According to a report published by the Society of Motor Manufacturers and Traders (SMMT), motorists in the United Kingdom spend a total of £ 21.1 billion (approximately RM 124.7 billion) a year on servicing and repair. This report is the first official industry analysis of the UK car market and concludes that such spending indicates that British cars are among the best maintained in the world.
The Importance of the Aftermarket to the UK Economy report was commissioned by SMMT from independent research consultancy Frost & Sullivan and reveals that UK car owners spend an average of £ 695.39 (approx. RM 4,108) on car maintenance every year – about 12% higher than the global average of £ 621.62 (RM 3,672); fleet and leasing companies are more likely to follow the manufacturer’s recommended maintenance schedules and hence will spend more on average than the regular consumer. The report also states that compared with other markets there are fewer cars in UK which are in disrepair, generating excess pollution or needing new brakes.
The UK automotive aftermarket is a huge, diverse and highly competitive industry with more than 42,500 vehicle service and repair centers. Independent outlets take up 64% of the service and repair jobs – the largest proportion in Europe, as parts and labor costs at independent outlets can be up to 65% and 45% lower respectively. Nonetheless, there is still a strong franchised dealer network.
The report also shows the importance of the automotive aftermarket to the UK economy; it supports more than 345,000 jobs and contributes £ 12.2 billion (RM 72 billion) annually to the local economy. By 2022, the UK aftermarket is projected to be worth £ 28 billion (RM 165 billion) with an employee base of around 400,000 due to the expected increase in number and age of vehicles on UK roads.
Mike Hawes, SMMT Chief Executive 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 the fourth largest in Europe by car parc size (the total number of vehicle in the country or region), with more than 30 million vehicles in use; it is set to overtake France for third place by 2022. By the same measure, it is also the eighth largest sector of its kind in the world – bigger than in Brazil, Korea, Canada and India.
According to the report, changing consumer behavior will also affect the automotive aftermarket in the future. As consumers move from outright vehicle purchase to leasing and a longer-term trend from car ownership to ‘usership’, aftermarket businesses will need to look at new ways of tackling this. The increasing use of high technology and connectivity in vehicles will also present opportunities and challenges.
The digital age is also impacting the way consumers’ needs are served as vehicle owners are embracing the use of the internet to compare prices and products and schedule maintenance work. The UK aftermarket currently has 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.
Keyword: UK Motorists Spend £21.1 Billion A Year On Service And Repairs