The ever-evolving automotive aftermarket — a term referring to all post-purchase activities such as maintenance, repairs and parts replacement — is worth a staggering $300 billion in Europe alone. This sector not only plays a crucial role in maintaining and customizing vehicles over their lifespan but also contributes significantly to the sustained success and operation of original equipment manufacturers (OEMs), ensuring customer safety and convenience. Despite being essential, the aftermarket is presently fragmented and lacking in transparency, particularly when it comes to aftersales services.
Different markets in Europe — particularly the UK, France, Germany and the Netherlands — have completely different approaches, which makes managing a fleet across multiple countries quite challenging. Most notably, the industry needs to keep up with complex vehicle technology by offering specialized services.
In this blog, we identify the main challenges facing the industry today; repair times continue to rise due to parts and labor shortages, causing decreased fleet utilization and growing backlogs. In addition, modern cars' demand for more intricate repair work results in a need for significant investments in training and equipment.
However, from each of these challenges emerges a new opportunity:
- Addressing labor shortages & skill relevance: Retiring mechanics and declining industry appeal among youth has resulted in a significant labor shortage and skills gap. Yet, this challenge presents an opportunity for change. Bridging this labor gap necessitates industry-wide efforts including technology implementation, enhancing training programs, and placing a spotlight on the industry's advancements such as the transition to EVs and sustainable practices. By focusing on these measures, the industry has the chance to attract younger generations. Repairers who realize this early on gain a competitive edge.
- Changing trend in car ownership: An upsurge in shared mobility businesses means increased vehicle usage and wear and tear. This necessitates a shift in auto-service expertise and can enable service providers to adapt business models, targeting car-sharing and leasing companies, and allowing the potential of private leasing.
- Electrification & specialization require smarter allocation: While EVs present opportunities for aftermarket services, readiness across Europe varies. Repair workshops must evolve, and adopting a smarter approach to service allocation is necessary. Fixico helps by pairing suitable repair shops to specific damages, benefiting fleet operators by providing them direct access to the most fitting service providers.
- New OEMs managing aftersales services: As new OEMs from Asia and the US enter the European market, the management of aftersales services is set for a revamp. Fixico's interactions with these emerging brands has revealed that their approach to the aftersales segment is strategic, acknowledging the importance of a convenient and quality customer experience similar to that provided by legacy brands. For example, VinFast and Fixico's collaboration is an example of a new OEM focusing on offering top-notch service while maintaining quality control, cost and warranties.
As these trends continue to evolve, it's becoming more important than ever for repairers and fleet/claims managers to adopt digital solutions and updated strategies — which is where Fixico comes in. With a tech-first approach, Fixico provides solutions to stay on top of these trends and effectively navigate the challenges and opportunities that lie ahead. With a digital car service management platform and marketplace, we enable businesses to make data-driven decisions, and fully optimize, control and track their repairs, while offering exceptional driver journeys.
We recently launched our Future of Car Repair report series, and this blog is meant to serve as a summary of the first edition on the state of the European automotive aftermarket. To read the full report with more insights from industry experts, download it here.