Aftersales has long been a cornerstone of profitability for automotive companies, contributing up to 40% of total profits, as industry estimates suggest. Despite its considerable market value of around €500 billion, aftersales often takes a backseat to the spotlight of new car sales. However, as electrification, connectivity, and digitalisation redefine the industry, aftersales is now emerging as a critical area of focus for dealerships.
With increasing regulatory challenges, especially in finance and insurance (F&I) products, and a more competitive landscape, aftersales has become essential for maintaining profitability and relevance. To keep up with these sweeping changes, dealerships must innovate their aftersales strategies, with artificial intelligence (AI) leading the charge. By improving efficiency and meeting evolving customer expectations, AI ensures long-term profitability in this transformative era.
Using AI to Outpace New Competitors
Customer loyalty to dealerships for routine servicing is no longer guaranteed. The rise of electric vehicles (EVs) and new competitors, including independent repair shops and agile startups, has intensified the competition in aftersales. To stay ahead, dealerships must rethink their approach.
AI is revolutionising aftersales by leveraging vast amounts of customer and vehicle data to generate actionable insights. It can process millions of profiles and billions of data points to make accurate predictions, enabling businesses to refine their strategies and performance.
MotorK’s analysis highlights the impact of AI in aftersales campaigns, which deliver an 8% to 10% conversion rate to invoice. For dealerships, this translates into a 25%–30% increase in online-attributed aftersales services and accessory sales, underscoring the power of personalised, data-driven outreach strategies.
Navigating Regulatory Pressures in F&I
Regulatory challenges, particularly in the F&I segment, are reshaping the automotive industry. New regulations like the EU’s Consumer Credit Directive (CCD-II) will introduce stricter oversight, potentially squeezing profit margins.
To mitigate these pressures, a renewed focus on aftersales is critical. By fostering long-term customer relationships and implementing AI-driven strategies, businesses can create sustainable revenue streams. Advanced AI tools not only boost efficiency but also support compliance by delivering robust data insights and automating complex processes.
Unlocking Opportunities with EVs
The shift toward EVs and connected vehicles presents unique challenges and opportunities for aftersales. While technologies like over-the-air (OTA) updates and remote diagnostics may reduce the frequency of traditional maintenance, they also bring a new demand for specialised services.
AI-powered platforms can manage the vast data generated by connected vehicles, enabling dealerships to monitor vehicles in real time and address potential issues proactively. This capability reduces unexpected breakdowns, enhances customer satisfaction, and optimises inventory and workforce management based on live vehicle data.
Adapting in a Fragmented Market
The aftersales market is increasingly fragmented, with new entrants such as independent repairers, digital-first providers, and EV startups vying for market share. OEMs and dealerships must adapt quickly to retain customers in this competitive environment.
AI is not just a tool for operational efficiency—it’s reshaping the aftersales experience to align with modern customer expectations. By adopting a lifecycle-focused approach that emphasises post-purchase experiences, businesses can secure profitability and loyalty.
Dealerships that fully embrace AI in their aftersales strategies will thrive in this evolving landscape. With AI as a driving force, aftersales can truly become the industry’s profit-driving powerhouse.
Conclusion
The Road Ahead with AI-Driven Aftersales
In this era of transformation, AI is redefining the aftersales landscape. It empowers dealerships to:
- Compete effectively with new entrants.
- Navigate regulatory pressures seamlessly.
- Maximise the opportunities presented by EVs and connected vehicles.
- Deliver a customer experience that fosters loyalty and drives profitability.
Ready to transform your aftersales strategy?
