Death of the car workshop

I had breakfast with my good friend Bob running a car workshop, who said that he is seriously considering selling his business. I asked him why, and he said that he foresaw the eventual demise of the traditional car workshop. He has been overwhelmed with so much news and media coverage of the electric car, automated vehicle, and recently the automated transport and logistics run by the car makers in the near future. The latest news is about GM’s investment in Lyft and Toyota Motor Company’s in Grab.

With the electric car, there is no engine and transmission, so there goes the traditional income source for the car workshop. No more oil and lubricant, so no more oil change. No more filter change. No more periodic replacement of spark plugs, ignition coil check, fuel lines, fuel system, and along with them also go all the sensors. Brakes last longer with the regenerative braking system, , no more starter motor and alternators to replace. This is a whole new ball game with the electric car.

For the typical car workshop, what does the future hold for them? I think to break down the vehicle repair and maintenance industry and the key players in the basic structure of the industry, the tire shops can stay, since electric cars still need tire replacement, wheel balancing, wheel alignment and stuff.

​What they have to partially forego will be income from oil change. However, in Thailand’s context where 70% of the revenue for the tire shops come from the selling of tires, there appears to be not much of an impact.

Quick lube service stations will have to bear significant impact, so they have to do all they can to retain the customers of older cars. They can still earn from the sale of things like wiper blades, starter batteries, and they have to start to remodel themselves to include lithium ion battery sales and service, become more active in glass repair, sell more air con services, accessories and merchandise. I classify BQuik, PTT Fit Auto and Castrol service stations in this group facing the greatest threat.

It is estimated that the electric car customer will visit the workshop maybe once in 2 to 3 years. Now, the car workshop would really have to do a lot to keep the loyalty of the customer. With such an infrequent visit, loyalty is rare maintaining contact and customer engagement is a real challenge.

Even when the customer visits, the required services are pretty simple and straightforward, like a change of brake pads, some around-the-wheel checks and greasing, the entire service job probably would not even take more than a half hour. So these workshops need to throw in a lot more of free inspection, like lights, batteries, entertainment system, navigation tools, other IoT tools hopefully.

In the very long term, when motors fail, you replace them with new ones. Batteries fail, you replace. When there is software upgrade, independent workshops cannot do the work, customer have to go back to the authorized dealers. Diagnosis of any kind would be via proprietary diagnostic tools, so what is left for the car workshop?

Do not be frightened by this thought, friends. Go ahead and run your vehicle workshops with no fear, keep the passion, because this would not look like happening in the next 20 years. What happens after 20 years, you worry later.

Cheers.