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Automotive parts, tires and services move online

Published May 23, 2014

Business Driver

For the past year or so, I have been researching the impact of digitization on how cars and parts are sold and purchased.

Earlier in this column, I have talked about how Internet and mobile platforms are changing the way customers get their initial impressions of an automotive brand or car, how dealers generate leads for prospective customers, and ultimately how various transactions in the auto biz are initiated or completed.

But, the brave new world of connectivity is also slowly changing how cars are serviced. These transformations not only impact customers, but are also altering the way repair services are being offered to drivers.

These new modes of vehicle service are still limited to certain niche markets, primarily in Europe and the U.S. Here are five examples that I think have the potential to grow beyond its current fledgling status:

Mobile service: Body-shop mechanics performing minor paint touchups or collision repair at a customer location have been around for a while.

In Canada, these are primarily small businesses that often have limited area coverage and prefer cash transactions.

Things are a little different in Europe, as many major service chains and online parts retailers are using mobile service crews to offer added convenience to customers, particularly for tire installation.

U.K.’s Kwik-Fit is one traditional competitor that allows vehicle owners the option of purchasing tires online and getting them delivered and fitted at home.

French online tire retailer Allopneus has found great success in rural areas, particularly those locations that have no easy access to service shops.

Independent service network: Western Europeans, particularly those in Germany and France, are increasingly buying their tires online. In fact, nearly half of all online automotive parts sales revenue comes from tires.

But, many of the online tire websites do not have their own physical network. These companies are therefore working closely with independent garages.

These service shops essentially act as a surrogate franchise network. Customers purchase their tires online and then have a choice of getting their tires delivered to these shops and installed.

The arrangement is a win-win for all concerned — the Internet retailer is able to overcome one of its key competitive disadvantages compared to traditional service chains, while independent service shops are able to secure steady traffic to their locations without any significant change in marketing costs.

Over-the-air updates: Brake jobs and oil changes aren’t going anywhere anytime soon, but as electronics invade our cars, remote fixes may become more common.

Case in point: faced with a recall over some of its engines catching fire, Tesla rolled out an over-the-air firmware update that will allow its Model S cars to automatically reduce amperage if heating is detected.

The company was also able to introduce a remote update when one of its customers complained about a slight rollback problem.

Companies such as Chrysler and Mercedes-Benz are also tinkering with remote updates, although, in the short term, most of these changes may be limited to bringing infotainment software up to speed.

Service aggregators: It’s tough finding a good mechanic or service shop. That’s where websites such as RepairPal and AutoMD come in.

These third-party platforms can be best described as a TripAdvisor for the automotive service world. They provide cost ranges for particular repair jobs, approximate costs at individual repair shops, and peer reviews of previous work done by these garages, among other features.

In certain cases, a potential customer could even get a live quote from one of the participating shops.

Collaborative bricks and clicks: U.K.-based online tire retailer Blackcircles — with revenues of about $50 million (Canadian) — needed to develop some sort of a physical footprint to draw in customers.

British grocery giant Tesco needed to find new ways to grow its business.

In order to meet their individual goals, the two companies recently joined forces to launch an express tire-fitting service called Pit Stop at select Tesco locations.

A customer can now buy tires through Blackcircles and get them picked up and installed at a Tesco Pit Stop, while doing his or her groceries.

Kumar Saha is a Toronto-based automotive analyst with the global research firm Frost & Sullivan. Email wheels@thestar.ca.

The Toronto Star for Wheels.ca

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