In a recent interview with Auto Parts Asia Magazine, the Chairman of the Australian Automotive Aftermarket Association, Stuart Charity, stated that “We are very positive about the growth outlook in the aftermarket over the next 5 years as all the key drivers that we look at to assess future demand in our industry is positive”.
We have no reason to doubt this positive outlook and we need not delve into the finer details of these drivers, but we can quote Stuart Charity directly from the interview when he says that his positive outlook is based on the following-
However, from our perspective as both technicians and employees, there is much that is not said in the interview, which while positive, provides a top-down, birds’ eye-view of the independent repair industry. While very few of us are in a position to view the overall independent repair industry from above, almost all of us see the industry from our positions at ground level, from where the view is vastly more granular and centred on our own daily-lived experiences of the independent repair industry.
Note though that it is not the intention of this article to create negative feelings or expectations about the sustainability or profitability of the independent repair industry. Far from it: the intention is to look at the kind of work environment(s) we can reasonably expect to see soon, but before we get to specifics, we need to look at-
According to this comprehensive study, which was performed by ACA Research on behalf of the Australian Automotive Aftermarket Association in 2018, it is likely that a significant percentage of independent workshops will not survive into the near future. Limited space precludes a comprehensive discussion of a) all the reasons why some workshops with three or more bays are at risk of closing down, and b), all of the study’s findings, but we can do the next best thing, which is to list a few key findings here-
1) 22% of surveyed workshops reported a decrease in daily vehicle counts in the 12 months before the study, while a further 6% of workshops expected a decrease in the following 12 months.
2) 67% of surveyed workshops that fall into the “At Risk” category have reported annual turnovers of less than $499 999, while many successful workshops have turnovers of greater than $1 000 000.
3) 51% of “At Risk” workshops cited the difficulty in finding and retaining skilled mechanics as their single biggest challenge in remaining profitable.
4) In 81% of “At Risk” workshops, the owner of the establishment plays an active role in the management of the workshop, while 70% of successful workshops have owners that play active roles.
5) 47% of "At Risk" workshops have owners/managers that fall into the 45 to 55-year-old age bracket, which is the age bracket that is the most resistance to change.
6) 48% of all surveyed independent workshops cite keeping up with technological advances as a challenge to remaining profitable.
We could list dozens of other findings here, but that would be pointless because the full report is available here. Nonetheless, the point of listing some key findings here is to show that a), the AAAAs positive outlook does not apply to all independent workshops, and b), that only the best- managed, most progressive, and most customer-oriented independent workshops will be successful in transitioning to the next level.
By next level, we mean workshops that are specifically designed and equipped to enable the next generation of mechanics to cope with the technical demands of modern vehicles. In fact, if the truth were told, very few independent workshops now operating in Australia are equipped to deal with the avalanche of technical advances, such as advanced ADAS and safety systems that are now being implemented by all car manufacturers.
While advanced safety systems used to be the preserve of high-end luxury vehicles, the fact is that systems like autonomous emergency braking will be legally mandated on all cars made and sold in the US market from 2022, and many of those vehicles will end up on Australia’s roads soon after.
So what is the point of all of the above? Simply this: when the Mandatory Data Sharing Law becomes operative, we will be expected to deal with cars that run off up to 100 million lines of computer code, which many industry experts expect to increase to about 500 million lines in less than ten years. By way of comparison, Boeing’s most advanced passenger aircraft, the 787 Dreamliner, requires only about 14 million lines of computer code to operate safely.
So how will workshops, and our approach to diagnostics and vehicle servicing, have to change to meet the demands of vehicles that, in terms of programming, are six times more complex than even an advanced heavy aircraft? Based on extensive research into the subject of workshops of the (near) future, this writer has found the following pointers. Let us start with-
This is perhaps the understatement of the year because while many of the traditional mechanical components of new-generation vehicles, such as engines, brakes, suspension, and steering components will still wear out, it is the effects of replacing/servicing/maintaining these components that will pose the biggest challenges.
We are already at the point where replacing shock absorbers and even brake pads often require the re-calibration of one or more ADAS systems, but until now, the lack of OEM-level service/repair information largely prevented us from diagnosing/calibrating some brake, steering, and suspension-based ADAS systems.
Thus, when the Mandatory Data Sharing Law becomes operative and we get access to OEM-level service/repair information, we will have two choices. We can choose to invest in dealer-level diagnostic and programming equipment and embark on a very steep learning curve to learn how to interpret what the equipment is telling us, or, we can choose to keep on referring these jobs to competitors or dealerships.
If we were honest with ourselves, we would have to admit that very few of us could unravel the exceedingly complex communications networks that connect several dozen control modules (on new-generation cars) that, collectively, use 100 million lines of computer code. Essentially, we would have to become software/electronics engineers with somewhat more than a working knowledge of the first principles of electricity, aka basic electrical theory.
If we are going to be working with advanced telematics and ADAS systems, we are going to have to learn about things like arithmetic mean values, rectified values, root mean square values, oscillating circuits, transfer functions, signal-to-noise ratios, and the nature of transient and periodic signals- and much else, besides.
We could, of course, pass all of this along to the auto electricians in our workshops, but that will leave us with nothing to do but change oil, spark plugs, and brake pads- and who wants to do that every day, the whole day long?
Next-generation workshops will not only be squeaky clean, temperature-controlled, and feature glare-free lighting; they will also, at a minimum, have more than 5 bays, and some, or all of them will be at least 10 metres wide (or long) so we can set up ADAS calibration targets. Calibration of ADAS systems is fast becoming the be-all and end-all of car repair/maintenance, meaning that independent workshops that cannot, or will not embrace the technology will likely not survive the next few years. Of course, there is always more than one way of doing things, and some of these might include transitioning into some sort of specialisation like repairing or rebuilding transmissions, turbo chargers, or hybrid battery packs and transaxles.
Future workshops will also have at least one dedicated diagnostics bay that is shielded against electromagnetic radiation to make sure that when vehicles go to “sleep” for diagnostic purposes they stay asleep. The last thing a diagnostician wants to happen is for a vehicle he had been working on for five hours to wake up when someone in an adjacent bay starts an oscilloscope that wakes up some modules in the vehicle he is working on.
In workshops of the near future, everything that pertains to a vehicle in a bay will be recorded electronically. This will start with the work order, and extend to the vehicle’s service history, all the way to the diagnosis and progress reports on the state of the work, which will be available to the customer in real-time.
The state and health of every electronic system on that vehicle will be simultaneously available to the service advisor, the technician, the workshop management, the customer, and insurance companies should an insurer request or need the information. In some situations, such as when problems cannot be diagnosed, all the available information could be made available online to technical support centres and even the vehicle’s manufacturer. Similarly, the vehicle’s identifying information and service history could be made available to parts vendors to ensure the correct parts are ordered and delivered.
What started as a narrow niche market for online marketers in the US and western European markets has now evolved into an established segment in the marketing world. Specialist marketers now build, maintain, and manage the websites of some of the most successful independent workshops in those markets, doing everything from handling bookings on the website and social media, to updating information on services offered, and managing customer feedback and/or enquiries.
Marketing is not something that many workshop owners/managers are particularly good at, so by entrusting this vitally important aspect of the business to outside specialists, the management team can focus on the workshop’s core business, which is to build positive client relationships by fixing their very complex cars right, the first time.
Some market analysts believe that as cars get more complex, technicians will transition from having jobs in the automotive repair industry to pursuing careers in the automotive repair industry. This is an important distinction because the very high levels of technical competence that will be required of technicians to succeed in the workshops of the near future will be hard for technicians to achieve, and expensive for workshop managements to retain.
Given that Australia has a severe shortage of skilled mechanics, and that many will rather leave the industry than upgrade their skills to the required level, those technicians that do choose to upgrade their skills will no doubt be in a better position to negotiate alternative remuneration packages.
In the US and EU markets, where there are also skills shortages, highly skilled mechanics are now being offered shares, profit-sharing, and other non-traditional forms of compensation for their skills and knowledge. However, Australia is a different kettle of fish altogether and whether (or not) these schemes will be introduced, or be successful here remains to be seen, which leaves us with this-
We stated elsewhere that it is not the intention of this article to create negative expectations, but having said that, it is difficult to see how some independent workshops in deep rural or remote locations will make the transition to high-tech, clinical environments that bristle with all the latest technology.
Then again, many, if not most of these small workshops for who a sense of community is more important than most other things, may not need to make the transition- at least, not for a good few years yet, and here is why-
The average age of the Australian parc of passenger vehicles is 9.8 years, but 27.2% of passenger vehicles are between 6 and 10 years old, 21.1% is between 11 and 15 years old, while 21% is older than 16 years. Therefore, there are still plenty of older vehicles in deep rural and remote areas that do not require the latest in computer technology to diagnose, repair, and maintain. Small, community-based workshops are perfectly capable of servicing, repairing, and maintaining older vehicles, and as such, these establishments still play a vital role in the larger independent car repair industry, and they will continue to do so for many years, yet.
However, the 30% of cars that are up to five years old are something else entirely, because most vehicles in this group are replaced by their owners after only about two years, meaning that cars younger than 5 years tend to be over-represented in the second-hand car market. What this means for us as technicians is that we may start to encounter advanced ADAS and safety systems on new cars a bit sooner than we may have wanted to.
For the moment, though, we can legitimately claim that we’d rather not work on these cars because we don’t have access to service and repair information, not even from third-party vendors, who also don’t have it yet. However, by all reliable accounts, the implementation of the Mandatory Data Sharing Law is imminent, so what will you say and do when it comes into effect? Will you become part of the next-level independent repair industry, or will you back out and take up another career altogether?
Put simply, the proverbial ball is in our court and unless we pick it up and run with it, we might just miss the best career move we could possibly make- which is to become super-mechanics in high-tech workshops.
