The dominant theme for the automotive aftermarket of late is “opportunity.”
With so much of the original equipment service network in turmoil, an economy at large that is forcing many consumers to look at their spending (including where they get their cars serviced), and recent very big moves on the Right to Repair front, nobody can deny that some very important shifts are occurring.
Many of these have been well documented, of course. In fact, the difficulties in which some car dealer networks find themselves as a result of their franchisors’ challenges, and what this means for the aftermarket, has become a mantra at industry events. The anticipated windfall for the aftermarket dominates everything from high-profile conferences to the tee-box chatter at the charity golf tournament.
This is as it should be. The aftermarket has felt so disadvantaged for so long that the suggestion it might at last start winning in a big way has to put a smile on your face.
However, the problem with much of the prevailing wisdom is that it fails to address the real complexities of the market.
There is, for example, the fact that a reduction in the car dealer network is often seen as a synonym for closing those facilities. I have seen a number of reports that take the total number of projected closings, factor in how much they generated in service, and then transferred that business directly to the existing aftermarket.
Heck, I’ve probably been guilty of that on occasion and it sounds reasonable, but it does not account for the fact that a dealer losing its franchise may not actually close; it may just become a different kind of dealer. True, most probably will close, but it’s not a given.
If a car dealer decides to hang onto the service business and become a different kind of dealer–used car, different brand, whatever–it might actually ramp up the competition in a local market, not lessen it.
From a consumer standpoint, the equation is no less complex. Even if people are watching their pennies more than ever, there is no guarantee that they will opt to go to the aftermarket. They may actually opt to keep their dollars in their pockets and leave the aftermarket to pick up the pieces when the inevitable succession of breakdowns occurs, a situation which will do little to build confidence in our industry.
Shops will have to turn that “have-to” customer into a “want-to” customer to keep them, and that will take investment in facilities and tools.
This brings me to Right to Repair. With the Right to Repair Bill making its way through the legislative process, and parallel efforts to forge a voluntary agreement, the opportunity for Canadian aftermarket service providers to gain access to any tool they need seems closer than ever. When they do get that access–I don’t believe it’s an “if” anymore–it will be the ability to pay for the opportunity that will determine the aftermarket’s success going forward.
Accordingly, everybody in this business who plans on being around for the inevitable uptick in the market needs to work on his own profit picture, through increased efficiency, appropriate pricing, and quality service, and to understand that those who supply them must do the same.
Resolve to make your business more than a survivor, and to urge your colleagues and your customers to do the same.
It is the only way to take advantage of the opportunities that await us. — Andrew Ross, Publisher and Editor
Headlining July is the Jobber News Jobber of the Year Award, celebrating its 25th Anniversary this year! Plus, building business in Emissions Control Parts, Cooling Systems, Cabin Air Filters, A/C, and more.
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