The automotive industry is currently undergoing a significant shift from traditional fossil fuel-dependent vehicles to battery electric vehicles (BEVs). This monumental transition presents key challenges and opportunities for original equipment manufacturers (OEMs), importers as well as workshop owners and their automotive aftersales business. After all, BEVs require less maintenance and service than their internal combustion engine (ICE) counterparts, and the rapidly growing demand for BEVs has brought new players to the market, particularly from China. The resulting shift in the regional distribution of the global car parc means fewer serviceable vehicles for established OEMs, putting their market position and their profitability under serious pressure – unless they respond quickly.
As the market moves towards electric mobility, we can expect dramatic changes in the dynamics of aftersales service and the revenue streams for OEMs and workshops. There are two key points to consider: First, BEVs require significantly less service and maintenance than traditional ICE vehicles, which has the potential to drastically reduce service and repair revenues. In terms of revenue per vehicle, we forecast a 30-45% decline for authorized workshops and a 20-30% decline for the parts trade. And secondly, the growth of the global car parc provides an opportunity for new players to enter and disrupt the market. We expect Chinese manufacturers to produce 50% of all BEVs sold globally by 2026, potentially reducing the established OEMs' share of the car parc and the total number of serviceable vehicles.
Given these threats, it is vital that OEMs evolve their customer retention strategies. Traditional customer loyalty strategies based on regular servicing and repairs won't be as effective in the future because BEVs require less maintenance. As a result, OEMs are under pressure to innovate their service models and make customer satisfaction a top priority in the future. Ultimately, the BEV transition will lead to a shift in five key aftersales segments:
OEMs could consider some of the following approaches:
OEMs can also explore business models focused on circular economy principles. Batteries, as the key component of BEVs, have the potential to create new revenue streams through remanufacturing, reuse and recycling while also promoting sustainability. These are just some examples:
In conclusion, while the shift to BEVs poses certain challenges for OEMs and their authorized workshops, it can also open exciting opportunities for innovative business models and sustainable practices. Adapting to these changes and finding a strategy that strikes the right balance between profitability and sustainability will be the key to continued success in the evolving automotive landscape.
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