By now, it's an accepted fact that the COVID-19 pandemic has severely impacted businesses around the world, leaving none spared, and that includes the automotive industry. Until now, plenty has been said about the effects to companies higher up on the automotive hierarchy, like car manufacturers and parts producers. However, we should also be aware about how the pandemic has affected auto repair businesses, like the workshops and mechanics on the ground working directly with customers.
Recently, the Australian Automotive Aftermarket Association (AAAA) published results from a survey conducted on the Aussie car repair sector. In it, they surveyed repair businesses in three categories, namely, independent, chain and franchise workshops, to understand how the pandemic has affected them. Interestingly, the same survey has identified the creative ways that these businesses have been coping while also providing some reasons for them to be optimistic about the future.
How COVID-19 Has Impacted the Auto Repair Sector
The first obvious finding from this survey is that most of these businesses have experienced drops in their revenue. When we say 'most', we mean at least 83% of the independent, chain and franchise workshops. Very few of them were able to maintain their business levels, and even fewer have seen increased profits lately.
The silver lining here is that about a quarter of these businesses are open for business and operating normally. Majority of them say that they have been impacted but believe that they will only suffer in the short term. Sadly, 10% of them think that this situation will affect them for a more extended period.
How Businesses Are Coping
It seems that the Aussie auto repair sector is a resilient bunch. While facing the unprecedented challenges brought by the COVID-19 pandemic, they came up with many ways to try and weather the storm and survive.
Majority of the businesses have focused on reducing their operational costs. Additionally, they've also been doing lots of negotiating. Companies have arranged for rent relief from their landlords, as well as for better terms with their suppliers. All these efforts seem to be working, presumably because landlords and suppliers share the same challenges. Perhaps the silver lining in all of this is that it has become easy to sympathise because the issue is common to all. It has become a universal experience that exempts no one.
According to the survey, no auto repair businesses have closed permanently. This is good news in the long run, as these enterprises will gradually be able to reopen and generate revenue again.
In the meantime, these workshops have had to change a lot of their staff's work schedules. While most have kept their teams working their usual shifts and hours, at least a third have been forced to reduce the hours their staff work. This is not ideal, of course, but at least very few workshops have had to let go of their team or even put them on hold.
The Aussie Auto Repair Sector Is Resilient!
According to the survey, at least a third of all businesses in this sector are optimistic. 39% of them believe that the situation will improve, while another third believes that no changes will occur.
Again, this is where the auto repair sector displayed their resilience and innovativeness. Workshops have begun introducing new services that demonstrate their ability to adapt, such as offering to sanitise vehicle interiors. This is a brilliant move, considering how most customers these days are concerned with disinfecting and sanitising almost every surface they touch.
Even better, some workshops have offered non-contact pick-up and drop-off services for customers. Not only does this provide car owners with peace of mind, but it also reduces the need for people to leave their homes and move around. It is no doubt an excellent way to mitigate COVID-19 transmissions locally and help end its spread.
Indirectly, workshops have also been contributing to the cause by offering complementary services to essential workers. This is consistent with the trend almost everywhere in the world of businesses, lending a helping hand to people like medical and law enforcement personnel.
Though very few, some have even begun offering express services to cut down the amount of time a customer has to spend at the workshop. A tiny percentage of them also offer mobile servicing, though it is understandably limited. The reason is simple: most of the heavy equipment and tools you'd find at a regular workshop are fixed and not designed to be portable.
However, none of these creative approaches will ever matter if customers don’t know that these workshops are still open for business in the first place. To manage that, many companies have taken the proactive step of SMS messaging customers to announce that they're open for business.
The COVID-19 pandemic and government lockdowns have been very painful for the automotive industry. Sales of new vehicles have dropped drastically, even forcing some manufacturers to delay new launches.
I believe that businesses in the auto repair sector have reason to be optimistic. Remember: the auto repair sector gets its business from vehicles that are already out there sitting in people's garages, driveways, in bus/truck depots or wherever else. To me, that means that the customers and their needs already exist, they're just put on ice for the time being. As lockdowns gradually lift, these customers will drive to their trusted workshops, and business will pick up again.
It's not a matter of 'If', it's merely a question of 'When', and that's something worth anticipating.
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By Ray Hasbollah