The classic workshop business is facing a profound paradigm shift. So it's urgent time to act.

Below, the training and consulting company Promotor XD provides important tips for optimizing aftersales business. Experts are convinced that if the industry simply “businesses as usual” there will be a risk of up to 2025 percent* less revenue in the service business as early as 18.

The earnings situation in service has been under pressure since 2019. In view of the current paradigm shift in the service business - not least due to the trend towards e-mobility - the situation has become even worse. The players in the industry are currently increasingly feeling this, after all, service has always been an important pillar of profit making. The experts at Promotor XD emphasize that it is urgently time to act. Otherwise there is a risk of further slumps in the service business by 2030. Medium-sized companies around larger cities are particularly affected.

Causes of the service crisis under the magnifying glass

The current reasons for the service crisis are clear to the promoter The decline in sales of new and used cars will also be felt in the workshop in the medium term. In addition, there is the continued rapid advance of battery-electric vehicles (BEVs), promoted by politicians, which has numerous negative effects on the workshop business. BEVs only have 200 moving parts compared to traditional combustion engines with 1.400 and also fewer components; Added to this is the loss of the classic lubricants business - a total decline in service income of up to 16 percent*.

Automated driving and new assistance systems also have a negative impact on the workshop business, as this leads to fewer damages and repairs and is therefore associated with a drop in sales of up to 20 percent*. The different purchasing models for cars also leave their mark. In view of the fact that more and more customers are favoring subscription models such as Vehicle-As-A-Service (VASS), centralized services similar to claims management in the event of accidents are also coming into focus. “This is associated with an expected decline in sales in classic service of up to 2025 percent* by 18 and up to 2030 percent* by 40 – but it has already begun,” says promoter XD.

Countermeasures

In accordance with the predicted threats to the service, the experts at Promotor XD recommend a courageous approach to the new challenges. Here entrepreneurs are challenged with their courage and creativity. Possible opportunities and returns**:

  • With service-on-demand programs and corresponding service contracts, service revenues of between two and five percent can be recovered. The trick is to get the car dealership offer into the customer's car.
  • Competencies and services relating to e-mobility - be it charging infrastructure, battery storage, electricity generation or photovoltaic services - can generate additional income per company.
  • A competent tire shop can also make up ground in the area of ​​e-mobility, given the significantly higher tire wear on electric vehicles.
  • Digital customers can also be systematically acquired via workshop portals such as FairGarage. According to analyzes by FairGarage, the conversion rate (this indicates the inquiries from digital customers that generate concrete sales) in Germany is already 2,4 percent. The experts at Promotor XD aim for a full eight percent for their customers via these platforms. Against this background, they analyze the current processes in the car dealership and adapt the “digital journey” to regional customer needs.
  • The basis for all decisions must be knowledge of your own market, target groups and regional potential, because today you can no longer work solely with gut feeling. This knowledge is the basis for optimal and future-oriented decisions. To this end, Promotor This makes it possible to go into detail directly during a personal conversation on site, to accurately analyze the respective situation using key figures and to use the right levers for optimization.

In addition to the measures mentioned, Promotor XD also urgently advises the industry to invest in further training measures. So Promoter XD offers extensive From Training, starting with the key topic of electromobility through wheel changing services to customer communication and management training.

Offer affordable service work

Promotor The mobility provider APZ and puls Marktforschung also know this. In a representative study of around 1.000 drivers from Germany, they have now found that more than one in two drivers (58 percent) are very interested in inexpensive repairs. Only 26 percent use these offers, meaning that one in three car drivers in Germany could also be won over. The most popular places for German drivers to get cheap repairs are independent workshops at 43 percent. This is followed by brand workshops (42), body shops (35) and system workshops (21). According to the study, the main barriers for branded workshops are price/high-price image (61 percent) or experiences such as “it is not offered”, “more is done than necessary” and “it takes too long”.

It also became clear that drivers of the Mercedes (75 percent), Audi (66) and BMW (52) brands in particular recommend their workshop after a smart repair service. Overall, this study also sees great opportunities to win workshop customers, especially with older vehicles, through smart repair. The study also confirmed that when it comes to inexpensive repairs, customers primarily expect professional expertise (51), a short time (45), free rental cars (34) and online appointment booking (23). The maximum time period for such repairs may not exceed one day thereafter.

As measures, the authors of the study suggest that the industry always make fixed-price offers, offer thorough interior and exterior cleaning of the vehicle with price advantages when booking, give an indication of the length of time (one day) and offers for online bookings. Collection and delivery service and optional offers for rental cars/demonstration cars. In addition, the workshop should ideally highlight rational and emotional arguments for thorough, professional vehicle care and cleaning, convey its expertise via videos, for example, invite satisfied Smart Repair customers to make personal statements and highlight selected customer feedback and, last but not least, regularly carry out a needs analysis To carry out follow-up offers for regular services and other after-sales services. The goal must always be to win back customers of older vehicles and keep an eye on the sale of the next vehicle. Promotor XD is convinced that excellent and continuous communication with the customer should never be ignored.

And finally ... It is important to prepare for the transformation of the automotive industry and the associated profound paradigm shift with the measures mentioned in the short term. It is rightly said that only those who move with the times do not move with the times. The experts at Promotor XD conclude that it is necessary to act quickly.

Sources:

* Bain & Company 2020, Beryls 2020, Boston Consulting Group 2021, Promoter XD 2022

** Promoter XD