It may have seemed unimaginable to surpass the chaos that disrupted nearly every industry in 2020, but this year has been action-packed for the automotive sector. From sweeping electric vehicle pledges, to semiconductor shortages and supply chain snafus, to the looming possibility of additional shutdowns, many shop owners are still reeling and trying to catch their breath.
“A lot of shops are having banner years and business is booming, but we’re all still just trying to get through COVID and look after the health of our teams,” says Greg Buckley, owner of Buckley’s Auto Care in Newport, Del. “A lot of shop owners who might normally be planning ahead are just too bogged down.”
“Auto repair’s mostly cyclical, but right now there is no cycle, just sprinting. It’s a marathon with no end in sight” says Chris Cloutier, owner of Golden Rule Auto Care in Dallas, Texas.
And though Cloutier’s been more preoccupied lately with providing relief to his well worn team and replacing key gaps in his loaner fleet, he and tech-savvy, forward-thinking shop owners like him are slowly, but surely, carving out time to strategize for the future of their operations.
So, what exactly are the technology shifts and industry pressures expected to impact the average shop in the years ahead, and how are future-focused shops investing in technology, tools, and training to prepare? Ratchet+Wrench checked in with industry pros and shop owners staying ahead of the curve.
Electric Vehicles
Addressing the Fear Factor
It likely comes as no surprise that after a year filled with electric vehicle-focused headlines and legislative pushes, EVs are top of mind for shop owners and industry experts alike.
But how concerned should the average shop owner really be?
“EVs don’t matter. Not yet anyway” says Donny Seyfer, former owner of Seyfer Automotive in Wheat Ridge, Colo., and executive officer for the National Automotive Service Task Force (NASTF). “They’re not critical for service repair, and they’re not going to break for a while. They’re more of a concern five years down the line.”
Seyfer notes that shop owners are often fast to track new and emerging technologies, but have a tendency to jump in on them well before they face a market need out of fear they’ll be left behind.
While it doesn’t hurt to research newer technology and build familiarity with EVs before they arrive at your shop, Seyfer warns against sinking too much into tools and training right away.
Reading the Tea Leaves
While most reports indicate that EVs currently account for between 2-3 percent of the U.S. vehicle market, Steve Shannon, a former executive of both GM and Hyundai with over 25 years of automotive experience and current tech advisor to Podium (a customer communications tool with roots in auto repair), says EVs may not be here in full force just yet, but they’re not going away.
“Many major automakers aren’t just pledging to manufacture EVs, they’re stopping all new development work on internal combustion engines altogether,” he says, referencing the discontinuation of Chevy’s Volt hybrid model in 2019 as a prime example. Shannon says the company dropped the hybrid before its useful life was up in order to focus its research efforts on EVs.
“You can’t keep doing everything. At some point you have to focus your efforts, but once you’ve made that hard stop, it’s pretty hard to turn that back on,” he says. “They’ve officially picked a lane.”
Taking the First Step
So, how exactly are shops starting to prepare for the onset of EVs? They’re ponying up to buy their own.
Buckley has personally put in an order for a 2022 Ford F-150 Lightning electric truck, and Cloutier aims to buy a Tesla by the end of the year.
Cloutier plans to use the vehicles to help their teams gain early, hands-on access and warm up to EV systems. After facing a five-week wait from a Tesla-certified shop, a customer recently brought her Tesla to Golden Rule hoping for help. Cloutier says his team was not only unprepared, but some were even a little uneasy about getting in the car itself. He’d considered sending his team to training, but the company’s training can be inaccessible and weeks long.
With his purchase, Buckley also hopes to gain an understanding of the lifestyle that comes with being an EV owner. With a better understanding of the shop’s own EV, Buckley hopes his team can serve as a kind of sherpa, guiding customers with advice on EV chargers, glitches they may experience, and other soon-to-be common questions.
Shannon, Buckley and Cloutier all recommend getting your feet wet with hybrids, not only because they make up a larger market share than EVs and are likely to draw in more immediate profits, but because they can serve as a gateway for EV training.
What does the average shop owner plan to invest in in the next 5 years?
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ADAS 42%
EVs 50%
Fleets 35%
Training > Tools
While both training and tool investments are vital spends in any shop budget, industry experts and shop owners anticipate technical education will become a much greater priority and a critical shop spend moving forward.
“It’s not that tools aren’t still important. They are,” says Seyfer. “It’s that as technology shifts, the learning curve is only getting steeper and ff those two-legged things walking around the shop aren’t educated, and don't feel confident they can do their jobs efficiently and accurately, it won't matter how many tools you buy.”
Seyfer says his primary shop investment in the coming years will be grounded in education to begin building for two types of technicians: “the watchmaker” that excels with small, detailed, mechanical fixes, and the “networker” that understands how the technical systems function and sync.
“The big elephant I see in the room is how you’re going to communicate with the vehicles from the past four or five model years. Now is the time to start training up those technicians with a background in computer networking,” he says.
Plan ahead.
It’s likely most shops will need to boost their training and education budgets to keep up in the coming years, but Seyfer recommends taking a strategic approach before committing to a big spend.
Do you anticipate seeing more of a particular repair from similar models? When do you expect you’ll see this issue next? Who are you working for and what years are those cars? Are you willing to lose tech for a full day away from the bay? All are questions Seyfer advises asking while choosing the training you’ll send your team to.
And when it comes to budgeting, Seyfer says there’s no silver bullet formula. According to the 2021 Ratchet+Wrench Industry Survey, the majority of respondents allot 1-5 percent of their annual revenue for training. But Seyfer advises skipping percentages and basing your investments, “on the knowledge-base of your technicians as well as their ability to take what they know and turn it into money. One percent of your revenue isn’t likely to get you there, but one percent will look different for every shop.”
Make the ask.
Seyfer also recommends taking full advantage of the learning opportunities available to you in your own shop. When his team encounters a vehicle or a system they’re not as familiar with, they’ll ask the customer if the shop can keep the vehicle for a few extra hours.
“We’ll say, ‘Hey, your car’s got some new tech in it. Mind if we keep it a little longer to try out one of our new tools?’ We’ll offer a free oil change or minor service, and they’re usually thrilled,” says Seyfer.
Determine your diagnostic needs.
Seyfer often advises shop owners that if they’re working on a particularly profitable repair or makes up 20 percent or more of their fleet, they should be stocked up with OE tools for those repairs.
His family’s shop sees a lot of Subarus and Ford and Chevy pickups, so his team is tooled up for those brands, but when a Nissan shows up that requires a factory tool, they call in support.
And as diagnostics become a more integral and complex part of repairing today’s high-tech vehicles, Seyfer advises that shops line up a remote diagnostic pro to keep on call, or train up an in-house expert of their own. While diagnostic training could wind up as a pricey distraction for more general repair shops, Seyfer says shops that are known for their diagnosing skills should be doubling down with some “killers” on staff.
“Either way, you can’t afford to dabble with diagnostics. It’s a comprehensive job that requires doctor-like skills not everyone has, so you’ll need to commit to those investments with a tech you’ve chosen for their chops,” he says.
Buckley favors the training of in-house diagnosticians to ensure that technicians are truly learning the vehicles they’re servicing.
“We fail to learn what it takes to correct a vehicle if we just plug in, walk away or let someone else fix it. If you want to run all B-techs and call in help for the A-tech work it can work, but you need to consider what kind of model you’re ultimately running,” says Buckley.
Embrace the off-site.
With more training slated for the average shop’s future, Seyfer warns shop owners will need to make time and space for their techs to leave the bays more often.
“Owners are going to have to let their techs out of the shop because the skills they need to learn today are hands-on,” he says. “Most techs don’t have it in their DNA to sit in a classroom, then turn everything thrown at them into profis. They need to physically work through those processes.”
And Seyfer says many training organizations are working to provide more hands-on demonstration to their programs, which will ultimately limit the number of attendees that can be accommodated and drive up the price of training.
“Those classes are going to get more expensive, but your bang for your buck is going to go through the roof when your team can come back to the shop and say, ‘I’ve already done this. I didn’t just hear the theory, I actually did it.’”
ADAS
The term advanced driver-assistance systems, or ADAS, may seem like it’s been a buzzword for years, but in truth, the technology is still in its earliest stages.
“ADAS is still in its infancy. It may be in the vehicles you’re seeing in your shop today, but it’s still just a baby that’s just starting to mature and has a long way to go,” says Seyfer, roughly estimating that the technology could be mature within five years and possibly self-diagnosing after 10.
As lower cost ADAS and equipment are still proving themselves, Seyfer says shop owners need to be conscious of why they’re investing.
“Am I going to buy ADAS equipment because the price point gets to a place where I can make it work? Maybe not, but if I’ve got the market to support it, someone on staff willing to learn it, and have found I can make a profit, I’m going for it,” he says.
And ADAS is where Buckley plans to invest most in the near future. He’s currently got 2,500 square feet he plans to build out for his shop’s ADAS set-up, and is now in the process of educating his contractor on the system’s delicate specifications.
Having a solid understanding of his client base and the potential business the investment could bring was key for Buckley. While some shops invest in ADAS while banking on business from collision shops and other vendors, Buckley aims to avoid a wholesale approach, finding that the model often means discounting the true value of the investment and running into additional complications.
“I don’t want to pay off my investment by putting all that money on the street, and I’ve learned I don’t usually get the full story from partners like collision centers, which leads those repairs to drag on,” he says. “You have to be careful, you don’t want to ruin relationships.”
Cybersecurity
You may already have cybersecurity top of mind when it comes to your shop’s email, Wi-Fi, or management system, but what about your shop’s scan tools?
Seyfer warns that in the following years, the security risks associated with auto repair will only become more hazardous. During the height of the pandemic when many cars were parked for long, less surveilled stretches, auto theft spiked after years of steady decline—many were the result of key code cyber crime.
“Once that key code is out in the wild, that car will never be secure again,” Seyfer says. Key codes can easily end up on the dark web, becoming a risk to any future owners of the vehicle as well, which could be stolen at a moment’s notice by anyone who’s found them.
With plenty of shops buying knock-off scan tools from China, Seyfer says repairers are exacerbating the problem.
“Techs are scraping a car, grabbing its immobilizer code and any other info that happens to be on its network, and that data is getting sent back to China, and techs don’t realize it’s happening. They’re not doing it on purpose,” Seyfer says.
In his role with NASTF, Seyfer is working with automakers and industry stakeholders to find solutions, but shop awareness and understanding of liability will continue to be a challenge.
“It took years to get cybersecurity best practices on the radar of the average shop owner and as new vehicles continue to use high levels of integrated security, we’re going to have to keep an open dialogue so shops don’t find themselves at fault or putting their customers at risk.”
Tools for Ultimate Efficiency
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“From digital vehicle inspections to CRM software, to an appointment reminder system, everything is being designed to remove roadblocks from someone’s plate and ideally do better work with less people,” says Cloutier, who is not only the owner of two auto repair shops, but the founder of autotext.me and is currently working to build a new application, Baywatcher.io, that uses object recognition technology to scan and track time management of bay activity, among many other software design projects. “We’ve only seen the beginning of the uses of this kind of tech in the way we track and manage our workflow,” says Cloutier. Shannon also says customer conveniences like texting will be sticking around and help build customer relationships overall. With the Amazoning of everything these days, customers are looking for instant and simple communication as well as purchasing ability,” Shannon says. “On top of that, a recent Podium study found that nearly 90 percent of customer texts get answered within 3 hours. Shannon says investments in tools that aid customer communication will continue to gain momentum with customers moving forward as the convenience factor becomes a nonnegotiable across every retail sector.
