What’s next for the automotive after sales industry?

//What’s next for the automotive after sales industry?

What’s next for the automotive after sales industry?

2020-02-06T17:12:28+11:00 November 6th, 2019|Automotive|

To assist current and potential clients, we have identified some of the biggest issues facing independent businesses in the industry. Along with these potential threats, there are also many new opportunities to strengthen your business and thrive.

Data is king

The stranglehold on manufacturer’s OEM data by car dealerships gives in-house service departments a major advantage over independent repairers. In 2015, the Federal Chamber of Automotive Industries (FCAI) introduced a code for voluntary data sharing, but unfortunately this has proved ineffectual and the government is still debating if, and how, to develop a mandatory code. The Australian Competition and Consumer Commission (ACCC), the VACC and AAAA continue to lobby for a mandatory code.

The opportunity: Many mechanics and auto electricians have joined technician groups and forums to effectively access or share OEM data. This is a proactive way to stay one step ahead until the code is effectively implemented.

The impact of inhouse service workshops

Dealers are currently facing a reduction in margins due to increased sales on lower priced cars and an overall slowing of car sales. In the near future, private car ownership is expected to drop drastically after fully autonomous cars pass regulatory approval. As a result, dealerships have begun to value the aftermarket arm of their businesses more than ever before, with a new focus on expansion.

The opportunity: Begin preparing a marketing plan for your own business. What services can your independent business offer that are not on the menu at a dealer’s workshop? How can you leverage your client relationships to increase the volume of work coming in the door?

Extension of warranty periods

The extension of warranty and free or fixed service periods is limiting the number of new cars serviced by independent workshops. However, some factors mitigate these changes; the average ownership period of cars in Australia has increased to 10.1 years. In addition, owners of older cars are becoming more concerned with servicing requirements and expect to spend more money on repairs than those with cars under three years old.

The opportunity: Again, independent repairers need to be developing and enhancing marketing plans to target this attractive and lucrative client segment.

Change is coming – the rise of electric and autonomous cars

Exactly how soon autonomous car regulations will be passed in Australia is undetermined, but electric cars, offering reduced servicing requirements, are encroaching.

Electric cars and hybrid EVs are expected to make up 30% of cars sales by 2025 and 60% by 2030*. Further, within 10 years of regulatory approval, which is expected to occur in the next two years, the majority of passenger miles are expected to be transport as a service (Taas) using autonomous cars instead of individually owned cars^. (RethinkTransportation)

The opportunity: Auto repair businesses need to be looking ahead at emerging workshop technology and skilled labour to repair these vehicles, or risk being left out of a growing market segment.

Over a series of three articles, we will discuss these issues and offer recommendations on how business owners can reduce business impact and still find new opportunities for growth.

If you have an issue that is challenging your business or would like to explore how Quantum Financial Group can help future proof your business, please contact us at cathy@qfgroup.com.au or call 03 9799 3832.

*Source: JP Morgan
^Source:RethinkX (https://www.rethinkx.com/transportation)