Aftermarket revenues could fall as EV numbers rise
Aftermarket revenues could shrink significantly as the UK car parc moves towards electrification.
Fleet Assist has released new analysis of ICE versus EV service costs and found that minor service parts are 18% lower for EVs than for an equivalent petrol or diesel model, while fluids are 70% lower.
When it comes to major services, parts and fluids averaged 58% and 63% lower for EVs than petrols and diesels.
The prospect of lower revenues comes at a time when the aftermarket is already facing severe challenges caused by higher wages and energy costs as well as increased demand for investment in tooling and equipment to keep pace with modern technologies.
Profit warnings
Nikos Kotrozos, supply chain director at Fleet Assist, said: “With a background of profit warnings from franchised garages, the fleet industry’s aftersales SMR fulfilment will continue the paradigm shift that is underway.
“The possibility of introducing smart pricing for services such as delivery and collection in exchange for a reduction in other fees could be one way of maintaining revenue and margins whilst not diluting customer service.
“The trends and future SMR forecasts highlight the requirements for garages to embrace and invest in new technology-led solutions ranging from vehicle diagnostic upgrades to parts ordering systems.
“Deciding where to make the right investment for the long term is key, the promise of AI solutions will not replace the technician, neither will short term pricing advantages from new solutions solve the challenges. Informed strategic decisions such as introducing mobile service units which are gaining popularity is a good example of how the market is transitioning.
“The goal to optimise the experience for customers whilst delivering the highest compliance levels remain key to managing drivers’ expectations and costs.”
