Dealer Jeff Aiosa has discovered that a side business is doing more for him than making money.
The owner of Mercedes-Benz of New London in coastal Connecticut has built a thriving business keeping classic Mercedes vehicles road-worthy. Aiosa, 62, has been repairing the collectibles in his service center for more than three decades to serve an unmet need.
“We had Mercedes-Benz owners in the region come to us saying, ‘We can’t find someone who can work on the cars,’ ” said Aiosa, who is also the Mercedes brand representative for the National Automobile Dealers Association.
But the side business is more than an additional revenue stream. It turns out it’s also a good way to hang on to talent.
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.”
The classics repair business also is a lead generator for other parts of the dealership.
Aiosa sponsors service clinics for the Connecticut-Westchester chapter of the Mercedes-Benz Club of America.
“We’ve had people who owned some of these older cars who have a good experience at the dealership and return to the store when they are in the market for a replacement, or new car,” Aiosa said.
Nor has the pandemic-caused economic contraction tapped the brakes on the business. The volume of classic Mercedes models coming in for service is up 10 to 12 percent over last year.
“In the eyes of collectors, these vehicles are stable investments,” Aiosa said.