Posted on: 25 Jun 2024 | Post By: CitNOW Group
Growing your aftermarket opportunities as owners hold on to cars for longer
Rising age of cars on UK roads
In 2023 the number of cars on UK roads hit 35.7 million, according to the annual Motorparc survey by the Society of Motor Manufacturers and Traders (SMMT). This marked a 1.6% year-on-year increase, equating to over 546,000 additional units.
While the increase was undoubtedly driven by the post-pandemic easing of supply chain constraints, helping drive an 18% jump in new car registrations in 2023, it also reflected the increased lifespan of many cars due to improved build quality.
Consequently, British motorists now keep their cars for longer than ever with the average age of cars being driven today increasing to nine years old, more than 12 months older than they were in 2019.
This SMMT data offers a revealing insight into the age bands of cars currently in use:
- Under 3 years old 14.4%
- 3-6 years old 17.1%
- 7-9 years old 20.7%
- 10-12 years old 17.1%
- 12+ years old 30.7%
In its analysis of the 2023 car parc, Mintel, the independent research firm, estimated that consumer spending in the UK aftermarket exceeded £17 billion.
All this data illustrates just how sizeable the opportunities are for franchised retailers to grow their aftersales revenues by retaining a greater share of the servicing, maintenance and repair work of the new and used cars they sell, especially for those who actively target a greater proportion of out of warranty cars.
Q1 2024 eVHC trends
Our RTC REALaftersales data shows how franchised retailers performed during Q1 2024 compared to Q1 2023 and identifies where new opportunities may exist.
In 2024 the average time spent per eVHC increased by 7.1% to 16.59 minutes per job, up from 15.48 minutes in Q1 2023. However, this extra time did not translate into additional red opportunities, with red items being identified as part of the eVHC falling by 2.6%. In 2023, 54.2% of all eVHCs had one or more red items identified; in 2024 this has dipped to 52.8%.
Last year’s increased availability of newer used car stock, aged 0-3 years old, was an influencing factor; these newer vehicles coming into circulation and subsequently back in for service needed fewer repairs.
So, retailers looking to maximise red work will find more opportunities in older, mostly out of warranty, vehicles.
Retailers did see an increase in the average value per job in Q1 2024, up 1.9% to £308.42 per eVHC, with an average of £141.87 of that being successfully converted. However, for the average retailer this equated to £127,945 being left unconverted in Q1 alone, presenting aftersales teams with a chance to maximise on missed opportunities during the second half of the year.
Workshop utilisation monitoring
Our data shows how opportunities to deliver improved aftersales performance do exist by monitoring and benchmarking workshop operations.
When breaking down the main repair segments there are opportunities for retailers to review their data and put action plans in place to improve conversions.
For example, conversions of red work identified brakes across our data set range from some retailers performing at 31% conversion up to 71% for others; tyres from 18% conversion up to 49%; and engine repairs varying from 41% conversion up to 74%.
By being able to see which segments you are poor at converting can lead to opportunities for training and support, or new KPIs being created to drive real focus on areas that have large revenue opportunities and margin.
Identifying areas of improvement and missed opportunities
We recognise that workshops are busy environments and navigating through data can be overwhelming. This is why automating processes to identify areas of improvement and missed opportunities is so important.
Using Business Intelligence CitNOW Insights empowers retailers to stay ahead.
Designed to consolidate key information into a centralised hub accessible to all business units and locations, CitNOW Insights provides actionable insights directly to your team, empowering swift decision-making, boosting profitability and delivering continuous improvement.
CitNOW Insights simplifies the workshop management process through a range of targeted dashboards. Gaining instant access to critical data, insights and trends in a matter of seconds all presented consistently to your entire team.
The power of personalised eVHCs
CitNOW has been at the forefront of eVHCs for over a decade. We recognise their importance in building trust with customers, while increasing workshop conversions.
CitNOW Workshop takes the customer digitally to the heart of your workshop and allows the technician to show them the work needed on their vehicle while it is still on the ramp. This means the customer can quickly understand what work is required.
A 60-second video can break down perceptions and stereotypes and put the customer in control. Purely factual, without confusion or jargon, customers are empowered to make decisions because they see what the issues are. With quicker decisions comes less wasted time, more efficient workshops and better customer satisfaction scores.
CitNOW Workshop can help generate a measurable increase in red and amber work conversions.
Adding pre-diagnosis to the mix
Identifying red and amber work while you have a vehicle in your workshop is not the only way to build aftersales efficiencies.
CitNOW Triage, is a powerful pre-diagnostic customer communication service, that allows your customers to remotely capture video and photographic evidence of any issues they are experiencing with their vehicle and empowers your Service Advisors to triage the identified issues prior to scheduling or prioritising the daily workload.
CitNOW Triage saves you time and money in ramp utilisation, enabling you to order parts in advance, increase your first-time fix rates and increase your customer satisfaction scores.
Discover more about how CitNOW Insights, CitNOW Workshop and CitNOW Triage can maximise the aftersales opportunities that exist to deliver customer satisfaction and grow your workshop revenues.