There will be an increase in large multi-franchised service centres within the decade, as vehicle manufacturers need fewer sales points, Steve Young, the International Car Distribution Programme’s managing director, told this year’s AM Aftersales Conference.
Young said: “If we talk about the franchised networks celebrating for a moment, the rest of Europe is still feeling the pain in terms of sales – we shouldn’t live in our little UK bubble and think networks are ok and stable.”
The aftersales market is in decline in general, Young said, caused by lower driving distances and better cars.
“There will be a reduction in the number of dealerships and changes to the format of dealerships – the way you build your business back up again in aftersales is to rely on multi-brand coverage.
“Arnold Clark, in particular, has done an amazing job of building up its tyre business, rather than letting it go to the fast-fits/independents.”
One of the things Young said dealers could expect in the aftersales market is manufacturer-sponsored insurance: “we haven’t seen the full impact of it yet, but manufacturers will become the bill payer for a lot more of the franchised dealer’s work, and that’s something which I think dealers need to approach with some caution”.
Another coming trend is telematics, said Young, and dealers shouldn’t wait for manufacturer partners to do it.
“An Italian dealer group is putting a telematics module in every car they sell. Customers then choose to pay for an upgraded version to help their insurance costs. Over half of drivers we spoke to, with cars up to eight years old, would value having remote diagnostics on their car.
“For a £100 initial outlay and £15 a year after that, they’re expecting payback on servicing across three years,” Young added.
A 2014 ICDP survey showed 52% of consumers would be interested in a remote monitoring system to enable dealers to identify a fault.