Whether digitalisation, alternative drives, connectivity or autonomous driving - new mobility concepts have long been a major part of the news in the automotive sector. But how does it affect the after-sales sector, a market with good profit potential? It is therefore worth taking a closer look at this business segment:
The automotive industry is facing major changes. Megatrends like digitalisation, connectivity, alternative drives, mobility-as-a-service and autonomous driving provide for intense discussions. The many articles on these topics reflect this, though the focus is often set on the production and sales sectors. It goes without saying that the after-sales business will also be affected by these new developments. Nevertheless, the aftermarket is especially noteworthy if you look at how much revenue it generates on its own. In fact, it even accounts for nearly half the profit in certain cases. This influence should not be underestimated. Consequently, the latest trends and changes may have a significant impact on after-sales turnover and thus on overall profit. The question is: will this impact be beneficial or disadvantageous? What are potential risks and where do opportunities lie?
Alternative drives and mobility affect traditional revenue streams
Fuelled by the many debates on environmental and sustainability issues, more and more vehicles with alternative drive systems are being launched onto the market. This leads to a drawback for after-sales operations, since fewer components have to be installed for alternative drives such as electric motors. For example, they do not need starters, tail pipes or fuel tanks and are wear resistant, which in turn reduces the necessity for parts sales and upgrades as well as maintenance and repair services. New technologies such as improved assistance systems up to completely autonomous vehicles will further intensify this situation, since they aim to reduce accident rates.
Another factor will bring additional fluctuation: new mobility concepts. New strategies such as vehicle-sharing and mobility-as-a-service will greatly increase the concentration of shared vehicles on the roads as well as their usage, while the demand for individual private vehicles will decrease. If more consumers choose new means of transportation instead of their own car, fleet customers must be approached increasingly with regard to the aftermarket in order to compensate for any losses. This "consolidation of the customer landscape" will "give[s] them stronger negotiating power", as the 2019 Deloitte study "Future of Sales and Aftersales" accurately predicts.
Interconnected data increases targeting accuracy
A lot of new influences have emerged. But where there are risks, there is also potential. Digitalisation in particular presents an important advantage. Thanks to networking based on digitalisation measures, customers, vehicles, service requirements, workshop locations and parts logistics can be connected in a new way. Using centralised information across the entire aftermarket chain, predictions about customer behaviour, inventory, parc and potential risks will be much easier. Service locations will be able to address customers in a more personalised and demand-oriented way and to proactively attract them to their services. In combination with multiple channels, customers can be provided with more specific service information at the relevant touchpoint. This targeted approach to customer care enables manufacturers to retain their customers for longer. It boosts loyalty and allows for better exploitation of the after-sales potential. It may therefore be a good countermeasure against falling margins.
Gaining market insights
Clearly, a considerable transformation of the service business is on its way. It will be more important than ever to understand current and upcoming market changes to remain competitive. The fact is that companies need to secure their business for the future, but there is no pre-set way to do this. Each manufacturer, dealer and workshop needs a different strategy to adapt to current changes. But how to identify the most suitable course of action if nobody really knows where the journey is headed?
Having the right data at hand is a sound approach, since the use of centralised data can offer major possibilities. For the most effective insights, it is essential to collect, standardise and reference operational service data as globally as possible. For example, it can provide the necessary clues to recognise the distribution and shifting of potentials in time. Abstract concepts such as customer loyalty become measurable and, together with service history and probability for repair necessity, enable companies to address customers individually. The success of marketing and sales methods will be visible at once.
It is important to know early on which questions to ask about one's own market situation. Only the right questions lead to the right solutions. Thus, structured data of high quality serve as a basis for answering tomorrow's questions. The combination of available technology for data analysis and professional after-sales know-how provides market insights that lead to action plans. In this way, corporate goals can be pursued proactively.