Top 5 Digital Transformation Trends

Top 5 Digital Transformation Trends to Survive Aftermarket Disruptions

Article by Mohammad Yasar
Illustrations by Gan Yee Lee

According to aftermarket study by McKinsey & Company the global automotive aftermarket business value is expected to grow 3 per cent annually, to about 1,200 billion by 2030.

The Automotive Aftermarket is undergoing dramatic changes with evolving customer expectations, acceleration of technological innovation, and shifts in competitive power. Driverless vehicles, Artificial Intelligence, Mobility as a service etc. are some of the trends that are rapidly changing the automotive aftermarket industry. Companies that have swiftly embraced this trend are at the forefront.

Although, many aftermarket players can barely keep up with the technological evolution and changing customer expectations. This is because of their lack of realization for their digital capabilities. If you are one of them, the following are top 5 Aftermarket digital transformation trends can help you keep up with the transforming automotive economy.

1.Changing Vehicle Ownership Model

The ownership models of vehicles are changing. Leasing/Rental and mobility services are increas­ing in popularity, but more importantly, they are moving aftermarket decision making from end-users to professional fleet owners. In 2018 the total volume of the leased assets grew by 6.4% in Europe, reaching €832.6 billion by the end of the year.

Customers today prefer the convenience and limited risk of depreciation to owning their own Vehicle. Although terms in leasing agreements vary, ‘full-service’ models are among the most frequently chosen, giving the fleet owners responsibility for service and maintenance. Professional fleet owners controlling service and maintenance will increase pressure throughout the value chain. This disrupted environment is creating a need for dealers and other plays to review their operating model and discover new ways to operate in such a digital environment.

Annata can help dealers & other aftermarket players in capturing new revenue streams in adjacent markets while implementing operational improvements and digitizing their core business.

Below are some insights to survive this disruption with Annata technology:

Explore New Revenue Streams – Vehicle Subscription-Based Model With a monthly subscription fee, Customers don’t own the car but use it whenever they want. When a customer gets tried with one model, he could flip to another. Annata provides an excellent technological platform and specialised rental/lease management modules that can assist dealers and other players set-up a vehicle subscription service. All the aspects of subscription model such as business operations, including the Fleet management, Service and Customer engagement are well handled with Annata ’s unified ecosystem.

Case study –Brimborg, an Icelandic company, is a sample of a dynamic and flexible business. In the financial crash 2008/2009, they experienced over 90% drop in vehicle sales. By partnering with Annata they turned a big portion of their business into the rental business, utilizing their new and used vehicle stock. They are now one of the largest rental company in Iceland with Dollar/Thrifty rental brand. When vehicle sales have picked up again, they are now larger and stronger organization than before the financial crises. Click here for more details.

Additional revenue from variable service packages – Majority of the monthly subscriptions provide dealers with additional service opportunities as most of them include the variable maintenance packages. Annata ’s advanced Contract management solution helps companies to effectively manage – Service contracts & quotations with variable configuration templates, Prices and validity; it keeps track of all recurring preventive maintenance service schedules, monitors all the service work orders, costs of material, labour, travel and revenues associated with it.

2. Advanced-Data and Analytics – The New Gold of The Future

Aftermarket experts expect data and advanced analytics to become an indispensable asset in the future. The general perspective is that most automotive aftermarket players today are not adequately prepared to take advantage of the big data opportunity. Those who can move quickly and effectively in this space must differentiate themselves from the competition

Annata 365 makes data more useful & meaningful by providing a unified ecosystem that seamlessly integrates CRM, Dealer management system, Analytics & AI into one single business platform. This powerful combination of vehicle and customer data is a new gold of the future and empowers aftermarket players to hyper-target the customer with meaningful predictive maintenance & marketing campaigns.

3. Digitization of Channels and Interfaces

The evolution of Internet-empowered informed customers will likely change the automotive aftermarket. Large numbers of customers are using digital channels to gain a clearer picture of cost and quality. Research shows that 25-30% of end customer evaluate workshops using online channels.

Together, these disruptions invite new opportunities for the aftermarket industry to directly address end customers. Todays, aftermarket players are forced to offer a fully digital customer journey, starting from online booking of service appointments through push notifications on the status of service to vehicle pickup and payment.

Annata ’s Power Platform fully digitalizes all the customer interfaces. The customer can log in to tablet/desktop app, Pick a date and Schedule a service online or they can directly engage with AI-powered chat solution which provides 24/7 instant support, schedules service appointments, automatically create service tickets in back-end DMS system and finally sends an appointment confirmation e-mail. This will greatly enhance the customer experience leading to improved customer retention rate.

4. Emergence of Next-Generation Vehicles

Half of the aftermarket revenue comes from wear and tear parts, vehicle crashes, service and other spare parts. Going forward, the growth of wear-and-tear parts will slow down due to Increased electric parts and software apps. Similarly, crash rates will decrease as a result of enhanced safety. Although the higher use of sensors might increase the average cost of every single crash. Additionally, the aftermarket players should focus on effectively engaging customers with the recall reminders, maintenance services notifications, other extras like extended warranties and service contracts to even out the difference in revenue.

Annata DMS Solution systematically organizes the after-sales data and automatically notifies the customers on all key business events such as upcoming service visits, open recalls, an extension for warranty, insurance and service contracts. This could be a door opening for additional leads/opportunities and a great revenue booster to cope with changing trends.

5. Data Privacy

A research study shows that 80% of customers prefer to self-determine over their data. In future, it becomes very important for the customers to meet the need for personal control over the exchange of their data and increased transparency in data transmission. It becomes very important for automotive players to provide customers with the assurance that no personal data would be passed on (without consent). Furthermore, with increased customer awareness on GDPR, it is becoming very important for all the automotive players to seriously consider the issues of data privacy in the initial phase of product development.

The Annata product team has been busy developing new features to support customers towards data privacy compliance. Ananta’s Data Privacy Solution empowers customers with complete control over their personal data and enables companies to effectively manage Personal data, Data breaches and Customer consents for information collection.

Find out more!

If you would like to find out more about Annata 365, contact us at or look out for the latest updates on our LinkedIn and Facebook pages.

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