REALTIME Communications’ latest White Paper highlights challenges now materialising for the UK’s aftersales teams, calling for retailers to set a new course to create the future aftersales model.
What is clear is that the challenges now in play are not temporary. Alistair Jeff, Commercial Director, REALtime Communications, said: “The downward trajectory for aftersales has been well mapped out for some time. We see this forecast materialising rapidly now as the under 3-year old car parc shrinks.
“The cost-of-living crisis is accelerating the situation and an inability by many retailers to convert the growing audience of used car buyers and older car drivers into workshop profit in sufficient volume. While our benchmarking service reveals pockets of strong performance, the overall average numbers are stark.”
Jeff highlighted three KPIs that reveal the scale of the challenge
- Average Net Profit in Aftersales teams in H1 2022 compared to H1 2021 fell by 14%.
- In H1 2022, £249 million in Red Work was identified, a 12.3% increase on the preceding year, equal to an additional £27.3 million in other service revenue opportunities. However, overall, Red Conversion fell by 2.79%year-on-year to 50.68%. The position was similar for amber work, with overall conversion falling to just 10.3%.
- Falling absorption – H1 absorption fell to 59% from 70% in H1 2021
A recent report from Hertz, which ordered 100,000 Tesla Model 3’s in October 2021, that their BEVs are proving to be 50% cheaper to maintain than their ICE equivalents, only adds to Jeff’s call for positive change.
He added: “Having started my career in a dealership, highlighting the outlook if we do not act now, gives me no pleasure. However, by adapting embracing fresh thinking, optimising QA standards and by developing a broader holistic, dealer-wide, customer journey model, the potential for positive change is very definitely available.”
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