Fleet News

Repair market set to collapse: report

THE dealer repair market is facing collapse due to a massive drop in the amount of repair work and plummeting prices for fleet business.

As a result, in the future, fleets could see a smaller repair network with fewer outlets stretched across the country.

According to a report by market analyst Trend Tracker, fleet service volume has declined by 27% since 1994 and the value of the market has crashed by 23%, even though there are more company cars on the roads.

The report, titled ‘UK car service and mechanical repair market 2005’, said: ‘The declining aftersales demand trends are most acute in the fleet sector, thanks to its high share of increasingly reliable new cars with longer service intervals.

‘An increasing number of fleet cars are being leased with maintenance as part of the contract. Labour rates on these contracts can be much lower than retail rates – even discounted ones.’

But it is the repair work market on fleet cars that shows the most dramatic decline. Costs and the number of jobs have both collapsed.

And of major importance to franchised dealers, the mechanical repair work on fleet cars that is purchased by fleet operators outside maintenance contracts has collapsed.

The average cost of servicing a fleet car has fallen from £174 in 1999 to £169 in 2004, while the average cost of a mechanical repair dropped from £530 in 1999 to £380 in 2004. The report noted that an increasing proportion of new fleet cars require no repairs at all in the first year of their life.

Author of the study, Trend Tracker director Robert Macnab, added: ‘These trends will cut the number of outlets providing car service and repairs by 7% from 24,175 in 2005 to 22,400 in 2010.’

Industry experts believe that the way the franchised dealer network is set up cannot be sustained in its present form, with aftersales work accounting for much of the profit, and suggest a leaner, possibly even mobile, workforce will evolve.

The report also concluded that the number of independent repairers will fall, while commentators believe that increasingly complex technology in new cars is making entry into the market extremely difficult and expensive for non-franchised dealers.

  • More details about the study visit www.trendtracker.co.uk
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