Who doesn’t love the look, feel and smell of new equipment? But that’s superficial – what really matters is that new equipment means you are staying up with, or perhaps getting ahead of, the game and the result of that must mean greater efficiency and profit.
Repair and diagnostic equipment is the lifeblood of every automotive repair workshop. Age, wear and tear, and taking advantage of new equipment capabilities to increase productivity mean that shops must routinely consider when it’s time to expand and upgrade.
Survival into the next five to ten years will warrant investment in tools, equipment and training. Those who don’t commit to this investment will struggle to survive.
Any statistics you read about car ownership in Australia are flashing green lights for the auto aftermarket and the repair workshops that are gearing up for it. In January this year, just under 80,000 new cars were sold, and that is 11 percent higher than January 2020. The COVID-19 lockdown had a lot to do with the built-up demand.
It’s not just the number of vehicles, but the range of makes that workshops are expected to cope with. On top of that, each make has its own technology profile. The vehicles now finding their way into the aftermarket workshops (yes, cars still need servicing and still break down) are full of specialised and sophisticated electronics.
To efficiently diagnose and repair these vehicles will require the purchase of new tools and equipment, with training on top to teach staff how to use them.
The response to the common complaint ‘I can’t afford it’, can only be ‘Can you afford not to?’
Take the humble scan tool. Many workshop owners bought one of the first scan tools on the market more than 15 years ago, and that was considered a huge expense at more than $10,000. To offset this investment, we highlighted that it is important to factor these costs into your charging structure. If, after a few years the scan tool was paid offdoing this helped to purchase a second scan tool, then the cycle continued. In most workshops, this includes a relatively small fee charged out on diagnostic invoices paid for the latest tools, plus regular updates.
The other essential tool for today’s workshop is data or information, and reliable data costs money. A data fee is often applied by workshops on invoices where data additional to the workshop’s knowledge is needed to complete the repair.
If properly applied, the data fee should cover the outlay, as well as generating a profit – reinforcing the term ‘investment’. Any investment in a workshop should deliver a profit. Once that is understood, there should be little hesitation about investing in new tools and equipment.
In view of the rapidly escalating technologies being introduced into new vehicles, workshop owners need to start planning in some detail for the next five or ten years. This could involve decisions on where you want to be in the market. Is yours going to be the workshop that customers trust to serve and repair their late model vehicles, or do you stay in the ‘grease and oil change’ group?
Many studies have shown that the average motor vehicle owner prefers a workshop that can not only service their vehicle but repair it when something goes wrong. In many situations where a workshop has to turn away a customer because of a lack of tools or equipment, that customer is most likely never to return.
Before making any decision on what tools or equipment to purchase, or what training to undertake, ask around of fellow technicians and Capricorn Members. Find out what they use, what works, and what doesn’t. Network knowledge and experience are still the best research you can find, so if you are in a network, use it. You won’t regret it.
When considering your next piece of equipment, consider this – does it allow a technician to analyse and diagnose a problem vehicle in a non-intrusive way? Workshops should strive to develop techniques and processes using the latest tools and equipment to undertake as much testing and diagnostics as possible without pulling anything apart. Those who can change and follow this concept will benefit the most.
Without new equipment, workshops cannot take advantage of modern techniques and processes. Innovations such as being able to live-remote to another similar tool is but one example of diagnostic-tool evolution. It allows a technician to communicate with a technician in another shop for advice.
Regardless of the type of automotive tool, after a technician understands the tool, software should be updated monthly for current vehicle coverage.
Workshops need to understand that all electronics have a lifespan. A diagnostic tool is a viable money maker for a finite number of years. Scan and diagnostic tools are continually evolving, increasingly sophisticated and easier to use. Updating hardware or software is a must to stay competitive.
Other innovations in diagnostic tools allow remote access to a customer’s vehicle for full scan and diagnostics, reporting back on faults and suggested repairs. These tools continue to evolve with ever-expanding capabilities.
If you are looking to invest in some new equipment, Capricorn Members have easy access to a range of stress-free finance options to help their business grow. Capricorn are committed to putting our Members first, Capricorn Finance offers easy and convenient finance options for investment in new equipment and repayment terms up to 60 months on finance over $2,500. For more information, on Capricorn Finance options, click here.
Once you decide to invest in tools, equipment and training, don’t forget to tell your customers about your latest investment. They need to be reassured that you are the best workshop for them and that you are able not only to service their vehicle but also to look after it when a problem arises.
So get ready for the next decade. It’s going to be a great ride for those with the tools, equipment and know-how.
This article is of a general nature only and does not take into account your particular needs or circumstances. It does not, nor is it intended to, constitute financial or other independent professional advice. Please consult your professional adviser before relying on any information contained herein.
AU: Capricorn Finance offers business equipment finance through Capricorn Society Limited (ACN 008 347 313) and brokers business finance through Capricorn Society Financial Services Pty Ltd (ACN 129 134 667). Fees and charges, terms and conditions, and lending criteria apply.
NZ: Capricorn Finance offers business equipment finance through Capricorn Society Limited (NZBN 9429038593185). Fees & charges, terms & conditions and lending criteria apply.