Trend Tracker has records of servicing retention by make of car going back to 1994. This period includes the general move by vehicle manufacturers from a one-year new car warranty to three years back in 1998. Trend Tracker analysed the servicing retention benefits realised by franchised dealers from this improvement in warranty terms and applied the same logic to Toyota. The analysis demonstrated that Toyota dealers can expect a minimum of seven per cent more service department business once the effects of the five-year warranty work through.

Trend Tracker’s lead aftermarket analyst, Chris Oakham, said: “Of course it will take five years for every Toyota up to five years old to be covered by the manufacturer’s warranty. Once this point is reached, Toyota dealers will see the full benefits of increased retention of workshop business.

“Clearly, by extending a new-car warranty to five years, there is loss of retail business to the warranty account. However, wear and tear replacements - and routine servicing – will still be paid for by motorists, and Toyota dealers will increase their share of this lucrative work as a result of the five-year warranty.”

Toyota service departments could also see a more immediate benefit if new car buyers find the five-year warranty attractive enough to boost Toyota’s new car sales. This will increase the number of Toyotas under four years old, the age group that Trend Tracker’s historic data shows to be the core market for dealers’ workshops.

Chris Oakham

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electic vehicles car servicing

Headline findings from this latest report include:

- As in Trend Tracker’s 2008 survey, Honda drivers are still the most loyal to the dealers for the make when it comes to having their cars serviced. Honda dealers successfully retained the custom of 39.5 per cent of Honda cars of all ages for servicing in 2009. Combined, the dealers for the prestige German makes - Audi, BMW and Mercedes-Benz – retained the servicing custom of 38.8% of these brands’ drivers. Toyota dealers also recorded a well-above average performance in 2009 by retaining 35.6% of its owners for routine servicing.

- At the bottom end of the routine servicing loyalty table, only 16.1% of Rover and MG owners said they used the dealer for their make to service their car (the XPart network took on support for the brands’ dealers after the demise of MG Rover in 2005). Fiat dealers retained a lowly 16.7% and the Nissan network 22.9%.

- Most other makes surveyed were much nearer the all-marques average dealer-for-make servicing retention of 27.8%.

- Conversely, half of the Rover and MG owners surveyed had used independent garages for their last car service (50%), while at the other end of the scale only 31.7% of all Honda owners had used an independent garage. 45.2% of Fiat owners had used an independent garage. Across all brands and ages of cars surveyed, independent garages accounted for 38.4% of all services carried out.

- Since 1995, Trend Tracker’s research into the retail car service and repair market has regularly measured the popularity of DIY servicing. In 2009 only 8.2% of motorists said they carried out their last service themselves, or had it done by a friend or relative.

- Declining overall demand for car servicing is another trend tracked by this Car Service and Repair Trend Tracker Update 2010. The ever-improving build quality of new cars, and extended servicing intervals, mean that 17.5% of all motorists surveyed had not yet had their cars serviced.

Repairs

Besides being asked for information on routine servicing, the latest (2009) 17,000-strong sample of motorists was asked if they had had a repair or MOT test carried out to their car in the last month, and if so, what type of repair, and who carried out the work. Across all 14 marques surveyed, 13.3% of motorists quizzed had some type of work carried out in the previous month – a service, MOT or repair(s). Of those, 57.4% had required repairs to be completed on their car.

The variations between marques in terms of how many cars had work of any kind carried out fell within a range of six percentage points, between the low of Toyota (11.2%) and the high of the Fiat Group (17.7%). When the service/MOT/repairs figures were broken down by make of car (not by age, for reasons of sample size), Hondas required the least repairs, and Fiats the most with 73.5% of Fiat owners who had any work done in the last month needing repairs - against 37.1% of Honda owners and 39.5% of Toyota owners.

Trend Tracker director and analyst Chris Oakham commented: “Franchised dealers depend heavily on aftersales service and repairs for their profitability, while their manufacturers naturally hope to offer customers trouble-free motoring. To secure repeat custom, manufacturers need to cut dealer visits to the minimum, while their dealers need to focus relentlessly on matching the value for money offered by independents and fast-fits on the increasingly infrequent occasions when they can expect to see their customers’ cars.”

Oakham added, “Facing a dearth of young cars needing attention since the economic crisis hit new car sales, dealers will need to redouble their efforts to attract service/repair custom from owners of cars over four years old. However, last year our sample of motorists showed independents did over half (51.3%) the work, while the average dealer for the make did only 24.3% of it, and fast-fits 7.1%.

“MOT tests comprise 34.1% of all jobs our respondents had done, which, of course, often trigger repair jobs and parts replacement. Independent garages did almost half (47.6%) of our respondents’ MOT tests, while the dealers for the makes concerned did only 25.2% of them.”

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electic vehicles car servicing

The report also measures how well franchised dealer networks, independent garages and fast-fits have fared in attracting custom from the owners of different car brands in the last two years.

Headline findings from this latest report include:

- Although the number of cars in use in the UK grew by 13% in the last decade, it shrank by 0.7%, 2008/2009. This is the first time the number of cars on UK roads has fallen since the Second World War and will have an adverse effect on the retail car service and repair market. Motorists are also driving less according to the National Travel Survey with average annual mileage down by 9% between 1998 and 2008 to 13,985 km per year (8,740 miles), while improvements in vehicle build quality have eroded retail service and repair demand by 3-4% per year, along with extended service intervals and reduced work content per service.

- At current prices, the value of the retail car service and repair market increased over the past decade by two per cent. One positive driver in this respect has been increases in labour charges by workshops, designed to compensate both for inflation and a reduction in the work available to workshops. From 1999 to 2009, franchised dealers’ labour rate increases exceeded inflation by 36%, while independent garages raised their charges by a more modest 15% above the Retail Prices Index (RPI).

- But these labour rate hikes have not been able to offset the decline in demand for retail car servicing and repair in the first decade of the new century. In real terms, the value of the retail car service and repair market – including private motorists and businesses - dropped by 21% from 1999 to £7.70 billion last year, while the number of services and repairs carried out dropped 17% from 55.9 million to 46.6 million.

- Back in 1999, garages could count on motorists paying for an average 2.04 transactions a year. By last year, this had dropped to an estimated 1.50 transactions yearly.

- This decline in demand has already taken its toll on the providers of servicing and repairs. Today’s UK motorists now have one-third fewer garages to choose from – 20,195, down from over 30,000 in 1999.

- Across all brands and ages of car, 27.8% of all motorists interviewed for this latest Trend Tracker report had used the franchised dealer for their make of car for the last routine service undertaken, down from 28.4% in 2008. Across all franchises, dealers slightly improved their retention of servicing for own-brand cars up to four years old, from 53.3% to 53.9%.

- Looking at the whole range of service, maintenance and repairs – and not just routine servicing – independent garage workshops carried out 51.3% of all retail servicing, MOTs and repairs in 2009, franchised dealers accounted for 26.3%, and fast-fits for 7.1%.

- In part due to the labour rate increases mentioned above, franchised dealers gained share in terms of retail service and repair market value between 1999 and 2009, from 36% to 45% of the total, including MOT testing. However, franchised dealers appear not to be increasing their penetration of the older car market fast enough to neutralise the effect of extended service intervals, and are vulnerable to further declines in demand.

- The decline in market value and repair demand will continue, and by 2015 Trend Tracker forecasts that retail service and repair demand will be 19% lower than in 1999 in volume, and 25% lower in value (in real terms).

- Franchised dealer workshops will be affected in the medium term by a decline in their principal market – cars up to four years old. Because of weakening new car sales since the peak years of 2003/2004, and especially as a result of the recession, the ‘parc’ of cars aged 0-4 years will fall by 25% by 2012 compared to its peak in 2004/2005.

Toby Procter

Trend Tracker Limited

0870 421 4350

aftermarket report bodyshop market car finance electic vehicles car servicing

No conventional management report, Car Futures - Rethinking the automotive industry beyond the American model - is aimed at policy makers, academics, environmental NGOs, and of course, the industry itself. The authors say, “We hope to shock all of these interest groups at least some of the time as a contribution to the reconstruction of what remains a vital industry.”

Drawing on the history of the auto industry since mass production began in Detroit, the authors argue that the crisis of the once-'Big Three' (GM, Ford, Chrysler) has put in question the whole American business model, copied worldwide, that once underpinned their dominance.

They write in the report's Executive Summary, “There is a mistaken belief among car manufacturers that their activity is the be all and end all of automobility. While there is no car market without somebody making a car, there is no business without somebody making money, and that is where car makers seem to be missing a trick or two. Manufacturers only capture a limited slice of the total automotive value chain.

“New business models for the future would need to capture more of that value chain by integrating assembly, distribution and aftercare. This kind of thinking could also ultimately lead to a more sustainable car industry in economic, social and environmental terms. The current recession with its attendant credit crunch may well accelerate this process of industrial transformation. Many current players have proved to be ill-adapted to the 21st century automotive ecosystem. We may see some radically new business models emerge within the next 10 or 20 years.”

If you are interested in the future shape of the industry, see the Reports pages on this site for more details of this report and how to get hold of it.

25 September 2009

For immediate release

New report shows resilience of £38.1 billion used car market

The latest report from Trend Tracker, The Future of the Used Car Market in Great Britain 2009-2014, shows that demand for used cars in Britain has been remarkably stable compared to the new car market.

Castrol (now Castrol Professional) has sponsored Trend Tracker's reports on the UK market for service, maintenance and repair since 1995 including the latest report - The Castrol Professional Car Service and Repair Trend Tracker 2008. The attached press release, from 2 March 2009, is published by kind permission of Castrol Professional. We believe you will find the contents extremely informative.

Castrol (now Castrol Professional) has sponsored Trend Tracker's reports on the UK market for service, maintenance and repair since 1995 including the latest report - The Castrol Professional Car Service and Repair Trend Tracker 2008. The attached press release, from 4 December 2008, is published by kind permission of Castrol Professional. We believe you will find the contents extremely informative.

Castrol (now Castrol Professional) has sponsored Trend Tracker's reports on the UK market for service, maintenance and repair since 1995 including the latest report - The Castrol Professional Car Service and Repair Trend Tracker 2008. The attached press release, from 11 November 2008, is published by kind permission of Castrol Professional. We believe you will find the contents extremely informative.

For immediate release

New research shows dearth of direct loans hitting car sales

The latest report from the automotive research specialist Trend Tracker - The UK Retail Car Finance Market 2009 - shows just how hard the financing of car purchases has been hit by the credit crunch.

• The value of the UK retail car finance market has fallen by 58% in real terms in the last five years.
• Direct lending has fallen faster than dealer finance.
• The weakness of the car market may combine with their weakened balance sheets to encourage some banks to exit car finance.
• With low interest rates already in place, the return of consumer confidence will be key to the recovery of demand.
• Car finance demand will return over the next five years, but not to its peak level of 2003.

Please download the Word file to see the full press release

For immediate release

BMW dealer staff are highest paid

Employees of BMW dealerships are, on average, the highest paid in the franchised dealer sector, according to the rts Auto Retail Industry Salary Survey 2009, just published.

The rts Auto Retail Industry Salary Survey 2009 analysed the total pay for six franchised dealer jobs - dealer principal, accountant, sales manager, sales executive, service manager and parts manager - across 16 franchises. BMW dealer staff were found to be the highest paid for each of these positions.

The majority of staff working for dealers with other premium franchises - Jaguar, Land Rover and Mercedes-Benz - recorded total salaries in the top fifty per cent (see table below). Ford and Vauxhall dealer staff make a good showing, as do employees of Honda, Toyota/Lexus and Volkswagen/Audi dealerships.

Please download the Word file to see the full press release

For immediate release

Franchised dealers freeze pay as recession bites

Franchised car dealers across the UK have responded to the downturn in the economy by freezing pay scales, according to the rts Auto Retail Industry Salary Survey 2009, published today - 25 November.

The survey reports that 25% of franchised dealers responding to the survey did not increase basic pay for their staff between 2007 and 2008. More than that, it seems that dealers have been taking advantage of the industry's high staff turnover rates to actually reduce pay rates for new recruits.

Comparing the results of the 2008 and 2009 Salary Surveys on a weighted basis across all jobs, the average increase in basic pay worked out at just 1.4% and total pay - including overtime, bonuses and commission - was up 1.6% year-on-year. To put these increases into context, the government's 2008 Annual Survey of Hours and Earnings reports that average total pay for all employees (including full-time and part-time) increased by 3.3% between 2007 and 2008. Therefore franchised dealer employees have probably fared worse than average.

However the increases in basic and total pay were by no means evenly distributed. The two biggest 'winners' amongst full-time staff were Dealer Principals and Bodyshop Managers with basic pay up 4.4% and 3.7% respectively. Vehicle Technicians, whilst seeing basic pay rise, experienced a fall in total pay probably due to a fall in overtime and bonus. Bodyshop Painters/Panel Beaters saw a similar fall in total pay - more than likely for the same reason.

Please download the Word file to see the full press release

Release Date: June 2008

New Trend Tracker mfbi UK Car Body Repair Market report:

Crash repairs fall behind rise in car numbers

The UK car population increased by 18% between 1998 and 2008, but the number of collision repairs to cars rose only 1%, thanks to a 10% decrease in the average distance travelled per car over the same period. That in turn has been caused in part by growth in the number of cars owned per household. As a result of this static market and ongoing margin pressure the UK analyst Trend Tracker forecasts a decline of over one-fifth in the number of bodyshops over the next five years, leading to seasonal shortfalls in repair capacity as soon as 2010.

These are just some of the many facts and figures reported by the latest, 2008 edition of the biennial mfbi study The UK Car Body Repair Market just published by the independent research firm Trend Tracker Limited.

Why the number of repairs has fallen away in relation to the distance travelled by cars is partly due to what many will see as an astonishing rise in insurance write-offs. Annual total losses declared by insurance companies increased by 86% between 1998 and this year, to a total of to 0.79 million, representing 17% of all motor insurance accident damage claims. If claims for theft, glass and personal injury are deducted, write-offs account for virtually a quarter (24%) of claims.

The £6.8bn estimated current value of the UK body repair market is only 4% higher after inflation than in 1998, and the number of accident repairs this year - to 5.78m vehicles - is set to remain below the peak of 5.83m in 1999.

Current average repair costs of £1,175 (including fleet and private cars, excess payments and VAT, but excluding claims for motor theft, glass and personal injury) are in real terms only 3% higher than a decade ago, after cuts in replacement parts prices brought prices down in 2004 and 2005.

The effect of these less than inflationary trends on the bodyshop sector forms a major part of this latest Trend Tracker report. It estimates that there are now 4,010 businesses in operation whose primary work is car body repair, which represents a decline in numbers of 36% since 1998. Bodyshops operated by franchised dealers as opposed to independents have declined faster, by 60%, from 2,200 outlets to just 870 now, with many dealers switching resources to the more profitable business of mechanical repair and servicing.

The shrinking of authorised repair networks by insurance companies is one reason for the decline of bodyshop numbers. Surplus repair capacity enabled insurers to put more work through smaller numbers of larger groups. Another is consumers' preference to have smaller, lower-value repairs carried out without paying insurance excesses and risking no-claims bonuses. These repairs are increasingly carried out by SMART (Small to Medium Area Repair Techniques) repairers rather than by conventional bodyshops, few of which have invested in SMART techniques. This has effectively reduced the volume of the repair market for bodyshops.

This decline in numbers has not led to steady growth in the numbers of large bodyshop groups, as happened over the last decade in the franchised dealer sector, though the top 20 bodyshop groups now operate 196 outlets between them, compared with an estimate of only 40 in 1999. The vast majority of independent bodyshops in the UK are still relatively small, single-site businesses employing fewer than ten staff and repairing up to 20 cars per week - and many of them are at risk of being unable to fund the investment needed to repair vehicles featuring advanced structural materials and electronic equipment.

In stark contrast, the largest bodyshop group, Nationwide Crash Repair Centres, operates 70 outlets, and had sales turnover last of £151.9 million with a healthy net operating margin of 4.3%, comfortably beating most franchised dealers' returns.

The mfbi reports forecasts average repair costs will rise by 17% at 2008 prices, from £1,175 in 2008 to £1,370 over the next five years. That 17% increase in average repair costs combined with a 2% increase in volume repair demand will result in a 19% increase in market value at constant 2008 prices, to £8.09 billion. Within that figure, the proportion of repair costs accounted for by labour and replacement parts will rise as vehicle complexity continues to increase, with premium marques increasingly requiring specialist repair skills and more expensive parts.

The recent introduction of the EU Paint and Products Directive (PPD) and the development of the PAS 125 repair standard will continue to work through the supply structure of the car body repair market as bodyshops, and in particular smaller bodyshops, face the greater investment burden that compliance will require. Consequently, Trend Tracker expects that the number of primary bodyshops operating in the UK car body repair market will decline by 21% between 2008 and 2013, from 4,010 outlets to 3,160. Small bodyshops will experience the sharpest decline, by 37% from 1,930 outlets in 2008 to 1,210 by 2013.

The declining number of repairers, combined with a projected 2% growth in repair demand will have a significant impact on total UK repair capacity. Even taking into account the approximately 0.5m annual repairs capacity provided by SMART repairers, the market will move into absolute repair capacity deficit by 2010. But Trend Tracker analyst Robert Macnab believes this deficit may not result in enhanced labour rates for bodyshops. Most are members of at least one and usually several insurer-authorised networks, and committed to contracted levels of service and labour rates.

Capacity generally only becomes a severe problem for insurers when they are unable to have their non-fault accident claims repaired promptly; otherwise, they can overcome delays by providing non-fault customers with courtesy cars, the costs of which are claimed against the at-fault party's insurer. Moreover, repair capacity shortfalls tend to occur only during the winter peak demand period, when insurers may find an increase in variable claims costs preferable to a fixed cost increase from higher labour rates applying through the year.

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

• Market volume has risen 25% and market value by 68% in last decade to reach 7.73m and £43.5bn in 1996, down 270,000 units/£2.4bn from the peak of 2004.
• Today's average used car price is estimated at £5,625, again down from 2004.
• Market growth is forecast to resume from 2008, to reach 8.33m units and a value of £55.4bn in 2011
• Average used car prices will rise by 18% to £6,650 by 2011
• Independent dealers' market share has risen since from 27% to 34% over the past decade; although on average franchise dealers sell 50% more used cars than 10 years ago, their share has stuck at 28%.
• The number of used car outlets is forecast to fall over the next five years - independent dealer numbers falling by 8% and franchise dealers by 7%.
• On average, independent dealers make bigger profits per used car sale than franchised dealers, despite selling lower-priced cars with lower operational efficiency - because they can control their purchasing and stock profiles.

(use the link above to download the rest of this press release)

• A new report from research firm Trend Tracker Limited on the UK car body repair sector has uncovered a significant investment and skills gap in the body repair industry which could leave many accident-damaged cars repaired in ways that could compromise their crashworthiness.
• Making sure this doesn't happen with potentially fatal consequences to company car drivers could be an important element in fleet managers' risk management, whether or not the impending Corporate Manslaughter Bill proves tougher than the Health & Safety at Work Act when it is passed later this year.
• The warning applies particularly to self-insured fleets which take direct responsibility for vehicle repairs.

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)

(use the link above to download the rest of this press release)