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A Brief Introduction to German Auto After-sales Market

From VDIK| May 16,2007

From a business perspective, after-sales service is the supporting pillar of motor vehicle businesses. In 2004, the German motor vehicle trades grossed an estimated 25.6 billion euros. A major part of the positive cash flow is generated in the repair and parts business.

In addition, automotive services are a major stabilizing factor in times of economic fluctuations, and may potentially even compensate the revenue shortfalls from new vehicle sales.

As a result of to longer service intervals and better vehicle quality, the service intensity is in a downward trend. The major growth segment in the service market - the older vehicles - is subject to increasing competition between independent repair shops and authorized repair shops and car dealerships. At the same time, the vehicles continue to become increasingly complex in their engineering. This leads to demands for state-of-the-art test equipment and intensive training of the technicians. Combined with the manufacturers stepping up their service marketing programs, the authorized dealers have better prospects for the future in this area.

Future strategies in the service area must aim at gaining the motorists’ loyalty for the entire life-cycle of a vehicle and keeping them with the respective make’s organization. At times when the demand for automotive services is going down, it becomes increasingly important to preserve or even increase a customer’s loyalty to his or her repair shop. The VDIK offers its member companies effective discussion platforms on the topics of customer service, customer satisfaction, training as well as parts and accessories marketing.

Technical vehicle inspection as customer retention instrument
The regular vehicle inspections required by law ensure a high standard in the area of road safety and pollution control in road transport. Of the total vehicle population, currently roughly 45 million vehicles are subject to mandatory testing, undergoing main inspections (Hauptuntersuchung - HU),exhaust emission testing (Abgasuntersuchung - AU),safety inspections (Sicherheitsprufung - SP) and tachograph and control device testing. These official inspections and tests bring the repair shops around 18 million customer contacts per year. In adaptation to modern vehicle engineering, the technical vehicle inspections will be completely revised as of 2006.One of the changes is that the main inspection and the exhaust emission test will be bundled together.

In connection with this bundling, the inspections will start relying more on the self-test system in vehicles with onboard diagnosis (OBD) systems as of 2006.In addition, special diagnosis equipment will be used for the exhaust emission test. This means that in the future, vehicles with OBD registered for the first time on or after 01 January 2006 will no longer require a measuring of exhaust gas at the tail pipe, provided that the exhaust systems function properly.

Moreover, the electronic systems specifically listed in the amended German road traffic type approval act (StVZO) will henceforth be inspected on the basis of so-called system data using the self-diagnosis system available on board.

For vehicles with gas engines, too, the regular inspections are to be performed in connection with the main inspection starting in 2006. To this end, the gas system inspection (GAP) will be introduced, which can also be carried out by approved repair shops. Another inspection introduced in 2006 with the amendment of the StVZO is the gas system installation inspection (GSP).In the future, the GSP can be performed in repair shops if an after-market system (natural gas or liquid gas) with a European type approval in accordance with ECE Regulation 115 has been retrofitted. The aforesaid new inspections will lead to lower costs for the affected vehicle owners.

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