Breakdown assistance firms are caught in a perfect storm of technological, behavioural and commercial disruption right now, severely challenging their profitability. With modern vehicles breaking down less often and a growing awareness of dual cover through automakers, insurance policies and brand assurers, consumers are questioning the value of rising membership fees while also shifting away from car ownership.
At the same time, breakdown assistance companies are grappling with seismic industry changes: EVs with fewer mechanical components are on the rise, connected cars are enabling maintenance services that threaten to negate roadside products, while digitalisation challenges their legacy systems and capabilities.
It’s not all doom and gloom though. With residual brand loyalty and a highly skilled patrol force, breakdown companies can turn things around—as long as they stay alert to the landscape ahead. Here’s how.
Breakdown assistance companies are grappling with seismic industry changes
Own the EV assistance space
With the UK set to put 10 million EVs on the road in the next ten years, there’s a real opportunity for the breakdown assistance sector to become the authority in a fragmented EV space. For example, brands could develop a digital assistant that helps drivers manage EV ownership with advice around battery care, range optimisation, and by mapping relevant charging points with information on fees. They could also consider developing an energy tariff tool for customers to compare and select best tariff rates, or partner with car repair services and energy companies to provide an end-to-end service for EV maintenance. This would also enable the development of products and services to help customers wanting to buy or sell second-hand EVs (another up and coming market trend).
Use data to shift from breakdown assistance provider to maintenance platform
As well as eyeing demand in the EV sector, enterprising brands need to harness smart car connectivity. Companies such as the AA are encouraging their members to develop a more proactive relationship with their vehicles via platforms that can prevent, predict and report breakdown issues. These could alert drivers to mechanical faults and warnings as soon as they occur, making servicing an on-demand (rather than annual) process, and minimising the need for breakdown assistance. When roadside support is required, the same data capabilities could surface diagnostics in contact centres, enabling the dispatch of the right resource, fully briefed on the likely problem.
To prosper, progressive breakdown assistance companies must move further up the value chain from service provider to partner
Provide strategic support for B2B customers
Deep learning processes really come into their own in the increasingly complex fleet space. Breakdown assistance firms could develop and sell products that predict fleet availability and optimise lifetime value. Real-time insights could also provide manufacturers with rapid, high volume understanding of the performance of new models and software versions, allowing real-time fixes to engine management systems and other components. Business models based on outcomes such as pay-per-efficiency would enable the risk to be shared, making market penetration easier.
From provider to pioneer
Breakdown assistance companies stand on a precipice right now. Managing the leap successfully requires brands to become pivotal platform players in eco-driven movements such as EV maintenance and shared mobility. Vehicles will become ever more connected and autonomous, making the task of managing their lifecycle a growing challenge for owners and drivers. To prosper, progressive breakdown assistance companies must move further up the value chain from service provider to partner: working alongside consumers, B2B clients and society at large to take the lead in this bold new era of change.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Trevor Didcock is Chair of innovation consultancy Futurice Ltd
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