Portals set to grow as automotive sector reacts to new EU legislation

Software developers and service providers are expecting rich pickings from the automotive sector as it faces up to the fallout from the new European Block Exemption legislation reform (the new EU directive governing car sales and servicing). And portals are likely to be the favourite development route. IBM, for example, has already announced portal systems aimed at the vehicle OEMs, dealers and the expected new market entrants, designed to make them more adaptive to industry change and help them build and maintain all-important long-term seamless relationships with their customers efficiently and at lowest cost. Its solutions include: an after-market portal and a fleet management portal. The former is for new entrants and existing dealers, enabling them to, for example, purchase parts, get technical information and other services, etc all on-line. The fleet management portal is for building and maintaining relationships between OEMs and fleet managers, traditionally left to dealers, but specifically playing to dealers’ strengths in terms of fulfilment, personal contact and handling customers’ problems. IBM’s launches follow publication of its research, conducted by NOP, which polled 1,050 consumers and 75 fleet managers in the UK, France and Germany. Its survey predicts a higher than expected customer switch to approved brand-independent operators, despite OEMs’ extended warranty agreements. IBM is not alone in concluding that this is bound to prompt an industry-wide shake-up for the European franchised automotive dealership networks. It’s also not alone in warning that dealerships that don’t change for the newly deregulated market could face significant revenue losses from new competition – in a European after sales services and repairs market which is worth around eur 12 billion, according to EC figures. While franchised or manufacturer-owned dealerships are currently the outlet of choice for servicing and repairs, up to 85% of fleet managers and 45% of private consumers would consider changing to approved, brand-independent garages, says the survey, to gain price advantages. And car manufacturers traditional dealer servicing-based manufacturers’ warranties seem to cut little ice. IBM concludes that, with new regulations in place, high-volume manufacturers will have to fight for business. Mike Woodward, IBM’s automotive retail, sales and after-market leader in Europe, says: “We’ve already seen changes in the way people buy their cars across Europe. Our research shows that with the block exemption reform, motorists are ready to leave dealerships in large numbers for servicing elsewhere.” He continues, “It’s clear that the sales and after-sales segment of the marketplace is about to enter an era of unprecedented change, with new entrants looking to gain a substantial foothold. Motorists can expect increased contact from car manufacturers as they try to maintain long-term relationships.”