Are we adapting well enough to our changing industry?

Mechanic using laptop

Members tell us they’re feeling confident about the future. But are we, and our workshops, adapting fast enough to our changing industry to meet that future successfully?

One of the most reassuring findings in Capricorn’s landmark State of the Nation 2020 report was that Members felt overwhelmingly confident about the future of both our business and our industry.

There was a real belief that there will be a strong market for vehicle maintenance and repair for many years to come; that the automotive aftermarket will continue to grow and remain profitable.

Confidence Graph

But many Members also expressed areas of concern. They were worried about changing technology, electric vehicles, increasing competition, and a lack of skills in the job market, and they had various financial and economic concerns.

These Members are right; I agree with them — these are all challenges our industry and our businesses face. We need to rise to meet these challenges, or our businesses risk being left behind.

Which brings me to the question I want to pose today: are we adapting well enough to our changing industry?

What our Members had to say

Firstly, let’s take a quick look at the kinds of challenges Members are facing. These are comments Members made in our State of the Nation survey.

“A rapidly changing industry is hard to keep up with and more people are spending less on car maintenance in our tough economic times.”

“Reliability on cash flow with increasing prices in rent, parts, wages and lower price expectation with customers.”

“I am an engine reconditioner, not a mechanic. Changes over the years have reduced the normal engine service requirements. Wages, etc, are too high, and equipment is too expensive. We rely mainly on race car maintenance and restoration work. Engine reconditioning is a dying trade. Already we have seen a lot close down.”

“Times are getting harder; the trade’s changing, pushing out the little guy.”

“We would rather sell/close the business before the lease runs out next year. Having both come from mining we can earn triple the wages, work half the year and have no headaches.”

“Insurance companies are treating us the same as (big supermarkets) treated the local family-operated corner store. They don’t want us and make life difficult to keep going. We are slowly all walking away. There will no longer be small independent panel shops. It’s time to retire and no-one will want to take over, even if I were to give it away.”

We need to tackle disruption with adaptation

Taken together, those comments are a bit overwhelming. Perhaps even depressing. But remember again, the vast majority of Members still felt confident about the future.

However, disruption is still coming. In our industry disruptive change could mean a future that includes everything from EVs, AVs, connected cars and ride sharing, to subscription models replacing car ownership completely.

So how do we succeed in a disrupted environment? We need to adapt to the new and disruptive trends — including the ones that are already here and clear, the ones we can anticipate, and the ones that take us by surprise.

There’s a reason people use the expression “disrupt or be disrupted”: unless you’re constantly innovating, you and your business are going to be left behind.

My big tip for success in this new environment: know your customer.

No matter what disruption is going on, we should never lose sight of our focus on the customer. And if we’re going to innovate, we need to innovate in a way that our customers care about — otherwise we really will be left behind.

Let’s tackle some obvious areas of change.

Digitalisation of the car

The technology we see in cars is changing at lightning speed. Workshops need to keep up.

The digitalisation of the car will require highly trained and skilled technicians, so workshops will need to consider how they are going to:

  • Identify and attract this talent
  • Retain high-quality people.

To meet this future, more investment in training will be required. It’s also going to take ongoing investment in specialised tools and diagnostic equipment.

Of course, all of this is expensive. Which is why I honestly believe the future for workshops is specialisation. Continued digitalisation and vehicle complexity are really going to make it impossible to be a generalist repairer (unless you have really deep pockets). Adapting successfully may well mean your workshop focusing only on certain vehicle brands.

Removing friction from the customer experience

Your customers are the secret to a thriving business. If they’re happy, then they keep coming back and they recommend your workshop to their friends and family. But customer expectations are changing and we need to keep up.

These days customers are used to making everything from medical appointments to dinner reservations online. Car owners want the same.

Embracing the potential of digital platforms

While we’re talking about customers, staying connected to them has never been more important than it is right now.

You need to be marketing your business through social media, sending email newsletters and SMS messages, and generally reminding your customers that you’re there to help.

Customers are looking online for information and reassurance before they buy. Is your website informative, intuitive and useful? Are you encouraging your customers to leave Google Reviews and other online reviews, to help other customers to choose you?

Digital platforms will change the way automotive businesses will operate in the future. You can read more about how to embrace their potential here.

Being prepared for the future, even when you’re no longer a part of it

Lastly, a gentle reminder that the future is coming whether you’re prepared for it or not.

If you haven’t already done so (and State of the Nation told us many haven’t) then family-owned workshops need to begin developing a succession plan now. This is true at any stage of life but especially if you are planning to retire within the next five to ten years.

Succession planning gives the next generation a stake in the future of the business. It changes the conversation about investment, keeping up with technology and training, and embracing the changes and challenges ahead.

(We’ve written about succession planning in depth over here, so check that out if you’d like to know more.)

Never forget, we’re stronger together

Netflix Chief Executive Reed Hastings once said: “Companies rarely die from moving too fast, but they frequently die from moving too slow”.

This is the risk we face if we don’t adapt quickly enough to the changes we face.

Don’t be the one who stands back and watches change happen. Don’t be the one who looks back and asks “what happened?” Be someone who makes things happen. Be in control of your own destiny.

Disruption won’t happen overnight or with a big bang. It will happen in small, incremental steps over the next decade and beyond. But now is the time to think about what you can or should be doing to prepare for it.

Start by falling in love with your customers and planning for your future. Even small change is better than none.

As you start that journey, it’s worth remembering you don’t have to tackle those challenges on your own. As a cooperative, Capricorn has been right there alongside Members, working to improve your workshops’ success, for more than 40 years. 

I am confident Capricorn can do more to help our Members keep up with some of the challenges we all face.

Other challenges, of course, will require an “all of industry” approach — one where all stakeholders must work more collaboratively if we’re to solve them. You can guarantee Capricorn will be right there, with a seat at the table, helping to meet those challenges, too.

Get a free copy of State of the Nation 2020.

This article was published 28/04/2021 and the content is current as at the date of publication.