Evolving aftersales networks will include both ICE and EV vehicles for the foreseeable future.
Although EV market share will continue to grow, service revenue opportunities from ICE vehicles on the road will remain strong for years to come. According to the European Automobile Manufacturers’ Association, Europeans keep their vehicles an average of 12 years. In other words, a new vehicle added to the “family fleet” in 2023 may provide retailer service potential through 2035, on average!
EVs also present unique opportunities for service departments, such as adding services for optimum battery-pack maintenance, and new features through connectivity. A higher number of sophisticated technology components are needed for over-the-air (OTA) connectivity, which means they will experience obsolescence sooner and require software and hardware upgrades to stay on pace with newer models.
Altogether, this indicates that service departments need to prepare by assessing and diversifying their offerings, training their personnel on the new technology and services, and taking any necessary steps to develop action plans for meeting the demands of their EV service customers.
Over time, and as the shift towards EVs continues, service-department data will become even more important to manage and find opportunities in the mix of:
- New types of service required at the retailer – like selling service packages – and service-center levels
- Types of service performed at both retailers and their alternative retail format offerings
- “Right-sizing” service departments for both ICE and EV service traffic
- Tracking when customers are most likely to need service
- Targeting high-potential customers through multichannel service marketing communications
Three critical actions retailers can take for maintaining
a healthy aftersales network
Customers are embracing the idea of online connectivity at the service level for both their ICE and electric vehicles. In fact, almost half of customers in the recent Harris Poll study expect dealers to offer online maintenance scheduling (at 49% in the UK and 48% in Germany) and automated maintenance reminders (at 47% in the UK and 42% in Germany).
Incorporating connectivity technology to develop more targeted campaigns and scheduling more timely service reminders is crucial. The increasingly connected technology in EVs presents a good opportunity for online maintenance scheduling and automated service reminders.
Additionally, tyres represent an excellent opportunity for aftersales revenue in the EV future. That’s because:
- EVs are heavier, produce more torque and rely more heavily on alignment to maintain range and performance
- EV tyres are more expensive, due to the presence of low-rolling characteristics – like specialized rubber, thinner walls and shallower tread blocks that together require less force to make and keep them rolling – and noise reduction features
And add-on services will become crucial for aftersales department success. For example, storage and winter tyre swaps could be revenue generators. Additionally, franchised retailers who are proactive can establish themselves as tyre safety and service experts. Aggressively pursuing EV tyre business will become progressively more important, especially as specialized tyre shops – which don’t require a retailer or service center for sales and installation – jump on the opportunity.
A number of opportunities for retailers exist, as well. One such opportunity is, with EVs in Europe more likely to be bought on lease or through a Salary Sacrifice Scheme (where payments for vehicles, servicing and insurance are bundled together), retailers can seize the opportunity to become the default service provider at the time of purchase to create guaranteed regular revenue streams.
A strategy that embraces online maintenance scheduling, building service and/or tyre packages into ownership bundles and automated reminders for hardware/software upgrades throughout the life of the vehicle could go a long way to ensure that aftersales continues to be a cornerstone of retailer revenue.