Auto Talk at CitNOW Group
Auto Talk at CitNOW Group

Aftersales conversion

Overall conversions across Aftersales remain consistent, with performance for Red eVHC work tracking at 46%, which is just marginally lower than the same month last year, where it tracked at 46.81% conversion, a positive sign especially when you add in that Amber conversion increased 5.5% compared to 2023, now tracking at 9% for April.

Breaking these results down by Volume and Premium vehicles has also given us a different view on performance levels.

Comparing Jan-Apr 2024 to the same period last year, for Volume brands we can see that 44.8% of retailers improved their eVHC red work conversion performance by 1% or more, with 57.3% of retailers conversion levels falling by 1% or more.

For the improved retailers, eVHC conversion increased to an average of 57.5% conversion, an average improvement of 19.7% with the minimum being a 1% improvement, to the top performing retailer trebling last year’s conversion and improving their metric by 319%, moving from 16% conversion up to 68% conversion.

On the flipside the retailers that declined in performance fell from an average of 59% to 47.2% conversion, a decline of 20% on average.

For Premium vehicles, we saw a similar story with 44.4% improving performance and 55.6% falling behind compared to last year.

The improved retailers eVHC conversion increased on average to 53.3% conversion, an average improvement of 24.4%, again with the minimum being a 1% improvement, to the top performing retailer nearly doubling last year’s conversion and improving their metric by 172%, moving from 22% conversion up to 60% conversion.

For retailers that declined in performance they fell from an average of 50% to 40.3% conversion, a fall of 19.4%.

Both these scenarios show conversions can both rise and fall, almost in equal measure. What is needed to focus to drive continual growth year on year, if that was achieved overall conversion would increase considerably.

John Law, Executive Director, CitNOW Insights commented, “Reviewing these numbers it’s interesting to see the change in performance levels for both volume and premium brands, with very similar shifts in performance for both.

The challenge for retailers is not to become complacent and allow performance to drop off, those retailers that can continue to utilise technology and people at the right stage of the eVHC process will continue to deliver the most optimal results and grow year on year.”

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Auto Talk at CitNOW Group
Auto Talk at CitNOW Group

Effective stock management and strategic pricing

Even though Used Car prices have fallen since the start of the year, retailers are still enjoying strong GPPU performance, with average GPPU for April 2024 tracking on average at £1448, which is the virtually the same as the 2023 average GPPU of £1449.   

These GPPU results have been achieved regardless of the decline in used vehicle prices seen across all age ranges.  

Notably some age ranges have seen lower levels of decline in the retail sale price than others with 0-3 age vehicles falling just 1% comparing April 2024 to all of 2023 averages, and a similar 2% decline has been seen for the 4-6 and 7-9 age brackets.  

The biggest loss however has come from the 10+ age bracket, with the average vehicle retail sale price fell from £10,945 down to £8,567, a decline of 22%. 

Retailers that closely manage their stock will of course be the winners in the longer term as they can see the stock that is generating the best margin, from our data we can see that GPPU for 0-3 vehicles has fallen 7% YTD to £1528, but 4-6 vehicles have increased by 6% up to £1292, and 7-9 vehicles have increase their GPPU even more by an average of 11% to £1496. 

Looking at the decline in GPPU for 0-3 age vehicles we can see that on average these vehicles are priced at £26,253 and are taking 62.8 days to sell. These longer sale times, and higher prices may be impacting the customers purchase decision, causing retailers to lower the price to make the sale, impacting the GPPU. 

When you look at the 4-6 age vehicles these are on average 49% cheaper that their 0-3 counter parts and are being sold nearly twice as fast, with average days to sell sitting at 36.9 days. Its easy to understand why any consumer with a set budget will opt for these slightly older vehicles over and above the 0-3 age range.  

One thing to consider however with the sale of older vehicles is the longer-term retention of these customers from an aftersales perspective, as once the used car warranty has expired customers will be open to shop around for the better price for their service. This is something retailers need to consider during the sales process and have in place tools to lock these customers in long term through service plans, or extended warranties. 

John Law, Executive Director, CitNOW Insights commented “These numbers highlight the importance of clear pricing strategies, in a declining market trying to keep the retail sale cost high will only impact the days to sell, it’s a balancing act for retailers but having the right tools in place can make this easier.”

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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.