Car servicing growth zips past sales surge

Car service stations are getting busier, thanks to the growing volume of automobile sales. Take for instance, the country’s top car makers—Maruti Suzuki and Hyundai. For them, the growth in the number of cars coming to service stations is higher than the increase in sales they have witnessed. The two companies together are servicing 2 million vehicles a month, registering a growth of 20 per cent year on year.

The country’s biggest car maker Maruti Suzuki’s 3,300 service workshops are servicing 1.5 million vehicles a month. The volume has been growing at 20 per cent year on year. This is higher than the growth in company’s car sales, at around 15 per cent. The company’s average sales volume is about 137,500 cars a month.

With new technologies being introduced in cars, customers are increasingly looking at authorised stations to service their vehicles. R S Kalsi, senior executive director (marketing & sales) at Maruti Suzuki, said while sales growth has helped push the volume of serviced cars, there’s also a significant shift in customers preferring dealer workshops.

“Vehicles now have advanced technologies and components which require trained technicians and equipment for service. We have always had the advantage of being affordable in our spare parts due to volume,” said Kalsi. Availability of skilled manpower at workshops through training and recruitment from ITIs is also helping grow the workshop business.

The increasing volume at service workshops also has a revenue implication for dealers as well as the company which sells spare parts to these dealers. “Service is critical to the relationship with the car owners and revenue follows,” said Kalsi.

Korean car maker Hyundai’s 1,300 workshops are servicing 520,000 cars every month, 18 per cent more than last year. Its domestic car sale is growing at about five per cent with a monthly average of almost 45,000 units. S Punnaivanam, assistant vicepresident and head of service at Hyundai, said the company has been focusing on increasing service retention of customers owning three to six-year-old Hyundai cars through special offers and service packages. “We have grown beyond the volume of new cars in our service. About a year ago, only 79 per cent of the cars sold over the previous five-year period used to come to our service workshops. This number is now up to 82.5 per cent and continues to grow,” he said. Hyundai, the country’s second biggest car maker, sold 2.26 million cars over the last five years.

Jnaneswar Sen, senior vice-president (sales and marketing) at Honda Cars, said almost 85 per cent of the company’s total customer base visits the service network at least once a year. The Japanese car maker, fourth biggest in the domestic market, services about 160,000 cars every month.

Maruti Suzuki has experimented with taking service to a premium level with the launch of NEXA service early this year.

NEXA is the company’s network to sell premium cars. Customers of NEXA cars — S Cross, Baleno, Ignis and Ciaz — have the option to watch live video of their cars being serviced on their mobile phones. “Customer expectations have changed even on the service front. Our research shows technology will be a key differentiator …. from generating health cards to using technology to explain work to be undertaken on the car with estimated costs to watching live video of car being serviced, we are leveraging technology to elevate service experience,” said Partho Banerji, executive vice-president (service) at Maruti Suzuki.