How Will Your Shop Specialize?
Trends come and go. Technology evolves. Change is the way of the future. Shop owners have likely been following the evolution behind the building of the cars hitting the road today with a watchful eye in preparation for the repairs they’re likely to see down the road.
It’s no secret that as modern vehicles have become more and more technologically advanced, the repair process has become increasingly complex—a shift that’s spurring a slow moving trend toward specialization from formerly fully general repair shops.
While Jim Lang, aftermarket analyst and president of Lang Marketing, recently highlighted the challenges general repair shops face these days while trying to keep up and stay competitive, Derek Kaufman, managing partner at Schwartz Advisors also notes that a need for specific training and equipment is helping push the shift toward shop specialties.
Though the trend is slowly gaining momentum and industry analysts only expect about 20 percent of general shops to become entirely specialized operations, an estimated 30 percent of shops that are likely to be vulnerable to lack repairs they can perform should they opt not to invest in some level of expertise.
“This is a shift that is bound to leave some shops going the way of the dodo,” says Rick Schwartz, CEO and Managing Partner of Schwartz Advisors. “Among repair providers, there is a need to move now or be lost to the trend in the future. The first to market will have advantages.”
Though adopting a specialty is sure to require consideration for investments in education and equipment, the age and expertise of a shop’s technicians, and the ultimate goal of a shop’s succession plans, Schwartz says a shop’s market competition should also be considered.
“Adapting to this shift really comes down to their own agility. If [shops] don’t move now to learn and grow in a given trend, can they ultimately move fast enough as the market shifts in the future?”
Based on the level of specific training and equipment needed to maintain full-service repairs, Kaufman predicts several areas of expertise are bound to boost the drive to specialize:
- Electronic diagnostics and repair: Electronics and software will dominate the market and require specialization.
- ADAS calibration: Some shops will invest in calibration equipment while others will buy calibration services from other shops or dealerships.
- Autonomous vehicle (AV) certification specialization: AVs will be heavily regulated and require multiple checks per year for road worthiness.
- Hybrid vehicle service: Service covering both ICE and EV powertrain components continues to grow.
- Electric drive vehicles: Specialists in electric drive will emerge over time.
- 15+ year old cars: There could be a specialization on the service of older model vehicles as the average car parc age passes the 12 year mark.
- Fleet service specialization: We see a move toward fleet ownership of vehicles in the “Transportation as a Service” (TaaS) in the future, requiring a B2B specialization by shops servicing those vehicles. Shared and “subscription-based” vehicles will require new service approaches.
- Mobile service specialization: New business models could require specialization in mobile service -- online car sales, concierge services for shared or subscription vehicles, etc.