27/04/2022
The automotive repair sector in the UK finds itself at a critical juncture as it navigates the complexities of 2024. Following several challenging years, marked by the lingering effects of the pandemic on supply chains and staffing, garages and workshops are now confronting a new wave of hurdles. While the industry has shown remarkable resilience, the latest insights from The Motor Ombudsman's annual survey and the comprehensive 'UK Motor Claims and Body Repair Report 2024 – 2025' paint a clear picture of an environment demanding strategic adaptation and unwavering customer focus.
The Unyielding Pressure of Rising Costs
For a significant proportion of vehicle repairers – a staggering three-quarters, in fact – the most formidable challenge anticipated for the coming year is the relentless increase in operational costs. This encompasses everything from escalating energy bills and higher taxes to general overheads that continue to squeeze profit margins. These aren't isolated incidents; they represent a systemic pressure that forces businesses to reconsider their pricing strategies and operational efficiencies.
Compounding this financial strain is the expectation that the cost of spare parts will continue its upward trajectory, with 58 percent of respondents anticipating higher outlays than in 2023. This is largely attributed to persistent factors such as global supply chain disruptions and inflation, making it more expensive to source the components needed to fix customer vehicles. The combination of soaring running costs and pricier parts creates a challenging economic climate for even the most established workshops, impacting everything from profitability to the ability to invest in future growth.
The Customer Conundrum: Price Hikes vs. Affordability
In light of these increased expenditure, just over half of repairers (54 percent) face a critical dilemma: raise prices to remain viable or absorb costs and risk financial instability. This comes at a time when household finances across the UK remain under considerable strain, directly impacting consumer behaviour. Garages are already witnessing the fallout, with 54 percent foreseeing customers postponing essential repairs and 49 percent expecting delays in routine maintenance to save money. This mirrors the principal hurdles encountered in 2023, where 53 percent of businesses had observed customers avoiding bringing their cars in, explicitly to reduce expenditure due to the widely reported cost of living crisis.
The balancing act between sustaining a profitable business and offering an attractive, affordable proposition to motorists is perhaps the sector's most delicate challenge. Repairers must carefully consider how price adjustments will be perceived by a customer base already feeling the pinch, ensuring that vital maintenance isn't neglected to the point of compromising vehicle safety or leading to more expensive future repairs. Deferred maintenance often translates into larger, more costly repairs down the line, creating a vicious cycle for car owners.
The Persistent Search for Skilled Hands
One of the most enduring challenges for the automotive repair sector is the perennial technician shortage of qualified and skilled professionals. While 56 percent of repairers struggled with recruitment in 2023, a greater proportion (58 percent) expressed the same concern when looking ahead to 2024. This highlights a deepening crisis in the labour market, where experienced mechanics are an increasingly sought-after resource.
Modern vehicles are becoming ever more complex, incorporating advanced electronics, intricate diagnostic systems, and diverse powertrain technologies. This requires a new breed of technician with specialised skills and continuous training, making the recruitment pool even smaller. The struggle to attract and retain talent not only impacts a garage's capacity to meet demand but also its ability to adapt to technological advancements, particularly with the rise of electric vehicles.
Embracing the Electric Revolution: A Mixed Outlook
The growing popularity of electric vehicles (EVs), both new and used, presents a multifaceted challenge and opportunity. With fewer mechanical parts than their petrol and diesel counterparts, EVs inherently require less traditional maintenance, such as oil changes or spark plug replacements. This led 26 percent of repairers to respond in the survey that battery-powered cars would provide less scope for additional revenue opportunities and replacement parts in 2024.
However, there's an encouraging shift in perspective. This figure is down from 32 percent seen in the same study regarding expectations ahead of 2023, suggesting that more businesses are beginning to embrace new technologies and actively seek alternative revenue streams. This might include specialised EV diagnostics, battery health checks, charging point installation, software updates, or even focusing on complex accident repair for EVs, which can be highly specific and require particular expertise and equipment.
Strategic Investments for a Resilient Future
Despite the formidable challenges, UK garages and workshops are far from static. The sector is actively pursuing positive developments and strategic investments to ensure long-term viability and competitiveness:
- Workforce Expansion: Over half of respondents (52 percent) indicated their intention to invest in recruitment, striving to expand their workforce from a competitive talent pool. This proactive approach is crucial for addressing the technician shortage and building capacity to meet customer demand.
- Premises Refurbishment: Over a third (35 percent) plan to refurbish existing premises. This is not merely cosmetic; it's about enhancing the customer experience, improving operational efficiency, and creating a more modern, inviting environment that reflects the evolving nature of automotive service.
- Infrastructure Upgrades: A fifth of businesses are planning to add workshop and MOT bays, alongside additional on-site electric vehicle charging points. This foresight directly addresses growing demand for EVs and expands service capabilities, positioning garages for future market shifts.
- Training and Development: Nearly a quarter of repairers intend to participate in webinars and training courses. This commitment to continuous learning is vital for keeping pace with rapidly evolving vehicle technology, improving diagnostic capabilities, and refining operational practices across the organisation.
The Wider Automotive Market: Insights from Trend Tracker
The 'UK Motor Claims and Body Repair Report 2024 – 2025' provides a broader context for these operational challenges, offering essential commentary on the latest market position. The report predicts the overall body repair market value to exceed £9 billion in 2024. However, it also highlights a paradoxical trend: falling volumes in the insurance vehicle repair sector.
This suggests a shifting landscape where average repair costs might be increasing significantly, or perhaps more work is being done outside of insurance claims. Several macro-level factors are at play, influencing the sector's dynamics:
- An Ageing Car Parc: The average age of cars on UK roads is now nine years old. Older vehicles often require more frequent and complex repairs due to wear and tear. However, they also present different challenges, often lacking the advanced technology of newer models, which can affect diagnostic and repair procedures.
- ADAS Penetration: Modern cars (2015-2023 models) have significant Advanced Driver-Assistance Systems (ADAS) penetration. Repairs involving ADAS components (like sensors, cameras, radar) require precise calibration and specialised equipment, driving up complexity, repair time, and cost. This necessitates significant investment in training and technology for workshops.
- More Cars, Fewer Claims? Interestingly, despite more cars on the road, an increase in licence holders, and more average trips being taken, overall claims remain low. This is a key industry question that the report explores, potentially influenced by improved vehicle safety features leading to fewer accidents, lower severity of incidents, or perhaps a higher threshold for claiming due to excess costs and rising premiums.
- EV vs. ICE Repair Costs: This remains a hot topic for analysis, with the report delving into essential data comparing the costs associated with repairing electric vehicles versus internal combustion engine (ICE) vehicles. Understanding these cost differentials is crucial for insurers and repairers alike as the vehicle parc electrifies.
- Sustainability and AI: The report also touches upon emerging trends like sustainability in repair processes, reflecting growing environmental consciousness, and the increasing use of Artificial Intelligence (AI) in claims management, signalling future shifts in how claims are processed and managed.
- Repairability Focus: The newly launched Thatcham Research vehicle rating system underscores the industry's focus on ensuring vehicles are repairable. This is a critical factor for managing repair costs, promoting safety, and influencing vehicle design to facilitate easier and more cost-effective repairs.
Comparative Challenges: 2023 vs. 2024
Here's a quick look at how some top challenges for UK garages compare between 2023 and 2024, highlighting the persistent nature of these issues and the growing pressures:
| Challenge | 2023 Concern Level | 2024 Concern Level (Foreseen) |
|---|---|---|
| Rising Operational Costs / Taxes / Energy Bills | High (Implicit in 'cost of living crisis' impact) | 75% of repairers |
| Increased Spare Parts Costs | Significant (Implicit) | 58% of repairers |
| Customers Delaying Essential Repairs | 53% of businesses witnessed | 54% of repairers foresee |
| Customers Delaying Routine Maintenance | Significant (Implicit) | 49% of repairers foresee |
| Difficulty Recruiting Skilled Technicians | 56% of repairers | 58% of repairers |
| EVs Providing Less Revenue Opportunity | 32% of repairers | 26% of repairers |
Frequently Asked Questions (FAQs)
Q: Why are car repair costs rising in the UK?
A: Repair costs are primarily increasing due to several factors: surging operational expenses (like energy and taxes), higher prices for spare parts (driven by inflation and supply chain issues), and the growing complexity of modern vehicles requiring specialised tools and highly skilled technicians for diagnosis and repair.
Q: Are electric vehicles (EVs) cheaper to maintain than petrol/diesel cars?
A: While EVs generally have fewer moving mechanical parts, potentially leading to less routine maintenance (e.g., no oil changes), their repair costs can be complex. Battery repairs, specialised diagnostics, and accident repairs often require specific training and expensive, dedicated equipment, making the overall cost profile different and sometimes higher for complex issues.
Q: What is The Motor Ombudsman and why is accreditation important?
A: The Motor Ombudsman is an independent and impartial body that provides an approved code of practice for the automotive industry. Accreditation signals a garage's commitment to high standards of work and customer service, offering consumers added reassurance and a free, independent dispute resolution service if needed. It serves as a key point of differentiation in a competitive market.
Q: Why are customers delaying essential car repairs and maintenance?
A: The primary reason is the ongoing cost of living crisis, which has placed significant strain on household budgets. Many consumers are prioritising immediate expenses and deferring non-urgent vehicle upkeep to save money, often unaware of the potential long-term safety and financial implications of neglected maintenance.
Q: What is the average age of a car in the UK?
A: The average age of a car on UK roads is currently around nine years old. An ageing car parc can mean a higher demand for certain types of repairs as components wear out, but also presents challenges in servicing older vehicles with outdated technology compared to newer models.
The automotive repair sector in the UK faces a complex interplay of economic pressures, technological shifts, and evolving consumer behaviours. As Bill Fennell, chief ombudsman and managing director of The Motor Ombudsman, aptly puts it, garages must "balance the need to remain competitive in order to deliver an attractive proposition to motorists, at a time when household budgets remain under strain."
The industry's response, characterised by strategic investment in people, premises, and new technologies, demonstrates a proactive and adaptive approach to these challenges. While the road ahead is undoubtedly demanding, the commitment to high standards, continuous improvement, and unwavering customer satisfaction, often underpinned by accreditations like The Motor Ombudsman, will be crucial for independent garages and franchise workshops to not only survive but thrive in the dynamic UK automotive landscape. Their ability to adapt to rising costs, technological advancements, and shifting consumer habits will ultimately define their success in the coming years.
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