Life has not become easier for many independent vehicle workshops recently. For years, environmental premiums, e-mobility and ever-increasing requirements for workshop equipment and further training have resulted in higher costs and generally lower turnover. However, the supply bottlenecks for new vehicles now - and in the future - will relieve the strain in many places.
The dilemma started in 2009 with the so-called "scrappage premium". Under certain conditions, the state measure promised a premium of 2,500 euros for vehicle owners who had their car scrapped and purchased a new car. As drivers of new vehicles generally have service work and repairs carried out in the contract workshop, the turnover of independent automotive companies reduced.
The situation is currently not being made any easier by the new electric car premium. On the contrary: The run on hybrids and fully electric cars is having a double impact on workshops, with even longer-lasting implications than the "scrappage premium". Many drivers of older cars are switching to new electric vehicles. And because the maintenance costs of electric cars are significantly lower than those with conventional drives, this turnover will also fall in the long term.
But there is now some good news for independent vehicle workshops. Due to the worldwide shortage of chips, customers are currently facing extremely long wait times for new cars in some cases. Many new vehicles currently have a lead time of around 12 months.
Used car boom leads to higher turnover in automotive workshops
While this is bad news for car manufacturers, new car dealers and buyers of new cars, it is having a positive impact for used car dealers and independent car workshops. In view of the long wait times, many drivers are choosing to buy used cars. New vehicle trade was often left out in the cold and recorded heavy losses: In 2021, new vehicle sales reduced by around a quarter compared to the figures before coronavirus. It's a completely different story for used car dealerships: Car dealers are already talking about a used car boom.
The consequence: The average vehicle age of the entire vehicle stock will continue to increase. The average age is already at 10 years and is continuing to rise. This is great news for the independent aftermarket. The older the vehicle, the less frequently the contract workshop is used and the more turnover can be generated by independent companies with wear and repairs. Many workshop owners cannot confirm the supply bottlenecks for spare parts that we are hearing about from time to time.
Reduced mileage dampening the mood
So it's all positive? Well, not really. At its annual press conference in 2022, the ZDK (Association of the German Motor Vehicle Trade) reported a further reduction in turnover: "In the Service and Repair business, 2021 saw a decline in turnover of minus 5.8 percent compared to 2020. The ratio of the average workshop capacity was 80 percent and thus one percentage point above the level of 2020, but still 3 percentage points lower than the value of the pre-crisis year 2019." The problem is still primarily due to the coronavirus-related reduction in annual mileage, that does not help to increase the service and maintenance potential.
However, with respect to the chip shortage, experts do not expect the situation to improve significantly in 2022. This means that used car trade will continue to enjoy considerable popularity.