What is the impact of ev on the after sales revenues?

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The advent of electric vehicle (EV) motors and the increase in vehicle connectivity are impacting the profitability of franchised car dealerships.

In a conventional business model, dealers rely on routine and relatively predictable aftermarket and parts sales activities to optimize a dealer’s net profit.

However, a fully electric car does not require servicing and maintenance like a car with an internal combustion engine, and there is no oil to change, and there are far fewer moving parts.

Many companies are now wondering what the impact of ev on the after sales revenues is.

How will EVs affect aftermarket revenues?

Electric vehicles have less wear and tear, less service requirements, less warranty repairs, all of which means less after-sales revenue opportunities, and finding car dealerships will find replacement revenue streams.

However, the lower revenue opportunities for traditional services could be offset by better customer retention rates, which would have a positive impact on aftermarket revenues and net profits.

Improving customer retention has been proven to improve dealer profitability.

Advances in engine technology, changes to service intervals, refinements to fuels and lubricants, the technologically evolving hybrid engine market, and tremendous advances in vehicle connectivity have already prompted franchise dealers to develop new strategies to optimize their aftermarket operations.

Increasing consumer demand for full electric vehicles has further accelerated this process, and maximizing customer retention is more important than ever.

Thus, seasonal health checks, menu price handling and special offers, once textbook examples of an innovative marketing strategy, are now giving way to targeted, intelligent selling of personalized products and services, which will become a routine after-sale activity in the future.