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Profitability and Digitization: trends and challenges of the auto workshop business in Spain

Trends

July 19, 2023

9 MIN of Reading

The Spanish workshop market is regularly monitored by Tips4y's Marketing, taking into account the geographical proximity that unites us, in order to analyze the impact of the main trends in the automotive aftermarket and how professionals prepare for future challenges.

It is under this assumption that we share two topics of enormous relevance for the workshop market in Spain – Digitization and Profitability – addressed in different contexts, but which complement each other in practice at a strategic and operational level.

THE DIGITALIZATION OF THE WORKSHOP

"The more and better digitalized workshops are more efficient and profitable."

This was the main conclusion of the Lample Convention 2023, organised by one of the leading parts distributors in the Spanish market, a member of Groupauto Unión Ibérica (GAUIb), which brought together around a hundred workshops for a working session dedicated to the current reality of the automotive aftermarket, analysing the main trends and challenges of the workshop business model.

A plan of action focused on innovation was presented to help workshops improve their competitive position in the market, highlighting the growing importance of digitalizing workshop processes for repair businesses.

In fact, the more digitalized workshops are more efficient and profitable, because they attract and retain more and better customers, while also sustainably improving their relationship with all other stakeholders (partners, suppliers, shareholders, etc.).

THE PROFITABILITY OF THE WORKSHOP BUSINESS

"More activity does not mean more profitability"

The annual meeting of the Avanza Motor gathered the 5 main representative associations of Spanish workshops: Cetraa, Conepa, Ganvam, Faconauto, and Fagenauto, with the objective of analyzing the impact of new mobility trends for the workshop of the future.

It was mentioned that operational activity in 2022 reached 2019 numbers but with a drop in revenue due to a situation marked by the lack of replacement parts, which resulted in a longer vehicle stay in the workshop, as well as in price increase of materials and fuels.

In turn, those responsible at Ganvam and Fagenauto highlight the inability of Workshops and Networks to manage the increase in costs, namely passing them on to customers.

The conservative perspective of the sector was demonstrated in the results of the survey to 300 workshops, shared at the Avanza Motor event, where the main concern of the workshops is the technical part, and only afterwards the focus on the customer, with the management of processes (including digitalization and its efficiency) coming last:

"Professionals see themselves first as mechanics,
who want to repair as many vehicles as possible,
rather than as entrepreneurs focused on profiting from the interventions they perform. ”
Raúl González, Communication Consultant, who presented the study

This question reinforces the message and conclusions shared in a previous article by Tips4y about the importance of digitization as an incremental factor in sales in the workshop.

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