What is the outlook for the Aftersales Market?


Every day I receive invitations to various webinars where experts discuss the future of one or the other sector. We all know: the year started great and then we all faced the greatest slump since WWII. You hear assuring words that things will be fine for those who can adapt quickly, have great concepts and niche products. But what about all the “normal” companies, who have been providing their services for a long time?

We all say “Well, maybe it is time that they change their model and digitalize their services!”. But it is not that simple. What about work- and bodyshops who must repair hands-on the vehicles? Since the mid-90s fixing a car has less and less to do with mechanics. Self-diagnostic and reporting capability have been introduced in the 80s to inform drivers of possible problems and Diagnostic Trouble Codes assist technicians with troubleshooting problems. Mechanics of the past had a strong technical knowledge of mechanics and hydraulics, whereas today they need specialized tools and constantly invest time in learning how new systems function.

That shows that workshops can change and adapt – but COVID-19 is like an elephant in the room where it is hard to predict how it will affect the Aftersales sector. There are too many factors which play in – some of them even with a positive effect. McKinsey listed five points – and I added another one – which will have an influence on the Aftersales market:

First, vehicles travel less miles and therefore wear & tear goes down and with this, the service intervals are pushed back. A side effect of less miles travelled is that there are fewer collisions, which has a major impact on body and paintshops. The third one with a negative impact is that customers are ordering spare parts and accessories through digital channels. The next point is an interesting one: many people are delaying inspections or discretionary repairs, and some government transportation agencies are relaxing deadlines for mandatory technical controls and inspections. But on the other hand, drivers might delay the purchase of a new vehicle and invest more money to keep their old car going just a little longer. What we can see also is that several car owners decide to make the most of the downtime of their vehicles and take them now to the workshop to do overdue services or maintenance work. The last point McKinsey is mentioning is the lower use of public transportation. It remains to be seen if this is only temporary or if commuters will continue to trust only their own private space. Another question which I believe will have a major influence on the aftersales market is, if people will keep up more than one family vehicle or substitute it with bikes, scooters, ride and carsharing solutions, to bring down the fixed costs.

Our Director of Aftersales, Elvio Di Battista confirms that since the second week of March, figures dropped in the Workshop and parts department, but he is expecting that in the coming weeks the volume will increase marginally again. The Bodyshop has been always booked for weeks in advance, so to date, we did not have a negative impact, however as the traffic dropped, there is the expectation that there will be less collision repairs. Elvio Di Battista’s view on 2020 is still positive: “If the confidence recovers by Q4 the numbers should be close like January and February, again”.

Coming back to the first point: companies which can adapt or have unique products will be fine. What would that mean for the aftersales experience? As consumers learned from Amazon & Co, car drivers want the same in their aftersales experience: making the inconvenient, convenient – online, frictionless, no-contact key drop-off and car swap. Easy nowadays with the right technologies. With or without coronavirus this change must come. So again, it will be time for the aftersales department to adapt and to invest time in learning how new systems – and consumer behaviour function.

Written by Nicoletta Moss
Image by Sandeep Singh

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