not a necessary evil.
It is actually the service area of a dealership, from your perspective,
is a core part of the economics of a dealership.
It covers some of the fixed costs, that's where the customer makes a lot of choices
about whether they're going to come back to the dealership to buy a car and so on.
So now you've been talking a little bit about the talent and what is required.
Why is there suddenly a shortage of people who want to do that job?
Well, it's not so much a shortage of people who want to do the job.
As it is, the job has become a lot more complicated than it used to be.
Some at some point in the past, the educational system used what we used to call
shop class as basically a dumping ground for underachievers.
Nowadays, if you're a young person who's getting who wants to consider a career
in the automotive industry as a technician, you're going to be training pretty intensively.
We need the individuals with the same kind of time management and communication skills
and attention to detail that you would normally find for those who were college bound back in the
day. And in fact, a lot of the high school programs can only train, they only have enough
hours to train the individual up to a certain point. So it takes a lot more training. Sometimes
a lot of the folks at high school level will go on to enhance their skills, particularly in
diagnostics at the college level. And the real difference comes down to one word, technology.
Vehicles have become much more computerized. And having an individual with the technical
knowledge and knowing how to use the computerized testing equipment, etc., to make sure that those
systems are functioning, there's really roughly equivalent to what you would find in something
like a network engineer or a computer technician. And what you know today will probably be obsolete
in three to five years and you need to keep training. And again, that's a key element to that
strategic point that you mentioned about the service department. We keep improving our accounting
systems and everything else to keep up with technology. We have to do the same thing for the
folks that we expect to keep that technology functioning the way it should. Basically,
what you're saying is it's not a question of the supply, but the question of how that supply
is trained. Because one of the things I've heard you say in the past is that there's a huge swath
of technicians that are about to retire. And we really don't have a replacement
volume coming in. Am I reading that incorrectly? Because what I hear you saying right now is
there's a volume, but the quality of training is required. Is it both? Is it one? How do you see it?
Well, if you talk to someone in the industry, they'll tell you there's no shortage of warm
bodies. Okay. There's a shortage of qualified individuals. And that's the primary difference
that we're talking about here. 50% of the people that were working on cars and trucks
10 years ago were baby boomers, like myself. Okay. And we started retiring at a horrendous rate
15 years ago. And I don't know that we're the educational system right now. Again,
they need to invest more on that level on the trades as well, which is how we got into it.
And it is the shortage that we're in now. And this is not just the automotive. It's all of the trades
simply because we as a society became focused on you got to go to college, you got to get a
degree, etc. And that's true for a lot of people. But the trades people who earn more than an
individual with just a bachelor's degree were neglected. And I think that if there is a supply
problem, it's not just having the right individuals and having the right programs,
it's having enough of these training programs available to bring. We're training about 35 or
40,000 technicians a year now. We need twice that number. That really makes sense. So
basically, the training has to keep up. And you've got to be attracting people. How good are these
jobs? In other words, what is the earning capacity of some of these jobs?
That's a problem and an opportunity. If you look at the Bureau of Labor Statistics, the average salary
for a starting technician is somewhere around $40,000. That's not a lot of money these days.
But I know technicians and they do exist. There aren't a lot of them, but they do exist.
They're earning six figures. Now, how do we reconcile the difference in wage gap?
It's capability, basically. The more trained an individual is, if we invest in them,
keep them trained, give them the tools and equipment that they need, they will start making
more and more money. There's been a lot of conversation about the flat rate system these
days. Does it need to be revamped, that sort of thing? But the long and short of it is the
opportunity that I found when I got into the industry is often not appreciated. And I think
that's part of the problem for us attracting individuals. And therein lies the challenge.
We have to develop these individuals so that they have an opportunity to make the kind of
income that will be attractive to them to come into the industry. Most of the technicians,
I know, if they're not making $85,000, $90,000 a year, they're looking for another job.
Because it's not their fault that they're not making the money. It's having the work come
through the door. And this brings us back to, well, are you attracting customers? Do they trust
you already they're bringing their vehicles into you? It all kind of works together. It's one big
ecosystem. So if the service department is strategically important to dealerships,
there's a bunch of technicians who are going to be retiring soon. The people who you need to
bring into your organization need really good training, etc. What's your advice to dealerships?
What should they be doing to be able to really build an amazing service department?
Two words, get involved. Back in the day, when we were, we relied on word of mouth and we still do,
to some degree, to attract qualified people. That's fine when there's a lot of them out there.
There aren't anymore. But this is where what I'm doing is why what I'm doing is so important to
me personally. Because by being involved at the school level, through something called an advisory
committee, every CTE program that's accredited has an advisory committee. It's part of the
requirements. The members of the advisory committee are local businesses. And I stress the word local,
okay. You find a school CTE program, automotive, collision and truck exist, whatever level you're
at or whatever you need. Having, for example, a service consultant or a service manager involved
in an advisory committee gives them the opportunity to not only introduce their dealership to the
students as a possible employer, but it gives them a chance to evaluate which of those students
are the best and the brightest that they can attract into their business and invest in.
The people that are coming out of programs right now understand that they're highly trained.
They understand completely that they're in demand. And that young individual sitting in front of you
being interviewed is probably interviewing you as well. Because they want to know they're looking
for not just a job, they're looking for a career. But it's important to understand that if you're
going to attract the right individuals, they tend to listen to their peers. We definitely have to
make the parents understand that this isn't an opportunity for their children to grow and to
have a great life. But it's also important that you have not just your service manager in there,
but maybe the shop foreman or maybe one of your technicians involved. Having another young person
who graduated from a program, a high school program, working at a dealership and doing well
on an advisory committee for that school is the best advertisement you could have for the
worth of what you're offering as an employer. So the opportunities are out there, but they have
to be communicated properly. And the only way you can do that is to get involved. For too long,
we've relied on just stealing the best technicians from other businesses. That's a zero sum game.
At some point, if you stole it from somebody else, somebody else is going to steal them from you.
In many ways, we have to get back to now we're 20 years ago, okay, where we grew our own technicians.
That's the name of the game now. So Tony, when you talk about training, talk to me a little bit
about not the training program outside of a dealership, but inside of a dealership,
both attracting young folks to come in and start learning the trade, or even taking in someone
from a program that you described and bringing them into a dealership and training them up.
Can you break down the training if you owned a dealership today,
and you had one of these people come in? Let's say a person who is not at all trained,
and then let's talk about a person who comes in from one of your training programs.
What would you do? Just break it down from a what kind of skills would we be providing?
How would you be thinking about their careers, and a little more kind of hands-on
how you would develop this talent from your perspective?
Well, the first thing I'd do, as I had mentioned, would be to get involved with my local CTE program
to have that feedstock coming in, okay, individuals that have some training. As far as an internal
program goes, one of the things that the training programs at the high school and the post-secondary
level, college level, rely on are internships and apprenticeships. There's a lot more
internships and apprenticeships out there than there ever were before, so I would want to get
involved with one of those programs as well. In fact, NADA just launched one, so you might want
to look into that as well. One of the real benefits I think a dealership brings to the
equation is the factory training that's available. In fact, many of the car manufacturers have
programs like Ford's asset program and Honda PAC at the high school and college levels,
where they're preparing the individuals there to work on their vehicles, okay? Now, talk about
building loyalty. The training is available through the manufacturers, and that's great,
but there's these things called pre-owned vehicles that we have, where I'm in a Honda
dealership, but a Ford just came in, and it's a nice used car. You have to make sure that their
skills are broad enough based that they're going to be able to tackle whatever comes through the
door. Some individuals, all they want to do is change brakes and shocks, and they're perfectly
happy doing it. They're making enough money, so they're happy. Those people are going to be out
there, and they're going to be loyal, and they're going to be a good employee for you forever. However,
the ones that you need, the top notch technicians with the most training and the ability to really
diagnose a very complex computer-controlled system. They're gold, and you really have to
go the extra mile to make sure that you are keeping them at the top of their game. There's
an old saying, what happens if I train them and they leave? Well, what happens if you don't train
them and they stay? There's a certain liability involved with making sure that individuals are
qualified, certified, and can prove it. I think if I was building a program, three things I would
do, get involved with my local CTE program, get involved with them through an internship or an
apprenticeship program. Then once I have them on board, make sure that they understand that I put
them into a career development process that will make them understand that they're as valuable to
me as that job is to them. I think that is really, really good advice. Tony, I'm going to take a step
back and summarize for us the three insights I'm taking away from our discussion here. My first
takeaway, my first insight is that service departments way back in the past were sometimes
thought about as necessary evils, but even if they were important to the dealership,
it was mostly after the fact you had technicians that did not require much training,
they would come in to help customers service their cars, but now the game has changed and
has changed for a variety of reasons. This comes from this podcast, but also other podcasts
I've done with other guests. Customers are holding onto their cars for longer. There's an
affordability crisis. There's more need for servicing. One of the things that is incredibly
important is that the way the customers look at a dealership is going to be through the service
department. The way in which the service department handles them, looks after them, and looks after
the car and does all the work is going to be incredibly important to the repeat customers
that need to come to the store, plus the steady income that a dealer gets from the service department
is going to bite them through the ups and downs of the selling cycle. The service department has
become a very strong strategic part of a dealership that every dealership needs to pay attention to.
My second insight is for the service department to do well, you need amazing talent, which is obvious,
but there isn't much of that to go around right now for a variety of reasons.
Now it is from what you said, it's easy to find warm bodies, but our cars have become much more
complex, so they need way more training than they had previously, even to do simple things
like oil changes, etc. But there's many more complicated things that they need to do,
run diagnostics and so on and so forth, they need to get trained on that.
And then there's another piece of the training which has got to do with their EQ and their empathy
and their ways of dealing with customers. So there's a whole different skill set that is required,
which is a combination of the people who are sitting in the service department,
and then also the technicians who are actually working on the car. It's harder to find those
kind of people. And that's the gap that you want to get ahead of, because it is a strategic part
of your dealership. And then the third insight is to be able to get there, to be able to find the
right technicians, one needs to get involved. It is not good enough to steal them from someone else.
That's not going to be long term or successful kind of a strategy, but investing in this area
in a variety of ways, getting the dealerships on advisory committees,
so that they are watching the students, getting the internships and so on.
But once they hire the students and the incoming technicians, making sure that they don't just
let them go at that point, but continue to invest in them, talk to them about career advancement,
making them more and more skilled, so that both the technicians get a chance to earn more money
because you're just getting more business. But also that is the way in which you can make the
dealership do way better than it would otherwise do. So the net net is that the service department
is a very strategic part of the dealership has become way more strategic than it used to be
previously. And astute dealerships are paying much more attention to that part of the business
and not just an afterthought. But Tony, I really want to thank you for this conversation. I know
we are going to be connecting more in the future, but you are doing an incredible job and really
adding to the value of keeping our industry healthy. And I want to thank you for that.
Well, Sanjeev, thank you. It has been a pleasure working with you. And I'll say one last thing,
if I could, if you're a dealer now and you're saying to myself, what does this make sense to me?
How do I find these schools? Simply go to the ASEE Education Foundation website.
And there's a program locator there. You can just plug in your zip code and it'll show you all the
schools in a 50 or 100 mile radius, whatever you want to set. And that's how you can make your
first connections if you're not sure how to get involved. So that's wonderful. Thank you so much,
Tony. Really a pleasure. Sanjeev, it has been a pleasure to take care. The dealers who win turn
insights into action. Now's the time to take the lead. This has been three key insights with Sanjeev
We'll see you next time. Views and opinions expressed by guests on this podcast are solely
their own and do not necessarily reflect the official policy or position of Capital One Auto,
Capital One NA or its affiliates. This content is provided for informational and educational
purposes only and is not intended to serve as financial, legal, tax or business advice.
Viewers should consult their own independent professionals regarding their specific individual
or business needs.
About this episode
Tony Molla and the hosts dig into how dealerships can future-proof fixed operations by treating the service department as a strategic engine, not an afterthought. They connect service performance to steady dealership economics through the ups and downs of the selling cycle, while tackling the technician talent shortage driven by more complex, computerized vehicles. The conversation emphasizes training baselines, qualified diagnostics capability, and building a technician pipeline via local CTE advisory committees, internships, and apprenticeships—rather than poaching.
Original notes
ASE Education Foundation veteran and technician advocate Tony Molla joins Capital One Auto President Sanjiv Yajnik to discuss growing dealerships through Fixed Ops.
Molla shares expertise on solving talent shortages and navigating evolving vehicle technology to drive customer loyalty and business growth. In this episode, Tony and Sanjiv break down three transformative shifts every auto dealer needs to make:
- The New Economic Engine: Front-end sales might close the first deal but your service department secures all the rest. Learn why fixed operations are the key to carrying a dealership store's costs through any selling cycle.
- Mechanics to Network Engineers: Modern cars require high-level IT skills. Attract elite talent by investing in technicians as strategic professionals.
- Stop Stealing, Start Growing: Move past poaching competitors' staff. Build a loyal pipeline by partnering with local CTE programs and apprenticeships.
ABOUT THREE KEY INSIGHTS
The auto industry is being reimagined in real time. To win in today’s landscape, dealers need actionable insights and high-performance tools to take the lead. Hosted by the President of Capital One Auto, Sanjiv Yajnik, this series convenes elite dealers and industry innovators to decode the shifts shaping the future. Known for his "Customer-first" philosophy, Sanjiv’s perspective is rooted in the belief that when dealers succeed, the entire industry thrives. His conversations prioritize transparency, pulling back the curtain on the backend infrastructure that powers modern customer confidence. Now’s the time to take the lead.
The views and opinions expressed by guests on this podcast are solely their own and do not necessarily reflect the official policy or position of Capital One Auto, Capital One, N.A., or its affiliates. This content is provided for informational and educational purposes only and is not intended to serve as financial, legal, or tax advice. Viewers should consult their own independent professionals regarding their specific individual or business needs.
Three Key Insights with Sanjiv Yajnik
Capital One
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