Ongoing new car supply challenges in 2021 could cost aftersales sector another £300 million in lost revenue

• Latest 2021 SMMT new car registration figures deal another predicted £300 million blow to the UK aftersales marketplace
• New car sales are down 29.3 per cent year-to-date on 2019 levels with some leading prestige OEMs predicting a network reduction of 35 per cent over the next two years
• Continued challenges with COVID-19 vehicle production delays and the semi-conductor chip crisis have caused new car supply problems
• Loss of new car sales in 2020 caused by COVID-19 was already predicted to have cost the aftersales segment £300 million
• Tools such as SecretService^TM offer franchised dealers essential lifeline during prolonged challenging period by accessing market share from segments 2 & 3 and by increasing customer retention

New car sales are down by 29.3 per cent so far in 2021 compared to 2019 (pre-COVID), following a challenging year for manufacturers to keep production lines moving.

Factors like COVID-19 proved to be a problem at the beginning of the year with supply chain problems, social distancing and self-isolations playing a large role in slowing down production. While COVID-19 does not play as much of a role in the decline of new car production now, it has left a dent in the statistics for the year.

However, the semi-conductor chip crisis continues to be a contributing factor to the lack of new car registrations. The shortage of chips has forced manufacturers to reduce their production capacities and even temporarily pause production lines, which has had a profound impact on new car sales. Many OEMs forecast lead times of well into 2022 for next new vehicle deliveries.

Gavin Ruddick, Non-Executive Director at BookMyGarage.com, commented, “Last year, demand for new cars plummeted due to the COVID-19 pandemic, which we estimated would cost the aftersales segment £300 million in lost revenue.

“Demand for new cars has since recovered but now manufacturers are facing significant supply challenges and the SMMT’s data indicates sales in 2021 could be similar to last year. That means the cost to the aftersales sector could now be a combined total of £600 million, calculated from the near two years of a 30 per cent reduction in new cars supplied into dealership groups, and impacting the vital revenue from segment 1 (0-3 year old cars).

“This is why now more than ever our sector needs support in finding innovative ways of filling spare workshop capacity which is automated and supports the administration and personnel challenges all sectors are currently experiencing. Tools such as SecretService^TM can offer dealers an essential lifeline in these difficult times.”

With the 0-3 years old parc shrinking in consecutive years, there are now far fewer vehicles to service. SecretService^TM enables franchised dealers to attract additional work for vehicles aged three years and older by placing their services alongside independents and providing customers with the opportunity to have work carried out by an authorised repairer at a competitive price.

The advanced software which powers SecretService^TM also allows dealers to reduce the administration of aftersales bookings by managing live workshop capacity and allowing customers to be in the driving seat of their booking journey.

In addition, retailers can then use new technology to enable self-check-in, ensuring consumer transparency and trust is enhanced further via video vehicle health checks (VHC), allowing the customer to authorise work identified through the connected portal.

This connected aftersales journey, powered by Secret Service, allows customers to access live dealership service and MOT capacity using technology throughout the whole journey to reduce the demand on personnel.

BookMyGarage.com has helped more than 4.5 million motorists obtain instant comparison prices for MOT, service and repair procedures through its network of over 9,000 franchise and independent UK garages.