Tech Giants Expand Tech Workforce in Response to Escalating Demand
Dealerships Boost Service Capacity with Increased Technician Headcount
Franchised, new-car dealerships, such as Sonic Automotive, Group 1 Automotive, and AutoNation Inc., are experiencing an increase in both customer-pay service work and sustained uptick in warranty work. This surge can be attributed to a strategic increase in technician headcount, as reported by these dealerships.
Sonic Automotive, for example, reported a 10.4% increase in second-quarter revenues for its parts, service, and collision repair business, with a 9% increase in customer-pay gross profit and a 34% increase in warranty gross profit compared to the same period in 2024 [1]. The continued strength in their customer-pay revenues is attributable to raising their technician headcount, along with other efforts, as stated by the company [2].
Group 1 Automotive reported a 14% increase in customer-pay revenue in the second quarter compared to the same quarter in 2024, while warranty work saw a hefty 32% increase [1]. The company is also repurposing some of its collision-repair capacity to better-paying work and increasing Saturday hours to add capacity without adding service bays [1].
AutoNation Inc.'s parts and service revenue stood at $1.2 billion for the second quarter, up 11.5% compared to the same quarter in 2024, and $2.4 billion for the first half, up 6.7% [1]. The company's technician headcount at the end of the second quarter is up 3% compared to the same quarter in 2024 [1].
The increase in technician headcount has positively impacted customer-pay service work by expanding service capacity, likely reducing wait times and increasing throughput. However, direct data on warranty work impact is not explicitly cited. Given that warranty repairs typically require certified technicians, an increase in qualified technician staff would logically also enable these dealerships to perform more warranty work efficiently, improving service capacity and customer satisfaction.
Industry-wide technician shortages persist, with California experiencing a shortfall of approximately 5,000 technicians [3][5]. Forward-thinking dealerships and associations are implementing apprenticeship programs to build technician pipelines and address this gap [1][3][5]. These efforts help maintain or grow technician capacity, which in turn supports increased customer-pay work.
Sonic Automotive added a net 335 service technicians in 2024, who are projected to generate total additional fixed operations gross profit at an annualized rate of about $100 million a year [2]. Each additional technician at Group 1 Automotive represents an average of about $15,000 per month in gross profit [4].
Michael Manley, AutoNation CEO, states that the company continues to focus on its technician workforce and expects its fixed ops business to grow "roughly mid-single digits" on average [1]. Kenningham from Group 1 Automotive mentions that the current, big-volume recalls from Toyota, General Motors, and Ford contribute to the outsized increase in warranty work [1]. However, Group 1 doesn't expect such a big increase in warranty work on an ongoing basis, and current, high warranty numbers won't be repeated in the quarters ahead [4].
For the first half of 2025, Sonic Automotive reports a 7.8% increase in fixed operations revenue compared to the same period in 2024 [1]. In summary, increasing technician headcount has supported stronger customer-pay revenue performance in dealerships like Sonic Automotive by expanding service capacity [2]. While direct data on warranty work impact is not cited, it is reasonable to infer that warranty service operations similarly benefit from greater technician availability.
References: 1. AutoNation, Sonic Automotive, Group 1 Automotive Report Q2 Earnings 2. Sonic Automotive's Continued Strength in Customer-Pay Revenues 3. Tackling the Technician Shortage: Apprenticeship Programs 4. Group 1 Automotive's Q2 Results and Outlook 5. California's Technician Shortage: A Crisis for the Auto Industry
- Sonic Automotive, Group 1 Automotive, and AutoNation Inc., three major dealerships, have increased their technician headcount as a strategic move to handle the surge in both customer-pay service work and warranty work.
- The rise in technician numbers in these dealerships is expected to positively impact not only customer-pay service work, by expanding service capacity and reducing wait times, but also warranty work, since qualified technicians are required for such repairs.
