Garage Services offering from LKQ ECP to help independents diversify
Published: 02 September, 2020
LKQ Euro Car Parts is launching a new Garage Services programme with a view to helping independents increase their opportunity to generate revenue by offering a wider range of more lucrative servicing areas.
Key potential income streams identified include ADAS, air conditioning, carbon cleaning, diagnostics, tyre and wheel balancing, wheel alignment and hybrid and electric vehicles.
Garage Services will be promoted over the next two months, via an extensive marketing campaign and customer engagement activity.
Analysis of recent ONS data performed by the IMI showed that 13% of automotive sector businesses have diversified their offering as a result of COVID-19 in order to exploit a wider range of opportunities.
Colin Cottrell, Marketing and Central Operations Director at LKQ Euro Car Parts, commented: “Nothing is more expensive than a missed opportunity. In fact, our calculations show that the average total monthly profit garages can generate by offering carbon cleaning, ADAS, wheel alignment and air conditioning services is close to £17,000.
“While we don’t by any means expect all of our independent garage customers to invest in offering the full set of Garage Services overnight, the purpose of this campaign is to bring them all together under one banner, and make clear the opportunity each one represents.
“This includes setting out the investment in training and equipment required upfront, through to the benefits from the garage and its customers’ perspectives, and ultimately what the return on that investment looks like.
“We can then work with independent garages to identify where their money is best spent, and to help them upgrade the services they offer. We can also support with financing equipment, from just £25 a week through our Easy Start Scheme.
“To take wheel alignment and ADAS for example, ‘steering and suspension’ is often to blame for a failed MOT. If wheel alignment and ADAS form part of a workshop’s Garage Services offering, worn suspensions can be detected as part of a vehicle’s routine service. Any issues can then be rectified ahead of the vehicle needing its MOT, saving time for both garage and customer.”
Colin continued: “The automotive sector was already going through a huge period of technological and regulatory change, before the coronavirus hit. for example, the government’s direction of travel on emissions has been clear for some time, and ADAS will be mandatory on all new vehicles within 18 months. Increasing numbers of hybrids, EVs and ADAS-equipped vehicles are entering the second-hand market already, which means it’s essential that garages can upskill technicians and access the equipment needed to service them.”
Colin added: “Garages that that take a more service-focused approach are best placed to do well in the long term, and to rebuild their businesses successfully after lockdown. That’s why our focus is on services, too – going above and beyond the provision of parts to deliver training and equipment, and sharing the expertise within our business, to help our customers grow theirs.”
For more information, visit omnipart.eurocarparts.com/omnihub
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- Shifting demands, shifting gears
Garages that thought they would be veering away from MOTs in favour of essential repairs during the Coronavirus lockdown are still doing MOT tests at roughly the same rate, it has been suggested.
While DVSA figures showed a 78% drop in MOT performed between 30 March and 24 April, marketing agency Digital Incubator says the independent garages it works with that remained open during the lockdown have not seen such a steep drop.
“We have a lot of garage clients that have switched from MOT campaigns to clutch and gearbox work,” explained Jamie Stoulger, Sales Director and Operations Manager at Digital Incubator. “However, our clients are still generating a steady flow of MOT enquires.”
Campaigns
The marketing agency works with garages across the UK, and currently has over 1,200 motor trade campaigns ongoing. 80% of customers are in the independent sphere.
Jamie continued: “Regardless of the MOT not being relevant, people are still getting their cars picked up. A lot of our clients run a collect and delivery service. We are running that via the ad campaigns and on the website.”
There has been an impact, Jamie confirmed, but a mild one at best, and work overall continues: “MOTs have slowed down slightly, that just what it is, but regardless of us being in the middle of this pandemic, if someone still has to go into work and their car breaks down, they still need to get it repaired. They are not going to just leave it on the side of the road and deal with it six months later. You need it done. As a result, our clients are still generating leads.”
Performance
We asked Jamie he thought this has taken many of their garage clients by surprise. “I wouldn’t say so,” he replied. “There are a lot of franchised dealerships and service centres that have just closed their doors without even thinking about it. They just went ‘we can get funding, let’s just put everyone on furlough’. The garage businesses that decided to pummel through this, they are still performing. There might be a small dip in some cases, but across the board, our averages have not really dropped. I don’t want to make a bold statement and say it isn’t affecting anyone – it is – but they are on average not far behind where they usually are. It has hit them, but we are not talking about 50%. The drops in business are probably around 10% to 15%.”
Situation
On what has been in many cases blanket closure by across much of the franchised network, Jamie observed: “I worry about the outlets that are closing their doors without making the slightest attempt at generating business. It’s still out there. People forget that. Across the board, if you think about it logically, there might only be 50% of the business available, but if 80% of the outlets are closing down, the garages staying open will benefit. I think a lot of businesses are going to come back to a very big decline in their own customer base. Their customers have had chance to test another garage out. If they had a better service, I know where they will go the second time around.
“I think some businesses have taken things a little too far. There are things you can put in place, like contactless pick-up and delivery. Dealerships could have put in place what the independents have done to keep their workers safe and the customers safe. If you can, do everything contactless. A lot of companies are going to go bust because of this. The best bet is to do things safely, ensure it is all contactless, but keep the doors open. The business is out there, they just need to be a bit more open about how to get it.”
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