FEATURE BY SCOTT LEAR WARRANTY PRODUCTS FOR SERVICE RETENTION To Help Offset the Decline of Service Customers A lthough auto sales and service departments have been the hardest hit by the current supply chain and computer chip challenges, they can also be the most significant opportunity for dealership growth and retention. This article will explain how warranty products can increase service retention and help offset the decline of service customers. THE CURRENT ENVIRONMENT A 20% drop in new vehicle sales, down from 18.1 million SAAR (Seasonal Adjusted Annual Rate) in 2018 to a projected 14.4 million in 2022, negatively affects future service department sales across the country. Fewer unit sales today equal fewer customers coming back for service tomorrow. In addition to the lack of inventory production, OEMs are shifting focus from ICE (internal combustion engines) to EV (Electric Vehicles). This will further strain fixed operations, as EVs require less essential maintenance and shop hours than ICE units. These two factors will force dealerships across the country to switch 42 their focus to used vehicle service retention as an offset to the reduction in new vehicle volume. NEW FOCUS ON USED VEHICLE RETENTION RATES Unlike with new units, OEMs and dealerships don't focus on KPI (Key Performance Indicator) index reports for used vehicles. This lack of focus and reference