The Future of the Car Servicing Industry Post COVID19

The Future of the Car Servicing Industry Post COVID19
Sean Buckley, Executive Director – Ultra Tune Australia Pty. Ltd

– by Sean Buckley (Executive Director – Ultra Tune Australia Pty. Ltd.)

There’s no doubt that COVID19 has impacted all aspects of business globally.

The aftermarket automotive servicing industry isn’t any different. At its peak of restrictions there was approximately a 30% downturn in our business across Australia.

Thankfully “car servicing” was deemed an “essential service” which, to some extent, has insulated Ultra Tune and similar businesses against the full impact of the pandemic.

Now, as business starts to return to the new “COVID normal”, we have witnessed a significant increase in business across the sector. Indeed, year on year, month on month, in various regions, Ultra Tune franchises has experienced their best months on record. I believe this reflects the era in which we now live, and this has (and will continue) to occur(ed) for the following reasons:

  • People are reticent to use public transport for fear of becoming infected with the COVID virus. Using their own cars provides a degree of certainty and safety. As such they want to keep their vehicles functioning well.
  • Borders are closed, people are unable to travel interstate or internationally for business and/or holidays. Consequently, they are investing in keeping their motor vehicles in tip top running condition so they can take motoring holidays and weekends away in their own States.
  • With many people having been financially impacted by the pandemic, the sale of second hand vs. brand new cars, has soared. Consequently, dealerships (of new cars) are struggling to attract vehicles for routine services. Ultra Tune for example is about 30% cheaper for the same service as a dealership. With money being tight, we’re an ideal servicing/repair option.
  • Further to the previous point, after sales service providers such as Ultra Tune specialize in vehicles that are 5 years of age or older. With the upsurge of purchases of second-hand vehicles such as this – that are out of dealership warranties – we expect to see a corresponding increase in servicing and repair opportunities. This is already coming to fruition – Ultra Tune, even during the pandemic period, has seen an increase of some 12-15 stores in the franchise network. Now sitting at approximately 270 stores across the country, over the next 18-24 months projections indicate Ultra Tune will be closer to 300 stores by 2022/2023.

Expected technological changes in the automobile industry.

Like any facet of society today: “Data is king”.

Motor vehicles are, ostensively, computers on wheels”. At Ultra Tune we consider ourselves an IT company that just happens to service cars. As such we have invested heavily in our own purpose built IT platform that provides an end to end service for; (i) our customers (e.g. Recording pertinent servicing information about their vehicles, providing automated reminders that their service is due, etc.), (ii) our franchisees (e.g. Providing integrated online parts ordering for preferred suppliers at the click of a mouse, POS and invoicing and local marketing collateral) as well as our National Support Office (e.g. Seamless reporting capabilities across the network, central billing for Fleet customers) and a whole lot more.

We believe what we have created is a world leading automotive administration platform, so, in addition to disseminating the application across our network for the benefit of our franchisees, our intent is to white-label the platform and sell the application globally to similar companies providing yet another income stream back to Ultra Tune Australia Pty. Ltd. from a completely, as yet, untapped sphere.

As mentioned in my previous reply to the  “Future of the Automotive Service Industry Post COVID19” question; as I anticipate significant growth in this sphere, a comprehensively built IT application such as this will be crucial going forward business in this (and related) fields. Indeed, I believe our IT development division could well become as significant as our car servicing division.

Changes in leadership roles and responsibilities for the new normal.

The new COVID normal will be an ever-evolving reality.

Life as we have known it previously has certainly changed forever and I personally can’t see us returning to any semblance of pre-COVID normality until a viable vaccine is identified, tested, proven and rolled out globally. Even then, the valuable experiences we’ve gained during the current period of COVID lockdown(s) around the world have proven most valuable.

For example, teleconferencing has become the new norm and I believe in the vast number of cases much of the business related travel we used to undertake can now be superseded by teleconferencing largely eliminating the time and financial costs of attended interstate/international meetings. Sure, there are instances (e.g. Large-scale conferences and tradeshows) were travel will still be necessary, however this COVID period has clearly indicated there are “different ways” in which to conduct business.

Additionally, Ultra Tune quickly realized that “sanitation services” will be with us well into the future. As such we introduced a new vehicle sanitation program whereby private and fleet customers can have their vehicles completely sanitized with a world leading, non-toxic disinfectant within 3 minutes, killing 99.999% of COVID19 and other potentially dangerous viruses and bacteria. Not only did this “new COVID normal” provide the Ultra Tune network with a new income stream, it also positioned the network to provide the broader Australian community with a much needed, valuable service.

At Ultra Tune, the COVID19 pandemic has necessitated /stimulated our executive team time to rethink our business model and “think outside the square”. That has resulted in the bolstering of our IT department, the instigation of a new, internationally based labour hire company designed to deliver expert, overseas trained mechanics to both the Ultra Tune network as well as – for a lucrative fee back to Ultra Tune – to our competitors, creating yet another income stream.

In today’s modern era if a company stands still it is actually going backwards. Here at Ultra Tune, since the inception of the company more than 40 years ago, we’ve made every attempt to read the trends and stay one step ahead of them.

COVID has provided a unique opportunity to do just this.

If anything, COVID has accelerated a number of predictions we’d previously made about directions the aftermarket automotive service industry is/was heading and bought forward some of the innovations and changes we’d envisaged having to make anyway over the next 5 years.

A number of smaller, independent operators have been forced out of business and the industry is consolidating/rationalizing. In the near future, I believe the independent aftermarket auto-service market will be dominated by 2 or 3 major national networks. Ultra Tune is well positioned to be one of those key players.