AI and the future of aftersales: driving innovation and customer loyalty
By Marco Marlia, CEO and Co-Founder of MotorK
Aftersales has long been recognised as a key profit driver for automotive companies, yet it often takes a backseat to the more attention-grabbing new car sales. However, with aftersales accounting for a €500 billion global market and approximately €165 billion in Western Europe alone, its importance is undeniable.
In a scenario where aftersales currently contribute for nearly half of the profits for automakers and up to 40% for dealerships, technological advancements, and AI in particular, can lead to significant growth while enhancing the overall customer experience. As new vehicle sales face increasing challenges from electrification, connectivity, and digitalisation, this opportunity cannot be overlooked.
Today's customers expect seamless, personalised, and on-demand services throughout their entire vehicle journey, not just at the point of sale. This shift signals that traditional after-sales business models are no longer sufficient to maintain long-term profitability and customer loyalty. Embracing technological evolution is becoming critical for the sustainability and success of the evolving after-sales segment.
Leveraging AI to stay ahead of new competitors
The role of aftersales is evolving, and it is no longer enough for dealers to rely on the inherent loyalty of customers who return for routine servicing. With new competitors, particularly in the electric vehicle (EV) space, entering the market, the pressure to retain customers is growing. To compete with independent repairers and newcomers offering agile, and more cost-effective services industry players must rethink their approach to after-sales strategies.
AI-driven solutions are pivotal in this transformation. They create tailored, predictive strategies that meet the evolving needs of today’s customers. By leveraging AI for predictive marketing and sales, dealerships can offer targeted services, delivering the right offer to the right customer at the right time.
Instead of broad, generic campaigns, predictive marketing uses data from past vehicle and customer behaviour to forecast future service needs. This approach allows dealers to offer timely, relevant services that not only increase revenue but also build trust and long-term loyalty. MotorK’s internal analyses revealed that AI-driven after-sales campaigns can deliver a conversion rate to invoice of 8% to 10% on average. For dealerships, this translates into a 25% - 30% increase in after-sales services and accessory sales, a clear demonstration of the benefits of personalised, data-driven outreach.
Advanced AI solutions in the aftersales sector have the capability to analyse millions of customer profiles and vehicle data, generating millions of predictions based on billions of calculations. This precision allows dealerships to continually refine their strategies with detailed performance insights, enabling them to offer highly tailored services that align with evolving customer needs.
AI shaping the future of aftersales
The rise of connected vehicles and electrification is accelerating significant changes in the after-sales landscape. Electric vehicles (EVs) bring both unique challenges and opportunities. While over-the-air (OTA) updates and remote diagnostics may reduce the need for traditional maintenance, they will also introduce new, more complex services. In this evolving environment, AI-powered platforms will be essential for managing the vast amounts of data generated by connected vehicles.
These platforms allow dealerships to monitor vehicles in real-time, anticipating customer needs before they arise. This not only improves customer satisfaction by reducing unexpected breakdowns but also enables dealers to operate more efficiently, optimising workforce and inventory management.
Competing in a dynamic aftersales market
As the after-sales market becomes increasingly fragmented, with independent repairers, digital-first service providers, and EV startups all competing for a slice of the pie, dealerships and OEMs must adapt swiftly. The pressure to retain customers will only grow, and those who fail to embrace new technologies risk losing ground to more agile competitors. However, with the right tools, industry players can turn these challenges into opportunities, ensuring they remain central to the customer’s journey long after the sale.
AI-powered solutions are no longer just tools for improving efficiency; they are reshaping the after-sales experience to meet modern customer expectations. While the industry has traditionally focused on the point of sale, a holistic view of the entire vehicle lifecycle - including post-purchase experience – will be crucial for ensuring profitability and long-term customer loyalty By leveraging AI for personalisation, predictive analytics, and cost-effective solutions, dealers can create strategies that not only meet customer needs but also drive long-term loyalty and profitability.
MotorK
MotorK is Europe’s leading automotive sales and marketing technology company and the only player in EMEA able to provide a full stack of products and services to support the digitalisation of the entire car sale process. No other technology player in Europe has the same level of vertical expertise in the automotive industry..