MOTORING | YESTERDAY | TODAY | TOMORROW
chapter 5
MOTORING | YESTERDAY | TODAY | TOMORROW
chapter 5
Alfred Franke: Let me begin by explaining that our storytelling and discussion club has recognized the importance of hearing from experts closely connected to garages, individuals who possess in-depth knowledge of the latest trends and technological solutions.
Krzysztof Oleksowicz: Instead of asking a question, I’d like to suggest a discussion topic, namely: Garages in 2023. What’s next? On the market, there are authorized garages that provide a comprehensive range of services and specialize in a specific brand, and sometimes more than one brand, depending on the company. They have the most advanced tools at their disposal, which, combined with repetitive procedures, makes them highly efficient. There are also chain-associated garages that offer nearly the same range of services as authorized garages. Unlike the latter, these garages handle vehicles of all brands and are generally more accessible to customers. In addition, their owners are usually in person onsite, so the customers get to talk to them directly. We also have large unaffiliated garages that do what the chain garages do. Finally, we have medium and small-sized garages, and it seems that ominous clouds are gathering over them.
These establishments lack the conditions to provide a full range of services, potentially causing their customers to shift towards competitors. This is my rough interpretation of the situation. How do you all see it?
Robert Dzierżanowski: We should also include specialized garages that focus on tasks such as machining engine components, repairing turbochargers, servicing diesel engines, etc. These garages offer services not included in the portfolio of authorized garages. that is, offering services which the authorized garage segment does not have in their portfolio.
Paweł Hańczewski: When considering the challenges garages will encounter in the near future, extending beyond the Polish market to encompass all of Europe, the foremost issue to highlight is the shortage of labour force. Another issue we observe is related to succession problems, specifically the reluctance of young people to take over garages from their fathers.
The number of young people who would like to work in garages is also decreasing. What’s more, studies show that the situation will get worse with each year. There is little we can do.
Another problem is the issue of digitization and dealing with car software. And here we want to offer specific and tangible help to strengthen the aftermarket. I have prepared a little puzzle for you.
What’s this? In his picture it still looks like it's improvised, because it’s only a working version.
AF: It looks a bit like a small server room....
PH: It does, in a way. The idea is similar.
KO: My guess is that it’s a “flying mechatronics engineer”.
PH: Yes, you can put it that way metaphorically. Well, it’s a rack with factory testers for different car brands. We bought them together with access to the data. We want to provide independent garages with access to them, which will help address the shortage of trained mechatronic engineers and limited access to data. This equipment will be placed in European hubs and will be handled by our experts.
A garage will connect the device to the car and link up with our online specialists; they can then handle the rest, including diagnostics, software updates, and more. In short, we can overcome the problems associated with digitization.
RD: This concept still has an important economic dimension, because a garage using the solution, we have prepared will spend much less money on diagnostics than in the pass-thru access mode.
Grzegorz Kacalski: What about the universal diagnostic devices offered by companies like Bosch? Will they become a thing of the past?
PH: They are becoming less and less useful with every year. It’s just that the pace of technical development of vehicle software is so fast that manufacturers of universal devices can’t keep up with it, if only because of the proliferation of the ADAS systems, which increase road safety. We go to Bosch Car Service garages for warranty inspections, so we have a pretty accurate picture of the situation. Well, today even in pass-thru mode it is not possible to do everything, and access to the car manufacturer’s service device is indispensable to carry out certain activities. With the digital hub, an independent garage will have this access. In Scandinavian countries, this solution has been in use for a year and a half now.
KO: But once we have diagnosed a problem and a direct intervention in a car is necessary, a garage will still need a competent mechanic to handle it. Well, we've already talked about it before our meeting. It could be a beneficial concept to have a “mobile mechatronic engineer”-an independent specialist- offer services to garages as needed. I’m referring to smaller garages that may not be able to afford hiring such a professional on a full-time basis. to hire someone like that full time.
PH: It seems to us that people with such unique competencies will not want to work this way or their services will be very expensive. In the case of our diagnostic hubs, this solution will work only because we plan to have just a few of them across Europe, and they will have specialists speaking two or even three languages to handle a few markets at a time. Garages will have to make appointments with such a specialist in advance. The solution you are talking about seems to make sense. But as I mentioned before, there is the question of money.
RD: A small garage that is currently struggling in the market may not find this solution beneficial. On the other hand, there are garages that are small only in terms of infrastructure but otherwise performing quite well. They charge an appropriate amount for their man-hours, making the service we’re discussing a convenient and cost-effective solution for them. Remote diagnostics, combined with a consultation with our specialist, will enable them to carry out even complex repairs.
KO: It all sounds good. I’m just afraid that following such diagnostics a small garage like that would have to remove the failure itself and might not be able to cope with it. This situation could be then remedied by a mobile professional who would carry out the necessary repair, utilizing for example, your solution.
PH: Everything will depend on the money. In general, labour costs are rising, and perhaps the smallest garages won’t be able to afford to hire such employees in the first place. I recently spoke with a colleague from Słubice. It turns out that the whole area has been stripped of mechanics, who had gone to work at the Tesla factory near Berlin. Thus, the financial expectations of “mobile mechatronic engineers” and garage owners must meet at some point. Let’s keep in mind that such an independent professional will have to bear the costs of equipment, data access and training. These costs would be passed on to the garage and, ultimately, to the customer.
RD: For now, we observe that many garages resort to what could be termed as ‘ reconnaissance through combat .’ Instead of conducting a proper diagnosis, which they can’t do due to a lack of proper equipment and qualifications, they opt to replace parts one by one, hoping to eventually identify the issue. Unfortunately, car owners bear the cost of unnecessary part replacements. It often turns out that nothing needed replacement, and a simple software update would have sufficed.”
AF: I feel like I have to come to the defence of independent garages. I personally know more than one case where a diagnosis was also carried out by an authorized garage, so these problems apply to both segments of the market.
KO: I couldn’t agree with you more.
PH: I’ll answer this question by sharing a little story. Sometimes, Robert and I tour around garages together. On occasion, we hear a garage owner lament, ‘I can’t find anyone to work in my garage. It seems like everyone is so well-off that they don’t want to work’ .When asked about training, he insists there’s no point because trained individuals will leave right away, making it a waste of money. Now, in that same locality, there's also another garage. The owner there expresses having employees, many of whom have been with him for several years. In addition to regular employees, he also has a few interns. A revealing insight is to take a closer look at the break rooms in both garages. In the first one, people have only a cramped locker room combined with a kitchenette. In the second one, there’s a kitchen, a bathroom with showers, and the walls adorned with pictures of them fishing or picking mushrooms together. Given this scenario, would you have any doubts about which garage you would prefer to work for?
AF: Well, there it is.
KO: Do you provide garages with training in how to organize their space in an ergonomic way? The idea is to make the most of their working time.
RD: Ergonomics in the profession of a mechanic is one of the elements of training. The starting point is that a garage must have an efficient customer service process in place. What we do is we try to find those elements that comprise this efficiency. In some cases, the problem lies in the inadequate organization of the mechanic’s work and the logistics of providing everything for their work: parts, equipment, documentation, etc. For garages seeking assistance in this regard, we monitor their operations and identify the areas requiring improvement.
KO: The organization of a mechanic's work is a compelling issue as it often becomes the bottleneck in each garage. How can we streamline a mechanic’s work so that they don’t have to unnecessarily leave their working area, waiting for the consultant at the reception desk to finish talking to a customer and order the necessary parts? In other words, what changes can be made to reduce or eliminate the mechanic’s downtime?
PH: You’re right, of course, ergonomics does have a huge impact on efficiency. I think we should primarily focus on the organization of work of the garage owner himself. For example, effectively managed garages order the parts that will be needed for the next day’s repairs in advance. We’re talking about the most frequently replaced parts, of course. This way, the mechanic can begin to work right away without having to wait for all the necessary elements to be brought from the branch.
AF: To some extent, this also solves the issue of frequent deliveries.
RD: That’s why we are introducing in our chain digitization processes thanks to which the mechanic will not have to leave the shop floor at all, except, of course, to take a break.
KO: And what percentage of the garages of the Bosch Car Service chain have stores in them? Because theoretically, such a solution would give the possibility to offer an instant service of replacing consumable car parts on the spot.
RD: Of the 450 Bosch Car Service garages, only a handful operate a store. The competition between the distributors makes them deliver parts with such frequency that it makes no sense to maintain such a store. It’s easier to stock up on parts for specific cars that you’ll be repairing in the near future than to set up a separate warehouse. It doesn’t make much sense given the diversified car fleet and the broad range of services offered.
KO: That brings us to the next question: do garages really know how much they earn on particular services?
RD: Not really. This is because good garages close each month with a very handsome profit. And when we tell the owner that we can show him how to increase that amount by 30%, very often he’ll say that he’s not ready for the changes because they require effort, and that he’s satisfied with what he’s got.
KO: It seems to me that now is the right time to raise this awareness, especially considering the dramatically rising costs.
RD: You're right. I could provide numerous examples of how garages often overlook the fact that certain repairs may appear highly profitable due to the substantial amount on the invoice. However, upon analysing the time spent and the resources used, it becomes evident that one could potentially earn more through a variety of other activities. By issuing several invoices for lover amounts that yield a higher total, one could achieve better overall profitability. Fortunately, we have an efficiency calculator designed for such analyses, and it is actively used in our garages.
AF: I have recently presented an analysis prepared by MotoFocus based on a survey conducted among garages comparing the profitability of changing tires against the profitability of replacing other products. For example, during the time needed to replace one clutch, you can change tires on many cars. So, a lower per unit income from tire replacement translates into a much higher aggregated profit. And seeing the garages’ surprise at the results of these calculations, I believe that training on garage time economics is highly valuable.
RD: In general, with every service, even those seemingly economically challenging, there is still room for additional profit. I personally experience this with a tire garage where the owner earns substantial revenue through added values. Despite charging two or three times more than competitors for changing tires of the same size, the customers receive extra benefits. I never experience delays, and the tire change is consistently completed within 30 minutes, which is crucial for me as it saves time Additionally, the wheels removed from the car are washed and packed in new bags before being handed back, preventing any ness in my trunk or seat. Furthermore, the owner ensures the service quality by overseeing his staff, resulting in consistently perfectly balanced wheels.
In short, I pay more for the same service compared to other garages, but my satisfaction level is beyond measure. to the customer. This way you don’t get your trunk or seat dirty. On top of that, the owner controls the quality of the service carried out by his staff and so the wheels are always perfectly balanced. In short, I pay more for the same service than in other garages, but I am more than satisfied.
PH: Unfortunately, this is a very rare case. Back to reality. It should be stressed that most garages do not extend their services beyond the basic offer. They’ll usually replace a given part and that’s it. And yet the mechanic, while already under the car anyway, could carry out a quick inspection and prepare a list of elements that need repairing or replacing, and then offer the customer an additional service. Few garages call the customers to ask if they are satisfied with the service, or to remind them that something needs replacing and schedule a visit. That is, they don’t do what should already be standard today.
PH: "In essence, creating detailed procedural algorithms for a garage, similar to those applied by McDonald’s, is quite challenging." The challenge lies in the fact that at McDonald’s, for instance, there are only about 10 items, and the preparation of each follows a strict procedure. In contrast, the International Organization for Standardization (ISO) faced great difficulty in describing repair once. Another factor contributing to the difficulty in implementing changes is the owner’s attitude, often marked by a strong resistance to any alterations, a preference for the status quo, and a reluctance to embrace reforms. Some owners may not perceive the need for change, especially when customers continue to queue up at the garage, even if a few are dissatisfied. The prospect of a new customer on the ph0ne might seem more pressing to them.
RD: This attitude hampers the development of the entire aftermarket industry. We have new hardware and software tools that could greatly improve the operation of independent garages, but the barrier is frequently the lack of ability or the will to invest. The thing is that if you, as a garage owner, don’t change your attitude, a few years from now, you may suddenly realize that you’ve fallen way behind your competitors and that catching up with them is no longer possible.
RD: The succession is often only virtual. It usually looks like this: a young man takes over a garage from his father but doesn’t have much say in terms of running it, as the father controls everything from the back seat. True successions are very rare. But the young show a better understanding of the modern market than their parents.
PH: Interestingly, it is often the case that individuals who haven’t worked as mechanics themselves and adopt a more managerial approach to running a garage- especially when employing several people- are more likely to comprehend the need for changes. Implementing appropriate forms of accounting for employees and introducing incentive schemes, despite seeming simple, can significantly impact efficiency. Consider a scenario where a mechanic is about to finish their work for the day, and there’s still; unfinished tasks in the garage. - these seemingly simple things do matter from the efficiency point of view. Imagine a mechanic is about to finish his work for the day, and there is still something to be done in the garage.
If he is not rewarded for staying in a little longer to finish the extra work, it is only obvious that he will change his clothes and leave. But if he’s compensated for working overtime or the garage offers a commission on the parts replaced, he will stay and finish the job. Unfortunately, many garage owners don’t understand that it is worth sharing their profit with the employee because that’s one of the factors that drive their business.
RD: The discussion around garages getting ready to service electric cars is often exaggerated. If we observe the pace at which combustion engine cars are being replaced by electric vehicles, it becomes evident that by the time electric car owners become the major customers of garages, today's young generation, who have recently taken over their parents' businesses, will themselves be preparing to pass them onto the next generation. Therefore, there is no immediate need to worry about how garages will adapt once electric cars dominate the market, as this transition is expected to take many years."
KO: In five years, there will be merely 5 million electric cars of the aftermarket age across Europe. So, statistically, there will only be one electric car in the vicinity of an average local garage in Poland.
RD: Indeed, there will be independent garages that find it profitable to extend their services to handle electric cars, especially in cases where, for example, there is a courier base next door with a fleet of such vehicles. However, such situations will likely be rare. Therefore, instead of anticipating an electrical revolution, we should expect a slow evolution in the automotive landscape.
AF: And so, the media-created exaggerated visions of a rapid change in the structure of the car fleet have been brought down to earth by experts.
KO: To sum up our brief discussion on the future of electromobility, one can say that electric cars in independent garages will continue to be as rare a thing as the deposits of rare earth metals necessary for the production of car batteries.
AF: When I handed over the reins of SDCM, I thought I would have a whole lot of free time. I didn’t even really know what I would do with it. But I finally decided to implement some ideas in the MotoFocus Group that had already been on my mind. And I got so caught up in it that I still haven’t had the time to be bored. But at least I now live a more peaceful and slower life. I ride my bike a lot, which has become my main means of transport.
KO: I have formally retired, but I remain an advisor to the Inter Cars’ management board. I share with them my opinions on the most important topics, mainly sales. I finally have the time to pursue my hobbies, namely sports. I used to relax as a racing car driver, a hobby which I began to pursue quite late, because initially I had no money and later no time for it. By the time I had both, my reaction time had become a bit too slow. Now, my passion is golf. It’s a fascinating game.
AF: And how are you doing after the surgery? I’ve seen an animation illustrating what it was about - it resembled training videos for garages on how to replace some complicated component. Are you back in shape?
KO: Surprisingly, I've been playing better than before the surgery. I have a brand new ankle joint and additional stabilizing components. I no longer have pain in my leg and can concentrate on playing. I recently won a tournament, and I won it by a big margin. My envious opponents said I should have been disqualified for using spare parts without type approval (laughter).
AF: Type approval can be problematic in our country. There are constantly some problems with it because our regulations in this regard are far removed from life (laughter). Speaking of sports, my great passion since childhood has been skiing. I’ve also even won a few skiing tournaments in my life. Who knows, maybe I will take part in a tournament in the near future again. I still have type-approved parts, so I’m sure I won’t be disqualified (laughter).
