It’s particularly difficult to track and pick up on trends in the automotive aftermarket. Just a few years ago, major consulting groups were predicting electric vehicles (EVs) would overtake internal combustion engine-powered vehicles by 2030. Now those estimates seem to be in major jeopardy as the EV market is hitting some speed bumps. But it’s only slowing. Make no mistake: change is coming.
Shop owners will routinely growl at the cost of technology and other investments — and rightfully so. Much of the time, new technology is very expensive and the promises of it being a “game-changer” are often discovered — thousands of dollars later — to not be the case. It’s frustrating.
Our industry is likely never going to be on or approaching what is thought to be the “bleeding edge” of technology because there is demand from consumers to keep prices as reasonable as possible, since getting to work and driving kids around will remain a necessity, not a luxury. But let’s deconstruct the meaning of the word “reasonable”.
A customer who is grumbling over the price of a repair or a set of new tires isn’t the industry speaking. Even if most of your customers are complaining about the cost of your services, the industry isn’t whispering to you that you need to lower your prices. As a matter of fact, it’s screaming to you to raise your prices — across the board.
We are about to hit a phase in America’s automobile love affair that we haven’t quite seen before. Cars are still being driven longer. Their sticker prices rival the cost of some low-income housing. The consumer’s average commute and distance from work keeps increasing every year.
And if hydrogen, EVs and other technologies even grab a foothold on the market, your shop needs to be the place to go. Industry consolidation is demanding it. If you don’t evolve and if you don’t change and adapt to your circumstances, you will be obsolete.
A few years ago, a major manufacturer of luxury vehicles ran an ad that showed a side-by-side shot of an expensive car entering a new car dealership repair facility and an independent one. Not surprisingly, the independent shop was characterized as dark, dirty and full of idiots with stains on their shirts. The new car dealership was depicted as being clean, pretty and professional. Now there is a major player in the aftermarket making the same comparison. This company shall remain nameless, but it is very familiar to readers of this publication.
The only way you can fight unfair stereotypes perpetuated about independent tire dealerships is by being anything but what’s shown in those inaccurate depictions. And that takes money to pay the right employees the right amount, money to keep your dealership clean, and of course, money to invest in technological upgrades that will benefit your ability to recoup the investments you have made.
When dealing with an unknown — in this case, the future of the automotive aftermarket and the tire industry — you are bound to make mistakes. It’s OK. Not everyone is Nostradamus. No one is, actually. But if you wait until a clear winner rises from the ashes of the competition, you will be woefully behind the eight ball. You will be that dealership the commercials and ad campaigns are making fun of.
The only way forward is a combination of shrewd money management and intelligent risk taking. Money management means assessing the full cost of adopting anything new and planning multiple outcomes. Intelligent risk management is pushing the bar hard enough to do things differently, but leaving some in the reserve. Take every failure as an opportunity to learn why and how something didn’t work. That will improve your success ratio next time.
Independent tire dealerships cannot continue to hold up the rear in profitability. Out of the trades, we are dead last — still — in collection rates. Yet there are fewer bays in America than ever and more vehicles on the road. I’m not going to tell you what to do. Nobody has a crystal ball. But I can tell you that burying your head in the sand will put your business perilously behind the competition and render you unable to capitalize on what’s next.
