Industry blog: The future is far from certain

by

Steve McCann is Managing Director of CES and Cat Council member

Steve McCann
Steve McCann

The last few years have shown that predicting the future is far from easy. One certainty is that vehicles will continue to become more technologically advanced, particularly when it comes to fuel. Rising diesel prices could see lower capacity petrol engines using turbo or hybrid technology becoming more popular. Also, expect to see further progress in technology, such as regenerative braking, that utilises various power sources and improves fuel efficiency. For distributors this will mean adapting to different parts demand and technical knowhow.

With insurance premiums and fuel costs rising, running a car is increasingly expensive. One positive outcome has been the migration by motorists from franchised dealerships to independent garages. The question is whether this is temporary shift or more permanent.  To encourage long term behavioral change, independents will need to invest in training, standards and equipment, so they’re well positioned to retain this custom once the economy improves.

This will be particularly challenging as franchised dealers react to stagnant car sales with aggressive advertising and offers on servicing. With a gloomy economic outlook, it’s likely that dealers will continue to attack independents to protect their revenue. Making sure motorists understand that under block exemption they have a choice for in-warranty servicing has never been more important.

Increasingly complicated vehicles will mean that technical competence will become even more important. Continual learning and skills development will be vital for technicians. You can see the technician of the future being seen in the same light as engineers, architects and programmers as a highly specialised profession.

For this reason it will be increasingly vital for technicians to invest in their future. This includes gaining new knowledge by attending training courses on new technology, such as hybrid systems. It goes without saying understanding and owning up-to-date diagnostic equipment will also be vital – nowadays there are very few jobs that don’t involve diagnostics. Finally, using suppliers that can provide technical support and continually invest themselves in technology and training will help garages future proof their business.

When it comes to parts supply, garages currently have a plethora of choice including the web. It’s doubtful the market can continue to sustain so many offline suppliers. Consolidation is inevitable and it will unfortunately mean many smaller factors find it harder to compete. As technology advances, those that adapt and focus upon a niche may well survive. We expect a landscape of fewer factors, dominated by larger distributors who will deliver a wider range of services. Even for those, it will no longer possible to simply offer the lowest price or the most add-on services. The market now demands a combination of both – that’s best value and best price.

For long term success, all players in the aftermarket have their part to play. Manufacturers need to treat the aftermarket as a key part of their business. That means offering the whole package – range, availability, price and support. For distributors, investing in value-add that helps independents compete, along with pricing that’s fair and not self-defeating has to be the way forward. Whilst independents must have the confidence to sell their skills and knowledge, not undervalue it. They should also support the distributor that supports their business.

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