The car repair industry is a long-standing sector, but one that’s typically seen its fortunes tied to the wider vehicle market, with few opportunities for expanding, offering different products and services, and increasing profitability. Indeed, Statista figures show that the number of motor vehicle repair workshops in the UK dropped by nearly 3,000 between 2004 and 2020, making the sector less competitive.
Yet, at the same time, the number of cars in the UK continues to increase. And with the government failing to invest in mass public transport and pivoting towards electrification, it’s certain that car repair businesses will be needed long into the future.
Focus on long-term business
As time has gone on, cars are lasing longer and longer, with the average age of a vehicle now at 7.8 years, according to SMMT figures.
This means owners are more likely to stick with the same car for a long time – the perfect chance to win repeat custom. To boost your profitability here, be sure to focus on providing great service for returning customers, rather than attracting a revolving door of one-time customers.
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Reduce labour costs
According to Body Shop Business, in the US, labour profit margins are more than double that of parts, making labour the cost to cut if you want to quickly boost profitability, as opposed to wasting time shopping around for discount components.
Hire new staff and train them up rather than relying on contract or temporary staff, giving staff extra perks that aren’t salary-based so they stay on board. Also try and cut the time it takes to complete tasks in the workshop by looking at your workflows and optimising them: make sure your shop is a well-oiled as the cars rolling off the lot. And train your staff on how to properly use equipment – their lack of knowledge could well be slowing things down and increasing your costs.
Invest in equipment
Purchasing the right equipment will make your business more efficient, allowing for jobs to be completed more easily. For instance, if you work on a specific manufacturer’s vehicles, investing in specific torque wrenches such as these, tailored to each vehicle, can make jobs get done quicker and to a higher standard.
Investing in cheaper equipment can work too – electronic power tools, while a little more expensive upfront, can be less expensive than gas lines in the long run, for instance.
Improve your scheduling
Ramping up your scheduling capabilities will allow your business to be more efficient and fit in more appointments throughout the working day. Paying employees while they are not working on an appointment can lead to lower profitability, so make sure to have a great scheduling system to maximise profitability.
What do you think about the tips above? How do you make your workshop more profitable? Let us know your thoughts in the comments section below.
