Independent aftermarket car services could be wiped out by 2030

More than €33 billion could be wiped off the value of independent after-sales and servicing for cars if control of in-car data isn’t wrested from global carmakers. That’s the warning being sounded by the Federation Internationale de l’Automobile (FIA). The FIA, the governing body of world motorsport but also a driving force behind vehicle safety programmes such as the Euro NCAP crash test service, is saying that because carmakers want to control and “own” the data produced by growing ranks of connected vehicles, independent service agents and third-party aftermarket suppliers could be forced out of the market.

The study was carried out by the FIA's "Region 1" – a consumer body comprising 105 "mobility clubs" that represent more than 35 million members from across Europe, the Middle East and Africa. The FIA represents the interest of these members as motorists, public transport users, pedestrians and tourists, with a primary goal of "securing mobility that is safe, affordable, sustainable and efficient".

Laurianne Krid, director general at FIA Region I, said: "Car connectivity is no longer about the future, it's here and it's impacting on consumers and independent service providers alike. This study makes it clear that we need to act now to guarantee competition and consumers' ability to choose from a variety of service providers. Robust and binding EU rules are urgently needed. There are alternatives to the current models that can secure consumer choice, fair competition and cybersecurity. But the longer we have to wait for EU action, the less we can expect from innovation in the digital era. Ultimately, this means poorer services for motorists and lower societal benefits."

Tight control

With all cars expected to be fully connected – equipped with a built-in SIM card allowing the car’s onboard systems to be constantly, wirelessly connected to the world wide web – by 2030, the FIA says that time is running out if Europe’s aftermarket parts, servicing, and services sector isn’t to be destroyed.

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The major carmakers are, unsurprisingly, keen on keeping tight control of who can and cannot access the data generated by using their cars, and using the increasing number of connected services – everything from weather reports to live parking data and automated servicing bookings – allowed by the new technology. Some of that tightness is down to security issues, and major concerns have been raised about car companies leaving too many doors open for outside parties to gain access to connected cars’ inner workings.

The other reason, though, is cash. The “aftermarket” market is worth about €65 billion a year, and unsurprisingly carmakers are keen to use the increased connectivity of our cars to try to crowbar their way into that market. The theory being that if a person has bought a shiny new car, they’ll be more likely to trust the company that has built it to supply post-sales services, and to protect the data coming from them.

According to the FIA’s study, though, that’s going to destroy the independent servicing and aftermarket industry, as well as add to the cost burden to the consumer. “By 2025 a potential loss of €15 billion for independent stakeholders; or 12 per cent of their current annual market volume will occur” said the FIA Region 1 office. “A further increase of the loss is expected by 2030 when all vehicles are connected, and the independent market will have eroded to such an extent that €33 billion is potentially lost. In addition, consumers would have to carry the burden of a spend increase by €15 billion in 2025 or an additional 9 per cent compared to today. A further increase to €32 billion annual loss for consumers is expected by 2030.”

Concerned

The FIA is concerned that “these outcomes reveal that if the current data access models are utilised in the long term, the negative impacts on independent aftermarket service providers will allow [the major carmakers] to further integrate themselves into the aftermarket themselves, and in turn offer them much stronger control over relations with the end consumer. This would have the effect of ultimately reducing consumer choice, reducing competition and ultimately meaning for lower societal benefits to be accrued.”

The study estimates that job losses from such a contraction could be enormous. Across Europe, we currently spend around 3 per cent of total GDP on the upkeep and maintenance of our cars, and that helps to employ some five million people, across an estimated one million companies, the vast majority of those being small-to-medium enterprises.

Consumers and car owners were polled across the four of the largest European car markets, and the results showed that a majority (56 per cent) preferred to use an independent garage for servicing, while 61 per cent said they’d rather go to an independent for repairs. “All respondents unanimously declare that independent garages are generally cheaper than captive garages but that they consider them just as competent and stay very loyal to them,” said the FIA report.