Fleet Assist has highlighted the necessity for garages to prioritise “exceptional” service, implement smart charging structures, and embrace technology-driven innovations to ensure their continued viability.

The advice follows the release of Fleet Assist’s analysis comparing the service costs of internal combustion engine (ICE) vehicles and battery electric vehicles (BEVs).

Fleet Assist analysis revealed that a typical collection of minor service parts for BEVs costs 18% less than for ICE vehicles, with fluid costs showing a 70% reduction.  

The disparity is even starker for major services, with parts and fluids costing 58% and 63% less for BEVs compared to their ICE counterparts.

As the automotive market shifts towards higher BEV service volumes, the entire garage service, maintenance, and repair (SMR) ecosystem is experiencing pressure due to diminished average invoice values.  

The revenue declines coincide with increasing challenges for garages, including higher minimum wages, rising property rents, and the need for additional investment in workshops to accommodate the latest BEV models. 

Fleet Assist supply chain director Nikos Kotrozos said: “With a background of profit warnings from franchised garages, the fleet industry’s aftersales SMR fulfilment will continue the paradigm shift that is underway. The possibility of introducing smart pricing for services such as delivery and collection in exchange for a reduction in other fees could be one way of maintaining revenue and margins whilst not diluting customer service.

“The trends and future SMR forecasts highlight the requirements for garages to embrace and invest in new technology-led solutions ranging from vehicle diagnostic upgrades to parts ordering systems.”

Furthermore, data shared with the Vehicle Remarketing Association (VRA) predicts a 74% decline in aftersales gross profits for dealerships in a fully electric vehicle scenario. 

Kotrozos emphasised that making strategic investments for the future is crucial, explaining that while AI solutions and short-term pricing strategies may offer temporary relief, they are not replacements for skilled technicians nor long-term solutions to the challenges faced.

One strategic move gaining traction is the introduction of mobile service units, reflecting the evolving market landscape.

The focus remains on optimising customer experience and maintaining high compliance standards to meet drivers’ expectations and manage costs effectively. 

Fleet Assist underscored the role of fleet and leasing companies in supporting its network of 5,200 garage sites and more than 500 mobile service units to sustain a viable business model.

Kotrozos concluded: “The winners will be contract hire, leasing and rental customers that optimise their garage network management driven by quality business data and intelligence. Operational excellence and supply chain integration are both must-haves and when combined will achieve quantifiable long-term opportunities to manage costs, reduce lead times and improve job completion turnaround times.”