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TYRES and wheel alignments will be two possibly unexpected areas of potential revenue for dealerships and independent repairers, as Australia moves to electric vehicles (EVs) and more vehicles that are fitted with advanced driver assistance systems (ADAS).

Speaking at the recent AADA conference, Precision Automotive Equipment’s national key accounts manager, Adam Caddeo, spoke about how dealerships will see a shift in traditional revenue streams in line with the introduction of EVs.

Precision Automotive Equipment supplies and maintains vehicle-service equipment nationwide and has been a part of Bapcor Ltd since 2016. Two of its exclusive equipment suppliers are wheel-alignment specialists Hunter Engineering and hoist company Rotary Lift.

Mr Caddeo said that through working with his company’s partners in the US, and using data gathered from automotive bodies in that country, his company could project how the US market would develop as EV ownership increased. In the US, revenue from undercar servicing was $156 billion in 2021 and it is expected to increase to $188 billion by 2030.

Based on the data, he said that air conditioning, 12V batteries, lamps, blades and other under-hood service requirements would remain about the same.

Adam Caddeo

“As EVs become more common, you’ll see items like radiators, transmissions, fuel systems and exhaust systems replacement become redundant,” Mr Caddeo said.

“Over time, you’ll see these parts of the car have a smaller impact on the amount of revenue generated in the market.” 

In addressing negative impacts on the undercar service industry, Mr Caddeo said “your maintenance levels (based on standard 15,000km service schedules) will stay the same, because we’re still going to service vehicles. But there are changes, as oils and some filters may not be required anymore.”

He said that as revenue falls for the workshop in traditional areas, there are new opportunities that will be in more demand and will provide new revenue streams. 

“One of the biggest changes is tyres. Tyre service will continue to grow,” he said.

“For those who have experienced driving an electric vehicle, it comes as no surprise that they can produce substantial amounts of torque from very little engine speed. 

“This will have a negative impact on tyre life. For example, strong acceleration from a low speed, coupled with an EV’s substantial weight (when compared with an ICE-powered vehicle), means we are seeing, based on the data, a 20 per cent reduction in tyre life.”

Another interesting fact that Mr Caddeo reported was that US car-ownership data showed that vehicles were staying on the road longer before being updated – it’s a trend that is also apparent in Australia. In fact, the average age of a car in the US is now 12 years. 

“The vehicles are on the road longer and given manufacturer’s warranties now extend up to seven years with some brands, it’s allowing a greater opportunity to dealerships to see one or even two tyre sets throughout vehicle ownership,” he said.

“The question is: How do dealerships help educate customers regarding tyre condition and the state of alignment?” 

One answer presented at the AADA show was Hunter Engineering’s Inspection Lane – an autonomous inspection lane that can check alignment, tyre condition while taking no fewer than 40 high-definition pictures of the vehicle in less than 10 seconds.

Plus, as autonomous or assisted-driving vehicles increase, there will be a progressively higher requirement for these systems to be calibrated within manufacturers’ specifications. 

“Precision Automotive Equipment is already seeing dealerships and other repairers ask for more ADAS (advanced driver-assistance systems) equipment. That includes ADAS alignment fixtures or diagnostic tools to be installed as standard equipment at dealerships,” Mr Caddeo said.

“We’re seeing a rapidly growing market for ADAS repairs to be performed following a collision or as part replacement,” he said. 

“That makes perfect sense… If you have damage at the front of the vehicle, front parking sensors, radar cruise or even night-vision cameras are situated at vulnerable points and, if you change the windscreen, the forward-facing camera(s) and sensor require calibration.

“In Australia, autonomous emergency braking (AEB) will become standard by March 2023 and a lot of people don’t realise that ADAS systems will be mandatory in all vehicles in the Australian market from 2025.” 

He said that manufacturers have already requested ADAS resets as part of their alignment procedure and two of those manufacturers have purpose-designed technology bays in the workshops to assist with this process. 

“Typically, an ADAS reset at a dealership is around $500 and takes about two to three hours to complete, which includes an alignment of the vehicle. As technology gets faster and diagnostic-tool education increases this will come down to a more manageable timeframe.

“For workshops, even though EVs will reduce certain traditional revenue streams, it is important to recognise that the tyres and wheel alignment business will continue to grow and, with the addition of ADAS system calibration and parts replacement, you will have three great opportunities for the future growth for your service department.”

By Neil Dowling

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