Trucks dealerships are embracing telematics and prognostics

The nature of the commercial vehicle industry has changed considerably from past years as market participants have been gearing up in efforts to modernize their strategies to face today’s host of challenges. Even through the volatility of market changes, the truck dealership role has been firmly entrenched in its traditional practices within the trucking industry.

Dealerships are often burdened with challenges ranging from operational structure, price competitiveness, shortage of trained technicians, low product/service differentiation and inventory management.

Further exacerbating these challenges is the maturity of the industry where equipment growth is expected to remain relatively flat over the next 10 years. OEMs have been burdened by approaching government regulations to improve truck performance and reduce emissions, which is expected to push the price of new equipment higher.

Also, economic pressure has required customers to push for higher productivity, while extending the life of their equipment past typical replacement cycles. As a result, dealership equipment sales have not yielded the same profit margins as before, which has put additional stress to improve revenue growth from supporting departments within the dealership.

Parts and services have become the integral part of the dealership strategic cost structure. As a matter of fact, in 2013, many dealerships have seen their parts and service business develop into their largest revenue generator.

Minimize Downtime

With the oncoming technological advances and trucks on the road being used longer than usual, the demand for quality maintenance and upkeep is at a premium. These issues are being intensified by the shortage of trained technicians, proprietary OEM parts and increasingly high costs of repair work.

This has led fleets, especially the smaller ones, to consider outsourcing their maintenance processes.

Dealerships must look to implement customer support programs that focus on delivering customer value and complete vehicle solutions that effectively minimize downtime. Dealers capable and willing to capitalize on this trend will realize a competitive advantage over their competitors for years to come.

These forward-thinking dealerships that fearlessly embrace the idea of change and enhance customer value will have better positioned themselves for success.

Connectivity Technologies

Connectivity technologies, such as telematics, remote diagnostics and prognostics, are the future of the transportation industry and also an emerging high-potential revenue stream for dealerships. These connectivity technologies can provide significant value to customers, as telematics services can help to improve fuel savings and remote diagnostics can immediately identify problems and effectively reducing maintenance costs.

Prognostics, on the other hand, goes a step further, aiming to predict component failure, thus helping increase equipment uptime.

As a result, flexibility improves as dealers are able to better serve their customer base through customizable solutions, on-site visits and optimized maintenance schedules.

Dealers that can effectively leverage these connectivity technologies look to benefit from increased customer communication and customer loyalty leading downstream to greater service/part sales.

Moreover, when the connectivity infrastructure is fully implemented within the dealership, this service will provide a new and robust monthly revenue stream.

Dealership success starts and ends with consistency. Dealers must continually aim to satisfy all customer needs and concerns.

Wallace Lau is a senior research analyst for Frost & Sullivan’s Automotive & Transportation Commercial Vehicle research practice. He focuses on monitoring and analyzing emerging trends, technologies and market behavior in the commercial vehicle space. Frost & Sullivan ( works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants.