The typical franchised dealership increased its service and parts sales by more than 5 percent in 2014, and average net profit for this department climbed for the second straight year, according to NADA Data 2014.

Meanwhile, total service and parts sales for all franchised dealers was a combined $91.73 billion last year, well above the sub-$80 billion level it was at just five years earlier.

So, perhaps then, it comes as no surprise that KeyBanc Capital Markets listed strong service and parts sales among three drivers pushing its optimistic outlook for earnings growth in the retail car business the next couple of years.

KeyBanc’s analysis of its most recent dealer survey — which includes a mix of independent and franchised dealers — also mentioned strong used-car sales and current dealership acquisition trends as primary factors leading it to “remain positive on earnings growth for the automotive retail industry” for 2015 and 2016.

The company said in the report that its parts and service “annual revenue growth outlook in the mid-single digits or higher through 2016 remains intact.”

“We believe the high-single digits is probable and low-double digits is possible driven by an accelerating growth in the number of 0-6-year-old vehicles in operation to 5-6-percent annual growth, (up) from -1 percent we’ve seen on average in recent years,” it noted.

In other words, more cars in this 6-and-under age group means more service and parts opportunities for dealers.

What’s more, KeyBanc said that increasing recall numbers could be a boon for this department’s revenue, “even at relatively conservative assumptions and despite difficult year-over-year comparisons.”

As for current trending, the first quarter certainly showed some positive developments.

Gross profit margins for parts and service were steady year-over-year, with 74 percent of KeyBanc’s respondents reporting “flat” movement.

Seven percent increased their parts and service gross profit margins by more than 100 basis points, and 19 percent saw it decrease by more than 100 basis points.

Editor's Note: This is Part II in a three-part series recapping KeyBanc Capital Markets' expectations for continued growth in profitability for the retail car business. Part I discussed the role of strong used-car sales.