Mercedes-Benz of New London thrives on servicing classic cars
September 28, 2020
Modern cars, some of which have more lines of software code than a Boeing 787, are incredibly complex machines. That technology advancement has left a generation of older technicians out-skilled.
With the classics service business, Aiosa found a way to give the dealership’s senior technicians, some of whom have more than 30 years of experience, a new lease on life.
“The technician who would normally get pushed out because they can’t stay current with the technology now has job security,” Aiosa said. “There’s always one of those older cars to work on that they are very proficient with.”
Aiosa has leveraged his seasoned work force into a competitive advantage.
“We’ve created a niche,” the dealer said. “We have a reputation for working on older, out-of-warranty cars that the other dealerships don’t have — because they don’t have the skilled work force with the know-how.”
The classics business draws customers from a 150-mile radius.
“There’s never a day when you don’t see a classic Mercedes being worked on in the workshop,” Aiosa said.
With new-car margins under pressure from intense competition, the classics repair business offers an inventive way to generate revenues and profits for Mercedes-Benz of New London.
“It’s money that would typically go to independent service providers that we are keeping in the franchised dealer network family,” Aiosa said.
The business also buoys the bottom line. Aiosa estimates it generates up to 10 percent of the dealership’s profits.
“Margins are higher than the average repair order on a newer car because it’s labor-intensive,” he said.
“Gross profit on labor is typically higher than on parts.”
It helps that Aiosa keeps his investment in the side business to a minimum.
“The capital that is required is what I am retaining — it’s that technician who would normally move on,” he said. “We don’t spend a dime on marketing. It’s strictly word of mouth.”
While the older cars are serviced alongside newer Mercedes models, the dealership provides a boutique experience to its classic-car clients. For those customers, Aiosa said, “We have a service adviser who has a lot of legacy with the brand and understands these cars.”