Costs, taxes and energy bills are biggest worries for garages in 2024

Rising operational costs, taxes and energy bills are set to be the most significant challenge for three-quarters of vehicle repairers in 2024, according to the Motor Ombudsman that released the results to its annual survey.

These worries, garages say, will be further compounded by higher spare parts costs, pushed up by issues such as shortages and inflation.

In light of this increased expenditure, just over half of respondents (54%) stated that they would be confronted with the dilemma of having to raise prices in order to sustain a viable business that is costing more to run.

This also comes at a time when garages foresee consumers putting off essential repairs (54%), and routine maintenance (49%) to save money, as household finances remain under strain.

This mirrored the findings about the hurdles encountered in 2023, where 53% of businesses said customers were reducing the level of spend on their vehicles due to the cost of living crisis.

Recruiting difficulties

Over half (56%) said that one of the main difficulties they experienced last year was recruiting additional technicians; a greater proportion (58%) expressed the same concern when looking ahead to the next 12 months. This comes as qualified and skilled mechanics remain an increasingly sought-after resource in the labour market.

This also paints a more challenging picture for hiring staff – research from the Motor Ombudsman in 2022 showed that 50% of businesses struggled to recruit the technicians needed to meet demand.

Electric vehicles

With more electric vehicles, both new and used, hitting the roads, and given that they require fewer mechanical parts than petrol and diesel models – reducing the need for maintenance – 26% of repairers expressed concern that battery-powered cars would make business less profitable.

However, this is encouragingly down from 32% seen in the same study about expectations ahead of 2023, as more businesses look to embrace new technologies and seek other revenue streams.

Investment

In terms of the positive developments that garages and workshops are seeking to bring to their business this year, over half (52%) said they would look to invest in recruitment to expand their workforce from a competitive pool.

In addition, over a third of respondents (35%) are considering refurbishing existing premises to improve the look and feel of the experience for customers, with a fifth planning to add workshop and MOT bays, as well as additional on-site electric vehicle charging points to accommodate growing demand for EVs.

Study “presents a clear picture”

Bill Fennell, chief ombudsman and managing director of The Motor Ombudsman, said: “Our latest study presents a clear picture in that garages and workshops will still have to contend with a number of underlying challenges this year, with rising costs one of the most pertinent, as this ultimately affects their bottom line.

“This will need to be balanced with the need to remain competitive in order to deliver an attractive proposition to motorists, at a time when household budgets remain under strain.”

 

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