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“Dramatic changes are ahead for the automotive aftermarket, a segment that has been a major and stable profit contributor to the automotive industry in general.”
(McKinsey & Company 2018 in their study “Ready for inspection – the automotive aftermarket in 2030”* )

In the next 10 years and as a consequence of technical innovations like the upcoming launch of a new generation of electric cars, autonomous cars, of changing customer behavior and new mobility solutions, the automotive aftermarket is assumed to change fundamentally until 2030. Stakes are high, as the automotive aftermarket is crucial for customer loyalty and satisfaction, as well as for gathering customer data, vehicle data and –  with more and more connected cars – also for predictive maintenance and thus for securing high quality standards and fast pace of the associated supply chain of parts and accessories.

During 2018, we at EASI’R have been approached by more and more OEMs and importers which were looking for the right digital tools that enable them to prepare their network of dealers and workshops for the changing automotive aftermarket. Since fall 2018, our Lead and Sales Acceleration platform now also provides additional aftersales functionalities that will enable our customers to gain not only 360 degree insights into customer and vehicle data, but also enables them to ensure a truly outstanding customer experience – reaching from the initial online or offline contact with a dealer or workshop, until the purchase, all aftersales activities, and the repurchase and financing management. By enabling an integrated concept between OEM, dealers and workshops, EASI’R creates a new level of customer centricity, customer satisfaction, loyalty, success orientation and thus equips OEMs and importers for the changing conditions of the future aftermarket.

In this blog post, we want to provide you with a comprehensive overview about the major aftermarket challenges ahead as well as with some strategic advice on how OEMs and importers can prepare for the upcoming changes, using the software solutions already implemented at dealerships and workshops.

Let’s start with a brief look at the predicted changes until 2030 to understand the causes of aftermarket change and to then deduce a rough action plan on how OEMs and importers can react to remain in control of aftersales processes, customer data and customer loyalty. Leading experts mostly name the following three major areas of change that will directly affect the future aftermarket during the next years (Sources: PwC**, McKinsey*):

  1. Changes of the vehicles
  2. Changes in customer expectations
  3. Changes in the conditions of the market due to new players

CHANGES OF THE VEHICLE

Less tear & wear but more maintenance: Autonomous driving will change tasks and required skills at workshops

Autonomous driving

According to the McKinsey study, aggressive estimates assume that approx. 50 % of passenger vehicles sold in 2030 will be highly autonomous, 15 % fully autonomous. This will have a direct impact on the aftermarket business because the vast majority of accidents is caused by mistakes made by drivers (in fact, studies show that human error is responsible for about 90 % of all accidents today***). Therefore, experts assume that by taking the human factor out of driving, autonomous vehicles will lead to less crashes and thus to fewer repairs. On a related note, also a lot of tear & wear is caused by a suboptimal way of driving, like damaging braking behavior. So again, an autonomous vehicle that chooses an optimal driving and e. g., braking style, will also lead to less tear & wear and so to fewer repairs.

However, on the other hand it is assumed that autonomous cars will of course need a very strict, high frequent plan for check-ups and maintenance, as those cars are equipped with very sensitive parts which need to be 100 % functional at all times.

In any case, software will get more and more important and workshops need to be prepared with very well educated people who have the required car specific software skills and a strong service-minded setup.

Electric vehicles

Also the upcoming rise of electric vehicles is assumed to lead to fewer need for repairs because electric vehicles have fewer moving parts which again is assumed to lead to less wear and tear in the future. Similar as with autonomous cars, electric vehicles require a new skill set from workshops, so that they can provide the needed service for a growing set of components like batteries and electrical engines.

Connected cars

Already today, cars are able to send information on necessary repairs and check-ups to the workshops themselves, with the vehicle providing valuable information about the degree of wear and tear, of the amount of miles driven, of the driving behavior and much more. Based on the data generated by the car, the next customer visit at the workshop can be predicted.

In addition, this will also become of more and more value for car sales people in the dealerships: When the sales team also gets access to the data generated by the car, dealers can use that information for a truly targeted, new level of re-purchase management and customer loyalty program. Besides from that, pooled car generated maintenance and repair data will enable an improved collaboration between part suppliers and workshops, meaning that it is essential for workshops to ensure fast repairs with all necessary parts available, without waiting time for the customer, in order to remain competitive.


CHANGES OF CUSTOMER EXPECTATION

With more and more customers comparing prices online, the competition between workshops will further increase within the next few years.

Digitalization has already led to very well informed automotive  leads and customers today, using online price comparison sites and reading reviews of other customers, searching for the best solution. The McKinsey report finds that already now, more than a quarter of aftermarket customers in Germany, UK and France use online channels to evaluate workshops.* This trend is assumed to increase in the next few years, and thus enhancing the competition between workshops.

Mobility is another point that will affect the aftermarket within the next few years. According to a study from PwC*****, more than one in three kilometres driven in 2030 will be ‘shared’. That development will on the one hand imply a greater meaning of fleet business in the future and on the other hand also fewer touchpoints between OEMs, workshops and the end users. Besides from that, shared cars are assumed to spend more time on the road than cars under single ownership, thus leading to higher tear & wear, needing more maintenance and repairs by workshops.

Less contact between workshops and customers: As just outlined above, rising mobility will diminish the contact between workshops and end users. Similarly, also with autonomous cars, the contact between workshop and customer might decrease as the car will be able to drive itself to the workshop at one point, taking the personal interaction out of the business.

OEMs and NSCs need to prepare for that development as studies show that today, customers show a very high degree of loyalty with workshops**** (source: DAT report 2018 ) which also has a positive effect on collaborating dealerships and thus helps to strengthen brand loyalty.


HOW OEMS CAN REACT TO THE CHANGING AFTERMARKET

Against the background of the above named changes ahead, OEMs and importers should react early to put things on the right track for securing customer loyalty for both their brand and their workshops in the future. It has also become clear that a more integrated approach, incorporating OEMs/importers, dealers and workshops will be beneficial to assert their leading position against new players trying to enter the market.

First and foremost, facing fewer customer touch points in the future, OEMs and importers must ensure that the remaining interactions with dealers and workshops will be outstanding and highly service orientated. Therefore, a close collaboration between the three parties – OEM/importer, dealers and workshops is needed in order to gain 360 degree insights into a customer’s current situation.

Knowing how many miles customers have driven with their car, knowing how many repairs or accidents they have had, how their purchase history looks like, which accessories they were interested in in the past, just to name a few examples, will enable OEMs to strengthen customer loyalty and will enable them to proactively interact with a customer – e. g., by sending push notifications on the vehicle status or upcoming checkups and reminders. If OEMs and NSCs manage to stay as close as possible to the customer, they will create a good basis for remaining the customers’ first choice.

In order to be able to provide this, OEMs, NSCs, dealers and workshops need accurate data driven insights into any customer case to proactively make the right offers and provide a very convenient service both at dealerships and workshops. For accomplishing this, shared access to a common software solution, allowing for managing leads, customers and vehicle data, is a good foundation.

With EASI’R, we solve this by giving all parties a common interface with the platform. Each party can retrieve the relevant customer and vehicle information, including both data delivered by connected cars, data automatically fed in from online interactions with leads and customers and data manually added by sales people and service managers. With our Best Winning Paths capabilities, with data driven, actionable insights, and with highly advanced Conversation & Content enablers, EASI’R helps all parties to manage every lead and customer the best way, always being one step ahead of the customer. To make the usage as easy as possible for the end users, EASI’R can be integrated on top of other solutions like DMS, CRM, lead management and other systems, so that salespeople and service managers can benefit from seamless workflows and do not need to switch between different applications manually anymore.

Interested in hearing more about EASI’R & Aftersales? Get in touch at sales@easir.com or request your free demo at easir.com/en/request-demo

 

Sources:

* McKinsey Center for Future Mobility: Ready for inspection – the Automotive Aftermarket in 2030
** Ernst & Young: Future of automotive retail: Shifting from transactional to customer-centric
***Automotive World: Road safety
**** DAT Report 2018
***** PwC: https://press.pwc.com/News-releases/by-2030–the-transport-sector-will-require-138-million-fewer-cars-in-europe-and-the-us/s/a624f0b2-453d-45a0-9615-f4995aaaa6cb