Future-proofed: Training technicians for the long-term While experience in the day-to-day activities of a workshop is vital in building a technician’s knowledge and skills, it is only one piece of the puzzle. For example, a technician who has been servicing solely petrol and diesel vehicles for the past 15 years will unlikely be able to help a customer with a hybrid or electric vehicle. What’s more, given the safety concerns involved, it would be dangerous for them to try. What about servicing the latest safety-critical systems, like ADAS? Certainly not a worthwhile risk without the appropriate knowledge or equipment.
Systematic training in new technologies is, therefore, the best way to ensure a workshop will continue to successfully serve aftermarket customers, even in times of rapid change.
“The Auto Education Academy portal from Euro Car Parts brings IMI-approved online and practical courses together with a database of over 500,000 resolved technical queries, with an average of 600 new repairs added daily,” observed Adam White, Workshop Solutions Director at Euro Car Parts. “It provides technicians with one of the largest technical training and knowledge resources in the independent aftermarket.”
“Training is an integral part of ongoing success in this industry,” continued Adam. “It allows technicians to further their career and workshop owners to develop a highly-skilled team of professionals.”
While many would agree to education’s importance in principle, it can be difficult to carry out a training plan and accept lost revenue in the short-term. Online learning can provide the flexibility to bridge that gap.
“Repairers can login to their own skills portal to view the content of more than 75 different courses, registering and booking their place on training workshops all over the country at the click of a button,” said Adam. “They can also assess their strengths and identify weaknesses in nine key areas: Petrol engines, diesel engines, engine management and emissions, vehicle electronics, hybrid and electric cars, brakes, powertrain, tyres, steering and suspension, as well as air-conditioning.
“Results are automatically added to an interactive skills diagram, illustrating a repairer’s current skillset and enabling them to set their own training and development targets. Where gaps exist, the learner management system intuitively recommends Auto Education courses that can help increase knowledge in those areas.”
Invaluable
“The platform has been designed so that anybody can complete a skills overview,” pointed out Adam. “This makes the tool invaluable to workshop managers looking to monitor staff skillsets or test potential hires. Our new learning portal represents a significant investment by Euro Car Parts in helping to nurture the knowledge and skills of technicians across the country.
“As with any profession, it is important for technicians to continue professional development throughout their career. It is also the role of managers to identify gaps in their team and commit staff to training that will address shortcomings in the workshop’s capabilities. For more immediate solutions, the programme features a technical helpline that provides fast responses to troubleshooting, repair, diagnostics and technical information queries on any vehicle, from any manufacturer.”
Adam concluded: “For those with an eagerness to learn and evolve, it is an exciting era for the independent aftermarket. “We consider the success of technicians and independent workshops as the foundation of our industry and believe nothing plays a greater role, or makes more of an impact, than education.”
clear view of the aftermarket While many garage businesses in the sector probably have a pretty firm idea of what trends and changes are affecting their businesses, it is always helpful to be able to look at the whole picture and see where you fit in. This means you can see where you are, and gives you an idea of what to expect going forward.
With this in mind, a recent report on the global automotive aftermarket from corporate finance house Clearwater International provides a useful view of the trends influencing the sector, taking in the local, regional and global landscape. Overall, liberalisation of the market, changing technology and shifting consumer habits and expectations are identified as being the key drivers in the way the sector is moving.
On liberalisation, the changes have a range of aspects. On one hand there is increasing penetration by OEMs looking to claw back market share in terms of supplying parts to the traditional garage sector. At the same time, OEMs are obliged to provide information about the exact identification of replacement parts, albeit on their own terms. The report pointed to ‘European automotive aftermarket landscape,’ a report from BCG, which observed that independents have been effective in broadening their market share at the expense of the manufacturers and their networks.
OEMs are also looking to take back a piece of the market through the formation of aftersales networks. Another part of this trend has been the increasing ability consumers have had to use aftermarket providers to service and repair newer vehicles, as seen through the Block Exemption Regulation (BER).
Changing technology in terms of the emergence of electric vehicles and hybrid drivetrains is having an impact. Back in the workshop, key drivers going forward, according to the report, include digitally enabled services, telematics, e-commerce and 3D printing. Remanufacturing is also seen as having a strong place in the future, with OEMs investing in the segment.
The report found that the average age of cars in the EU is 11 years, an age that puts a major chunk of the transcontinental car parc firmly in independent garage territory, is certainly good news for garages.
The picture looks bright in fact. The report cites a finding from Frost & Sullivan’s ‘Global automotive aftermarket outlook 2018’ that showed global automotive aftermarket demand was set to rise by 4.4% in 2018, a view shared by many sector analysts according to Clearwater’s report. Another forecast that the report pointed towards, ‘The changing aftermarket game’ from McKinsey, predicted that the market will have a worldwide worth of €1,200bn by 2030. On that basis, underlying global growth on a year-by-year basis would be 3%.
Speaking to Aftermarket about the report, Tobias Schätzmüller, Partner and International Head of Automotive at Clearwater International said: “There are a lot of challenges out there for the aftermarket, as well as opportunities. First of all, the liberalisation of the independent aftermarket. I think this gave it a boost. Also, technology-wise, there are new entrants. Some pose a threat but also offer many opportunities. Then, of course, there is the powertrain discussion, connected vehicle, and autonomous driving, which will all change the picture.”
One of the aspects the report covered was the ongoing trend of mergers and acquisitions taking place in the sector. The report cited the ongoing purchase activities of LKQ Corporation and Euro Car Parts as an example. It also pointed out the purchase of The Parts Alliance by Uni-Select two years ago, as well as the acquisition of Borg Automotive by Denmark’s Schouw.
Tobias thinks the smaller suppliers will continue to gravitate towards larger companies: “We see from the M&A analysis that there are still a lot of small and medium-sized businesses around, in small units but with a relatively limited range of products. They are now trying to redefine themselves in terms of international reach, as well as in terms of covering additional markets, and product ranges. For some of them, they recognise it is not possible to gain scale on their own, so they are joining forces with others.”
Expansion is the keyword: “There have been a host of cross-border transactions. In the report we have published a list of many of the deals that have been completed in recent years. Every month there are new deals going through. We are advising players to grow and refine their strategies, and they are bringing access to new product categories. We also advise those players to invest in technology, into automatic warehousing etc. That is the challenge, but for some of the players it is an opportunity to develop greater professional capability, and grow through investment.”
Tobias then pointed out the key trends where businesses need to pay strongest attention: “On the environmental side, it is certainly the change in the drivetrain, with electric vehicles coming in. Nobody knows in the future when, or even if, this dramatic shift will happen but I think everyone still believes we are in a mixed period of combustion engines, hybrids, and electric vehicles. However, if you look 10 or 20 years into the future, the prevalence of electric vehicles will be much stronger. This will of course change the complexities of the engine, and the powertrain. This means less components and less moving parts which is a threat to the spare parts market, although the components in an electric vehicle might have a higher average value per unit. However, this would probably not compensate for the very complex engine that is now in use in combustion engines. There will be a reduction of complexity and, assuming that with the numbers driving there may be less accidents, which will also have an impact on the spare parts business.
“On the exterior side, there will be pressure from OEMs because they now see an opportunity. While increasing liberalisation has seen the independent aftermarket gaining market share, with all the e-solutions in the car, it is possible for an OEM to be the first to provide pre-emptive maintenance. If the car has to go to the garage, they are the first to know that and can make use of this information. They are all desperately looking for alternative profit streams beyond the process of selling hardware, i.e selling a car, which is also a driving factor.”
For the garage on the ground this may seem a long way off, but there is a way forward. “I think it is important to offer the whole spectrum of products, to be present everywhere and to reach a critical size so the parts can be sourced cheaply, and they have more marketing power. Additionally, they also need to increase their competencies, to be able to offer customers the wider range of products.”
On the potential impact of Brexit on the aftermarket, Tobias said it was too early to be drawn on likely outcomes: “Parts supply either comes from the OEMs or tier one suppliers, or it is sourced in Asia. I don't know, looking at the UK market, whether they would have problems sourcing parts from abroad. It depends on what the regulations will be, but Brexit will probably have an impact.”
On whether concern over Britain’s exit from the bloc is warranted, Tobias speculated: “I trust that they will find an economical and reasonable solution. Brexit concerns the UK most, but given the highly integrated automotive value chain, it will also affect the continent.”
Looking ahead, Tobias concluded: “There will be continued consolidation in the market. In the independent aftermarket there is a lot of activity, with many M&A transactions coming up. We are actively tracking this. Companies will seek to be more international, aiming to cover more markets, and will get a broader cross-section of products. On the technological side, advancements in connectivity will mean more preventive maintenance, and overall professionalism within the market will increase. Transparency will also continue to increase thanks to the impact of the online world, and that will have an impact on price.”
