To me, I simplified it down to one single fact : VALUE FOR MONEY.
Though value for money differs for different market segment, that is why it is important to understand one’s market. For the majority, online wins on convenience and price, saving the time to travel to shop, able to buy at one’s convenience on the mobile device, plus the chance to search for the cheapest. Offline, on the other hand, wins on service and quality. It must be a place where a person look forward to going as part of their favorite past time. On this Ito Yokado Chengdu is an all time winner. In fact, it has been winning in chengdu over the last 20 years. As a merchant, it is important to go for both, also why not. But if you are in the food business, offline is the key as taste and building a loyal client base is the key factor. veriHUB is fortunate to be able to participate in Ito Yokado's business and culture. We have been invited to setup Nanyang food booth in 5 of the 9 ito Yokado supermarket in Chengdu : 高新,双楠,天赋(食品馆),春熙,绿地. We showcase all our merchants' products made into hot deli ranging from soup in a bottles to laksa, nasi lemak, curry, chili crab, etc. Why offline for veriHUB? Because it is VALUE FOR MONEY of course. Article contributed by : Jason Lim, CEO of veriTAG Pte Ltd.
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Should the growth of Thailand's After Sales services through Used cars dealership or independent28/9/2018 In my earlier posts, I explained and highlighted the current shortage of repair and maintenance services. Total vehicle population has increased by more than 30% since 2011 but the service and repair support network has not kept pace, and this is putting a lot of strain on customer service personnel and PR staff. Of course, the technicians are also under tremendous pressure to deliver both in terms of the service quality as well as timeliness.
Automotive players in Thailand are keenly aware of this imbalance between demand and supply, and are actively taking measures to address this issue. The most significant stakeholder in this must be the OEMs themselves. They have to get the customer satisfaction part right in order to enhance their brands in this cut-throat market. In the car business, we know that the sales department sells the first car but it is the service department that sells the next. OEMs face challenges in the effort to expand the after-sales network, some being external factors not within their control but nonetheless they have to overcome to be successful in their endeavors. Once of them is the shortage of qualified technicians, especially electricians. Thailand’s schools do not produce enough technical graduates that can quickly become productive automotive technicians. The percentage of students in technical courses are far less than those in the social sciences and business schools. Every year Thailand also produces a lot of lawyers but just not enough technician and engineers. As cars become more complex, the industry needs technicians who can diagnose and repair a mal-functioning hill-assist, keyless start, or active cruise control, just to name a few examples. Every new model across all brands introduced comes with more sensors and electrical parts, so for older mechanics they have to be trained and retrained, and younger ones have to be equipped with the necessary skills in order to hit the ground running from day 1. Some OEMs are also challenged by head office cost-cutting policies so they have to raise the dealer network technical capabilities while at the same time maneuvering round the lower budgets, all with very specific and tight deadlines. Imagine a combination of tight deadlines and tight budgets, not hard to see the amount of pressure here. To get round the budget cuts, some OEMs work with third party service providers like TTi and MSXi so that these outsourcing do not appear in the headcounts. However, this adds to the layers of work as the OEMs now also have to manage the relationship with and the work of these third party service providers. Usually, OEM suppliers get included in some of the technical problem solving as the repair issues usually involve them. I will talk more about the difficulties and challenges facing the OEMs when it comes to repair and maintenance service network expansion for the OEMs in a later post, and why I foresee independents as the fastest and most practical short term solution to fill the gap in the current mismatch between car repair and maintenance services demand and supply. The stereotype of the unkempt and sweaty, dirty hands, oil- stained car mechanic has to go.28/9/2018 Last week, while having my lunch break visiting the trade expo Digital Thailand 2018, I received a telephone call from Shanghai. Someone read one of my articles on the recent development of the Thai vehicle after-sales service and wanted to know more to create a market study for a client. I was amazed by this. It is the power of today’s digital technology that allows someone like me to build an audience and quickly reach them, in the hope of positively contributing to the industry’s growth and to make a mark by sharing the information and knowledge I have.
I felt that the focus of the questions asked was on the imminent changes, or signs of change, of the way Thai vehicle service centers are set up and run. For this benefit, let me name a few which I have observed. First, modern day car mechanics spend lesser time on the bolts, nuts and screws on the car, and more time on the various electronic devices. This slowly debunks the stereotype of a sweaty, oil-stained car mechanic in overalls, replaced by a clean, neat, customer-facing car mechanic with an electronic device in hand working on the car. It is not uncommon now for a car mechanic to spend almost half of their productive hours (that is, billable hours), working on a digital tool, doing software upgrades, scanning for trouble codes, linking up to OEM service database in search of solutions, even looking up Youtube for answers. Second, with OBD2 dongles becoming easily accessible and purchased (you can order a USD50 dongle online that works very well), more and more customers, especially the lady drivers, will come into the workshop equipped with knowledge and information, and ask very specific technical questions, like I have a check engine light on and my OBD says intake air issue, could be clocked up throttle valve, so these car drivers cannot be fooled as easily as before. Thus, the trend of the future is more informed customers. Third, the service centers will know more and more about you. By 2020, many Mercedes Benz cars will have internet-enabled electronic computer units (ECUs) that link to the customer assistance centers in the respective countries. From the ECUs, the customer assistance centers can advise the car owners of maintenance service schedules, diagnose car problems remotely through this access to the ECU, store historical data over cloud, and perform a lot more functions. Fourth, independent vehicle workshops have to continuously upgrade their skills to handle hybrids and electric vehicles. This requires a change in attitude of the workshop operators and a willingness to invest in the business for the long run. The technological advancements are coming fast and furious and the need for skills development and upgrade cannot be over-emphasized. On top of that, the workshops also have to be adequately equipped to handle the electric cars and hybrids, and presently most car workshops in Thailand are not ready. Fifth, we shall witness the growing power of the component suppliers, where more and more of them will either go it alone or partner with service center operators to establish a much wider service network, and reduce their reliance on the car manufacturers. You can see that most of the car components come from a shared technoloy and supply base. This trend is not slowing down, and is increasingly so, and what you have under the hood of the car, in the cabin, on the dashboard, they are all supplied by third party suppliers. Of course, these component makers also supply to other brands as well, so there is a lot of shared components among brands. Taking advantage of this, component makers are increasingly becoming more vocal about their expertise over the car makers, and are setting up their own workshops focusing on their products. Some examples are turbo charger repairs, service and replacement, air con units, ABS units, transmission repairs and rebuilts, sensor replacements, and soon electric car batteries. It is my view that the vehicle after-market services will soon undergo tremendous disruption, and this offers a great opportunity for new players to come in with the new game plan and new way of serving customers. There is a gap in the market. A car workshop capable of providing detailed and comprehensive work with transparent pricing in a comfortable environment with working table, free wifi, refreshment, that can handle not just routine servicing but also general repairs, is lacking in Thailand. Throw in the convenience of key drop, pre-appointments, and a “chat-to-buy” technical consultation service and we can clearly differentiate ourselves from the competition. As most of the so-called repair shops are in fact tire shops, that additional service tend to be what we call “around-the-wheel” services like brake pads, brake discs, suspensions, and perhaps tie-rods and stabilizer bars. Tire balancing, wheel alignment, nitrogen filling, those would be generally considered as standards. The difference arises when it comes to the drive trains as most of these stores do not handle any form of diagnosis and thus will not have diagnostic scanning tools at their disposal. This means that they rule out handling any form of drive train issues and repairs. To capitalize on this lack of availability, a workshop can be set up that can conduct general drive train diagnosis. The most common types relate to air flow efficiency. The other potential area is in the service and maintenance of hybrid cars. More car makes have introduced hybrids, to name a few we have BMW, Mercedes Benz, Honda, Toyota and Nissan, and the market expects more in the near future. These hybrids require insulated tools which most independent car workshops do not have. When it comes to air con gas recovery and topping up, the air con machine needs to run on special oil that do not conduct electricity, with its own compressor to run it. This is one area which independents can include to entice the hybrid car owners away from the dealership workshops. For maintenance service, throttle body cleaning which is common in other markets is practically non-existent here, so this is something that the workshop can introduce and explain to the customers the importance of such maintenance work and how it can help to extend the life of the car and bring down running costs. What, really, is a connected car?
In my earlier piece of writing, I talked about major global automotive technology providers moving away from the more traditional automotive service and repair tools and equipment and the related technology, more and more positioning themselves for the advent of the connected car. The feedback to the blog was coming in fast and furious, and surprisingly to me, the most common comment was actually a question one way or another asking me to define what I mean by a connected car. Simple as it may sound, a connected car can actually mean different things to different people. Thus, to make things clearer here, I shall define the connected car as connection both within the car itself, and car-to-car and car-to-other devices. Now, with this much broader definition, the scope of discussion becomes much wider. For in-car connectivity, we are talking about enhancing the connectivity within the car through the various sensors, processors and actuators. To make things simpler, let me cite one example which is already in place, and to which it can be further developed for greater connectivity. That example is the maintenance service reminder on the car’s dashboard. 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. How to maximize dealer profits in the world’s largest automotive market
Much has been written about China’s explosive automotive market and sensational overtaking of the US to become the world’s largest automotive market. In fact, according to the China Car Times, more cars were sold in China last year than in any other country at any time in history. However, the sentiments for 2011 is not as rosy as the government put on brakes on the growth of the automotive industry, including limiting the number of new cars that can be put on the road of Beijing and putting an end to the sales tax reduction stimulation effort. There are serious implications to the bottom-line of the car dealerships and some reports even forecasted that 30-40 car dealers in Beijing will go out of business in the next 2 years. Before such dramatic measures were taken, the car dealers have already started to feel the tremendous pressure on their profit margins. The hey days of 10-20% gross margins may be over. Despite the exponential growth of the car sales, the dealer network was growing at an even faster pace so competition has been intensifying at this time. There is, however, still a lot of room for growth, particularly dealer groups who can extend their reach to the 2nd and 3rd tier cities. In fact, these markets have started to become the backbone of the automotive growth in China, and with less competition also comes less downward pressure on sales margins. The other huge growth potential will come from dealers broadening their revenue base to cover used car trading, F&I, accessories and merchandise, and becoming far more efficient. Operational efficiency allows the car dealers to spend less for each sales lead, bring down the cost per prospect, gain better ROI for each marketing dollar spent, reduce the total transaction costs for each sale, earn more from each service customer, minimize fraud and leakages, achieve higher inventory turnover, make better forecasts and inventory management, drive down warranty wastes, increase customer loyalty and hence repeat business. Efficient dealers will rule the industry in the future. How can a dealer become truly efficient? Our proposition is that the operator should become tech-savvy, adopt tech-based auto solutions as business enabling tools. Without the tools, you will face strong resistance from your people and so your objectives for efficiency cannot be achieved. In our series, we will present our model for efficiency in each stage of the business process, starting with leads generation. We are very eager to show you how you can leverage on the latest technology for network marketing at relatively low costs to complement what you already have in your arsenal. Throw us any comments if you have any. We love the challenges . New implementation of vehicle emission system - 2018 |
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