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SEWELLS BEST PRACTICE
Take up the aftersales opportunity

What an important year 2002 turned out to be for aftersales. The renewal of block exemption on October 1 radically restructured the way aftersales could be delivered to customers in the future.

I say 'could', because I am not convinced that too much will change – at least in the next 12 months. In theory, the aftermarket is now unbundled from new car sales, and independent garage workshops are able to compete directly with franchised dealers. Indeed, independent garages can become 'authorised repairers' for vehicle manufacturers.

So why will nothing change? Because it is hard to see why the majority of independent garages would want to become authorised repairers. The investment required to meet carmakers' standards will be considerable, and they will lose some of their independence. It is also hard to see independent garages making the running and applying in droves to become authorised repairers.

It is much more likely that carmakers will seek out a few good independent garages to increase the reach of their networks.

Clearly this does not mean that franchised dealers should be complacent about aftersales. Complacency in the past saw franchised dealers lose huge chunks of aftersales business to independents and fast-fits.

It must be tempting for franchised dealers to rest on their aftersales' laurels. According to RL Polk & Co, the car parc up to three years old stands at a record high of 7.22 million – up 3.6 per cent on a year ago. This sector, most of which is in warranty, is the traditional focus for franchised dealers. The growth has secured franchised dealers' aftersales profits, and protected them from the pain of extended service intervals and reduced content.

Looking forward to 2003, I believe franchised dealers have an aftersales opportunity courtesy of block exemption and the record three-year car parc. There is now nothing to stop them expanding their service and repair operations, and they too can apply to become authorised repairers away from their main site. On top of that, the record three-year car parc is their chance to improve customer retention for sales and aftersales. Franchised dealers should see 2003 as the golden opportunity to place aftersales at the core of their customer retention and profit strategies. It's time to get serious.

As for parts sales, it is hard to imagine that non-OE parts will make significant inroads in 2003 despite the changes to block exemption. But, again, franchised dealers and carmakers must not be complacent.

Finally, what about bodyshops in 2003? Until the Office of Fair Trading reports on the submission by the Body Repair Industry Campaign, I must advise a hold on bodyshop investment – unless you can secure a significant rise in insurance labour rates, of course.

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