Business practices have not kept up with the way the automotive aftermarket has changed since the pandemic, with much of the pressure forced down onto repairers.
That was the view of Ruth Moring-Beale, National Sales Director, Morelli, who was speaking during a the ARC360 webinARC examining business strategies and best practices.
She suggested that many of the challenges impacting repairers today could be softened if not alleviated completely if work providers adapted their business practices. For example, she said that cash-flow is now one of single biggest concerns for bodyshops but that could be eradicated if repairs and/or parts were paid for in advance.
She said, “A lot of current problems among repairers is because business practice is lagging behind. For example, blue chip companies are putting the cashflow onus on businesses that are still recovering from the pandemic. We’re going to lose those businesses if we keep doing that, so the industry has to look at itself and change.”
Flexibility
Moring-Beale was joined on the panel by Neil Marcus, Marketing Director, Selsia Vehicle Accident Centres, and Garry Bloom, Senior Operations Manager, Davies Group, both of whom said that if nothing else the pandemic had emphasised the need for flexibility in the way we work.
Marcus said, “Covid-19 taught us that nothing stays the same and you have to adapt. In terms of your strategy, you need to know where you want to go and how you are going to get there.”
He admitted that it is difficult to remain on course when there are challenging external factors impacting almost every facet of the business – but said changing course is sometimes the better options.
“There is a perfect storm of things you can’t control at the moment. People are working from home more now, there is a shortage of HGV drivers, energy costs and labour rates are rising. The smaller the business the easier it is to adapt, but you must be prepared to do that sometimes. There is no shame in changing direction.”
Technology
Technology has actually created more options for businesses seeking change, either in the way they do business or what business they do.
Marcus said that among the most significant changes implemented by Selsia was a shift toward digitalisation, which has added resilience and cohesion to the network.
He said, “A lot of our systems are now cloud-based, which means we’re in a better position to communicate with our bodyshops and talk in a single voice. We are now working more as a single unit with a common service level.”
Bloom said that Davies Group is also making better use of technology post Covid, estimating that a 15-year evolution had been compressed into a matter of months. He identified communication as the single-biggest area of change, and said that only through greater communication both internally and externally would the sector find a way through its current challenges.
He said, “Everyone is in the same boat now so communication has become the most important thing. We need to have the conversations we’d not have had a few years ago and with the people we might not have had them with – that means suppliers, customers and competitors.
“We need to manage expectations because there are only a certain number of parts and only a certain number of jobs repairers can do. We’re in such a competitive market but need to be upfront and honest and admit there are delays and they are out of our control. Parts supply is a big issue and we haven’t got a timeline for when it will return to normal. It could be well into 2024 before it calms down. We don’t know. Everyone wants certainty, but we can’t give it to them at the moment.”
Electrification
Another influence on business strategy is the technology within cars, with electric vehicles joining the UK car parc faster than anyone would have predicted just a few years ago. As such, there has been a dramatic surge in electrification investment from all sectors.
But while that might appear now like an obvious business strategy, some are urging caution before tying up their futures in the technology.
Marcus warned that in the short-term it was unlikely that workshops would get enough EV jobs to make considerable investment in equipment and tooling pay off, an opinion which Bloom supported.
“The unknown factor is how many jobs investment in EV equipment will deliver,” he said.
Meanwhile, Moring-Beale went even further and wondered if hydrogen technology would not prove to be more viable in the long-term. She described electrification as a ‘flawed technology’ as long as the infrastructure is not in place to support widescale adoption. She said public charging stations were too few and too slow, and home charging options were impractical considering many people live in flats or terraced houses.
Bloom concluded, “We need to keep challenging the norm, whatever that is. But we need to do it together. Working in silos isn’t going to work.”
ARC360 would like to thank its Corporate Partners Solera Audatex, BASF, BMS, CAPS, Copart, Emacs, Entegral, Enterprise Rent-A-Car, Innovation Group, Mirka, Nationwide Vehicle Recovery Assistance, S&G Response, and Sherwin Williams as well as Partners asTech, The Green Parts Specialist, Indasa and Prasco, and Associate Partners Gemini, Thatcham Research and Trend Tracker.
