New Motor Ombudsman survey reveals biggest operational challenge for vehicle repairers
A new poll conducted by the Motor Ombudsman sought to uncover the biggest operational risk that could impact vehicle repairers in 2023 – and the answer keeps coming back to rising expenses.
The regulatory body surveyed independent garages and franchise dealer workshops, finding that 90% of the businesses had indicated that rising operational costs, taxes and energy bills would be their biggest challenge in 2023. The Motor Ombudsman noted that while this issue is nothing new, the number of respondents who answered such had increased from last year’s poll, which saw 64% of respondents say that paying more for utilities and higher costs reduced their overall business profitability in 2022.
In addition to increased concerns over operational costs, the survey found that 63% of businesses said that they will have to contend with motorists putting off essential repairs to their vehicle due to their restricted household incomes. In the same vein, 59% said that paying more for replacement car components due to shortages and inflation would be another trying factor.
Other key findings of the report include:
- 31% of auto repairers said that customer retention would be a challenge this year
- 29% of garages and workshops explained that generating new business may be difficult in 2023
- 57% said that fewer customers can afford routine vehicle maintenance in 2023, affecting customer footfall and revenues
- 49% said that they will be looking to avoid passing on higher operating costs in the prices charged to customers due to the difficult economic climate
- When asked about the difficulty in recruiting qualified staff in 2023, 43% said that adding experienced technicians to their team would continue be a challenge – but this was a slight improvement from the 50% of repairers who had indicated that they struggled to recruit in 2022
- 32% of workshops said that electric vehicles (EV) would provide less scope for additional revenue and aftermarket opportunities in 2023
- However, 44% still plan to invest in staff training on EVs, while another 22% indicated that they would be looking to introduce or add charging points at their premises
“Following the festive break, it is a case of picking up from where we left off in 2022, as the findings from our research show that garages and workshops will have to contend with a multitude of challenges this year,” said Motor Ombudsman chief ombudsman and managing director Bill Fennell. “At the forefront of these will be navigating a rise in operational costs at a time when many consumers are feeling the strain on their finances, meaning vehicle maintenance and repairs could take a back seat.”
Fennell added that as the economic challenges show little sign of slowing down in the short term, maintaining competitiveness, customer retention, and finding new revenue channels would be crucial to auto repairers to deliver a positive bottom line.
The issues identified by the Motor Ombudsman’s report are nothing new. In a trading update on its first half-year results for 2022, Sabre Insurance Group Plc noted that the increase in claims inflation impacted all drivers of claims cost – including parts, labour, credit hire, paint, car values and availability, and provision of care.