VROOM TO MOVE

Auto services are staying in the fast lane.

The electric, driverless car of the future will in the next decades transform the automotive industry. Right now ride-sharing and digitalisation are big influences.

So what are auto services franchises doing to stay in the fast lane?

Cars and trucks are big business. The Australian Automotive Aftermarket Association (AAAA) took up more than 21,000 sq m of the Melbourne Convention and Exhibition Centre to showcase the 400 exhibitors in the largest automotive trade exhibition in the Oceania region, 2019 AAAA Expo and the concurrent 2019 Collision Repair Expo.

AAAA member companies employ more than 40,000 people and export more than $1 billion worth of products each year in an industry that generates revenues in excess of $11 billion domestically each year.

The Australia Automotive Aftermarket Trends Report 2018 pointed out the significant shifts in the Australian region as a result of acquisitions, joint ventures, e-commerce, and the exit of manufacturers.

According to the report, in 2017: • aftermarket parts revenue = $11 billion • aftermarket e-retailing revenue = $0.48 billion.

The Australian Bureau of Statistics cited that as of January 31 2017, 18.8 million vehicles were registered. The nation’s vehicle fleet grew by 2.1 per cent in 2016–17. Of this, 22 per cent were diesel powered vehicles, up from 15.5 per cent in 2012.

CarsGuide author Andrew Chesterton wrote in March this year, “All up, the new car sales figures in Australia add up to more than 7.6 million new cars in just seven years. In a country of 24 million people.”

It’s big business, but it’s a changing business.

Take tyres for instance. The tyre retailing industry has of course benefited from the increased number of motor vehicles on Australian roads over the past five years, says IBISWorld. But there’s a downside too.

IBISWorld’s “Tyre Retailing” report of June 2018 shows that while there are more cars, many drivers are minimising costs and cutting back the kilometres. That equates to lower demand for tyre replacements.

However, overall, industry revenue is expected to rise at an annualised 2.1 per cent over the five years through 2017–18, to $5.2 billion.

Cars and trucks need repairs and updates, and Small Biz Buzz SBS reports mobile app Invoice2go spotted auto-repairs growing 78 per cent in 2017–18, according to its invoicing data.

Speaking at the May 2018 Autocare Conference, ACCC chair Rod Sims said, “Nowadays, you practically need a degree in computer engineering to repair a vehicle: today’s new cars contain in excess of 10 million lines of computer code, more code than is used to operate the avionics and onboard support systems of modern airliners, to create the sophisticated software that they require to work.

“In a sense, you don’t really drive cars anymore: you drive computers.”