May 2020 Future aftermarket shares for franchised and independent repairers Webinar
Over the last year, ICDP has used its proprietary simulation model to examine recent and potential future evolution of the volume and value of the main European aftermarkets to the 2030 horizon. Given the changes in the influencing factors that we detailed in our April 2019 Workshop, we predicted that the aftermarket volumes will continue to fall over the 2019 - 2030 period.
During the last few months, we built on this simulation to look at how market shares might develop between the franchised and independent channels in the context of a declining and changing market over the next decade.
In this webinar, we looked briefly at the current balance of power in some major EU markets and reported on the main outputs of our simulation focusing on some of the issues which might affect the operator market shares at the 2030 horizon:
Today EV customers mainly trust franchised workshops for servicing and repairing their car. In the future, as electrification goes mainstream and EV customers get used to it, one can question whether their aftersales purchase behaviour will get closer to that of current ICE owners.
With regards to data that will be ‘produced’ by connected cars, dealers might be able to get - not only - a direct access but also the necessary skills to manage, analyse and pull value from those. However, in terms of access to connected car data, and in order to prevent the market from any competition distortion, there is no doubt that the EU regulators will scrutinise the fairness of the terms and conditions that will apply to IAM operators.
Moving to the non-technology based factors, we expect the share of new cars to be sold via bundled leasing to continue to grow. These finance schemes have a strong influence on enabling dealers to improve customer loyalty via the bundled service packages. To respond to the expected OEM channel bundled leasing growth on new cars, IAM operators might consider developing a counter offer dedicated to used cars.
On the one hand, the stronger financial structure of dealers should offer them a greater capacity to invest in the equipment, tooling and training that are imposed by both the technology increase and the expected changes in the market environment. On the other hand, thanks to the spread of electrification in parcs, independent repairers might also be able to access lower cost multi-brand workshop equipment and training sessions dedicated to EVs.
Dealers will need to invest in the new service formats that will be required to meet future customer expectations (both for private and fleet) such as micro-outlets, mobile workshops or central repair centres. In parallel, the expected consolidation of franchised networks in the future might push OEMs and/or their dealers to look for alternative service providers in areas where they are not present. Why not, in this context, consider cooperation with a selection of IRs?