Every year a new car comes to market with something that cars have never had before, like a special fastener or a new power accessory or a new type of transmission. Every year people need new tools to deal with that new technology, and the industry responds. This has been going on since the second car was built, but over the last couple of decades, automotive technology has changed more radically than ever, and the pace of change is also increasing.
From talking with shop owners at tradeshows and online forums, it’s clear that these changes are pressuring people to re-examine their business.
A shop owner in Colorado said that, as a result of new technology, “it’s getting much more difficult for the average shop to be cost-efficient, productive and profitable.” He described a situation where a vehicle needed a repair that requires initializing a door module, so the vehicle’s computer would recognize and respond to the window switches. The job requires a manufacturer’s scan tool, which is readily available, but there aren’t many of that particular brand of vehicle in his town. If his shop were in a major city, there would probably be a dealership or another shop in the area that owns the scan tool and could initialize the module for him. But he’s in a small rural town, and even though he runs a well-equipped and capable shop, he can’t justify the expense of owning the OE scan tool to service just a few cars a year. His only option was to send the customer away.
He has visions of turning his business into a specialty shop that works on only a handful of the most common brands and doing only maintenance work instead of repairs. This will limit his costs for tooling and training while making it easier to be productive and make money.
It’s not just independents thinking this way. I found a dealership in Illinois that doesn’t have a driveability tech. Since the shop does mostly warranty work, which usually involves just changing parts, the service manager has decided not to invest in training and tooling for a capability that he’ll use only a few times a year. He farms out his driveability diagnostics.
These two examples demonstrate how changing technology can influence the automotive service business. But no matter how radically the business model changes, somebody will still need the new tools.