Automobile Aftersales Case Study

Current trends in Automobile aftersales Business:
(Identifying the main areas of aftersales business where major changes have occurred over the last 5 years)
The business dynamics in the automobile aftersales industry has seen some major changes in the last-5 years. While struggling with problems of overcapacity, lower sales and margins, customer retention etc. the manufacturers have been forced to rethink about their approach to after sales business as they have understood that aftersales can be a major differentiator.
Presently for any dealer major share of profit comes from spare part sales (25-30%) and labour charges (30-40%). Even for manufacturers the spare parts business accounts for roughly10-15% of revenues and 20-25% of profits.
In order to understand some of the current trends, we have to look from the perspectives of different stakeholders who are present in the aftersales business and try to understand what changes have been made by each of these stakeholders in the recent past.
The Main Stake Holders in After Sales business
With the integration of IT at every step of after sales business, the business objectives and process have changed too in recent years. More focus is now given towards understanding customer needs and problems on a real time basis, market evaluation, and providing solutions at a faster pace. This is where every stake holder has played an important role.
• Manufacturers (Original Equipment Manufacturers)
• Channel Partners (Dealerships, Service centres and Part
Also most of the vehicles that come to the workshops for regular maintenance do not return to the authorised workshops after the warranty period is expired.
Also the pressure to reduce cost and efficiency in order to increase customer engagement and retention is increasing day by day. Today the dealers are moving from the ideology of being product centric to being customer centric. The IT services like CRM systems help dealers to capture details about customers based on vehicle models, model age, part numbers, repair history etc. These reports are sent directly to the manufactures for detailed analysis.
Manufacturers are outsourcing more and more of their manufacturing processes to competent channel partners (suppliers) for the growing needs of developing and testing of multiple new models. This helps the manufacturers in cost controlling and they can focus on more important aspects of production and selling. The manufacturers are more focussed on assembling different parts to make the vehicles, brand management, marketing and channel partner