How EV manufacturers can expand to new markets fast

Automotive manufacturing has gone through a rapid transformation in the last couple of years, despite ongoing supply chain disruptions. With large original equipment manufacturers (OEMs) facing production challenges, new OEMs have seized the opportunity and launched various electric vehicle (EV) models. Many of these new brands have the opportunity to expand to new markets, especially those coming from Asia and entering the European market.

Now, with many safe, affordable and environmentally-friendly vehicles to choose from, consumers are going to look for which brands ensure the smoothest journeys even after the purchase. In this blog, we will discuss the different roads OEMs can take when building service infrastructures that enable maximum flexibility and convenience for customers bringing their vehicle in for maintenance, repair and other services.

Why investing in an after-sales service infrastructure matters

The effort in making EVs as attractive as possible for consumers has certainly paid off, and luckily there’s a lot of options to choose from with new OEMs consistently entering the scene. For instance, you have Lucid Motors and Rivian from the US, NIO and XPeng from China, VinFast from Vietnam and Lightyear from the Netherlands. As manufacturing complex vehicles is highly expensive, OEMs need to look for ways to maximise their return on investment.

Research has shown that the majority of profit for OEMs comes primarily from after-sales services – and especially workshop services such as repair and maintenance. A recent Deloitte report predicts that by 2035, 92% of vehicle after-sales will come from the workshop. Another reason why managing the after-sales services is essential for OEMs, is by being able to control often extended warranties.

In order to remain relevant, OEMs need to offer seamless customer journeys to ensure brand loyalty. When drivers are in need of maintenance or a body repair on their vehicle, the last thing they want is having to wait weeks, let alone months for an appointment at a centre located far away. To prevent this, OEMs need to make strategic decisions when developing their service infrastructure.

Setting up the right infrastructure can make or break a brand

There are essentially three roads OEMs can take with regards to creating a network of service providers and suppliers so that customers in all their active markets can get the support they need. Here’s how they can go about it:

1. Dealership contracts: The traditional approach to selling and servicing vehicles has been through the symbiotic relationship between OEMs and dealerships. OEMs provide the vehicles and parts used for repairs, and dealerships provide the various locations for customers to conveniently visit, which allows OEMs to quickly launch in new markets. This has been the case for the last 100 years. Today, however, manufacturers have learned from the likes of Tesla, how limiting contractual agreements with dealerships can be. By working with multiple dealerships, it’s nearly impossible to have a centralised data source to track performance. Dealerships also act as a middleman, preventing OEMs from interacting with consumers directly and managing those experiences and relationships.
2. The do-it-yourself approach: To have utmost control over all after-sales operations, OEMs can choose to build the entire infrastructure in-house. For example, Tesla decided from day one to build their own service centres which only cater to Tesla vehicles. While this sounds great from a control perspective, it becomes a challenge to build centres fast enough to keep up with demand. An OEM taking this approach might charge high fees to make up for the costs of building the service centres from scratch. Perhaps OEMs could eventually build enough centres to truly be accessible for customers everywhere, but it certainly takes a lot longer than other approaches.
3. Create your own ecosystem with existing providers: As new OEMs emerge, each with highly complex vehicles, the more it becomes evident that there is no one-size-fits-all solution to setting up a service infrastructure. Each OEM will require connecting with different stakeholders and trying new things to stay competitive. As such, a customisable digital platform which enables a dynamic network integration will enable a future-proof approach to always meet changing customer needs. OEMs can work with existing service providers and simply connect them all via a single platform. This also enables rapid expansion as OEMs will already have a digital infrastructure in place, and all that’s required is finding new preferred providers, of which they can onboard and offboard effortlessly. Warranties will also be fully managed by the OEMs.

Fixico is ready to support manufacturers in revolutionising how we think about vehicle services

Since Fixico was founded in 2014, we have been developing a platform that connects the supply and demand side of car repair. In that time, we have evolved into a fully fledged customisable platform and marketplace that supports businesses of all kinds in better managing and allocating their repairs. Recently, we’ve expanded our platform furthermore to support the entire after-sales service management needs of businesses, and especially EV OEMs entering Europe.

As our main focus has been on the platform itself, we realised that it’s already capable of so much more than just connecting damages with suitable repairers. Also, our expanding network of EV-certified repairers allows for a turnkey set-up whereby customers of new car brands can get top-quality service instantly.

That brings us to today. We are in conversation with multiple new EV OEMs, as we can offer a solution which enables them to connect all necessary stakeholders in a single environment and have full control over the customer journey.

Interested in hearing more about our aftersales service management platform capabilities? Request a free demo today!