SMMT study reveals British car owners spend an average £695 (Rs 68,000) on car maintenance every year – around 12% higher than the average global spend per car of £621 (Rs 60,500).
07 Jun 2016 | 3891 Views | By Autocar Professional Bureau
British cars are among the best maintained in the world, with UK motorists spending a collective £21.1 billion (Rs 205,400 crore) a year on servicing and repair, according to a new report by the Society of Motor Manufacturers and Traders (SMMT).
The report ‘The Importance of the Aftermarket to ...
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British cars are among the best maintained in the world, with UK motorists spending a collective £21.1 billion (Rs 205,400 crore) a year on servicing and repair, according to a new report by the Society of Motor Manufacturers and Traders (SMMT).
The report ‘The Importance of the Aftermarket to the UK Economy’ commissioned by SMMT from independent research consultancy Frost & Sullivan, is the first official industry analysis of the UK automotive aftermarket.
The study reveals that UK consumers spend an average £695.39 (Rs 68,000) on car maintenance every year – around 12% higher than the average global spend per car of £621.62 (Rs 60,500). The report also states that compared with other markets there are fewer cars in disrepair, generating excess pollution or needing new brakes on British roads.
With a strong franchised dealer network and the largest share of work carried out by independently owned businesses in Europe at 64%, the UK aftermarket offers consumers a wide choice of where and how they have their cars serviced – and how much they spend. Parts and labour costs at independent outlets can be up to 65% and 45% lower respectively.
The report also reveals the significant economic contribution made by the UK automotive aftermarket, which delivers an annual £12.2 billion (Rs 118,750 crore) direct to the UK economy and supports more than 345,000 British jobs. As the number and age of vehicles on UK roads increases, thanks to a healthy new car market, improving quality and more advanced servicing techniques, by 2022 the UK aftermarket is projected to be worth some £28 billion (Rs 272,550 crore) with an employee base of around 400,000.
The report’s findings come as the first ever Automechanika aftermarket trade show in the UK opens at Birmingham’s NEC. The exhibition brand already has a presence in 14 markets and the UK market is the latest as a key investment destination.
Mike Hawes, Chief Executive, SMMT said, “The UK’s aftermarket is one of the most competitive in the world and plays a critical role in keeping Britain’s 30 million-plus cars roadworthy. Robust competition and a strong independent sector have helped reduce the cost of vehicle ownership in the UK and provided greater choice to consumers. For this growth to be sustained, however, the sector must stay abreast of evolving vehicle technologies and changing mobility patterns.”
The UK aftermarket is already the fourth largest in Europe by size, with more than 30 million vehicles in use requiring regular servicing and maintenance work, and it is set to overtake France to take third place by 2022. By the same measure, it is also the eighth largest sector of its kind in the world; bigger than those in Brazil, Korea, Canada, and even India.
The way people buy and use cars is also changing rapidly which, according to the report, presents the aftermarket with both opportunities and challenges. The shift from outright vehicle purchase to leasing and a longer-term trend from car ownership to ‘usership’ will require new business models, while the new era of vehicle connectivity will also present opportunities for businesses prepared to embrace technological change.
The digitisation of retailing is also having an impact on the way consumers’ needs are served, with motorists increasingly using the internet to compare prices and products and schedule maintenance work. The UK aftermarket is well placed to respond, with the highest penetration of online retail for automotive parts and services at 7%, ahead of Germany and France at 5% and 4% respectively.
The report calls for a greater emphasis on investment in skills and equipment to ensure the aftermarket responds to increasingly complex vehicle technologies, as well as maintenance of competition regulation to ensure consumers continue to benefit from choice, convenience and competitive prices.
Also read: Rs 2,200 crore investment expected by UK supply chain by 2020