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Integrated Vehicle Diagnostics Solution in Automotive Aftermarket

Authors:

Ravindra Hunagund, Lead Consultant, MFGDCG, Infosys Ltd., ravindra_hunagund@infosys.com

Swapnil Vijay Akolkar, Lead Consultant, MFGDCG, Infosys Ltd., swapnil_akolkar@infosys.com

Saurabh Sharma, Senior Consultant, MFGDCG, Infosys Ltd., saurabh.sharma@infosys.com

Snigdha Goyal, Consultant, MFGDCG, Infosys Ltd., snigdha.goyal@infosys.com


Independent workshops have traditionally struggled to keep pace with OEMs and authorized workshops on vehicle diagnostics, tools & technology, vehicle electronic information and quality of service / parts. With EU commission systematically introducing regulatory amendments, such as the EU regulation 566/2011 which mandates the manufacturers to release and share the vehicle related electronic data for identification of exact service parts for the vehicles, a level playing field is being created where the independent workshops and authorized workshops would have to battle out to get the aftermarket share by serving varying needs of the customer. This blog brings out an integrated automotive diagnostics solution that will assist independent workshops in being competitive against the authorized repairers in this ever changing scenario.


MARKET ANALYSIS

Globally, the aftermarket is emerging as a new lucrative area for OEM's revenue as 15% of OEM revenue comes from aftermarket business, which represents 70% of OEM profit. The automotive aftermarket is mainly divided into two broad categories: authorized repair shops (dealerships) and independent workshops. The authorized repair shops are part of the dealer network providing servicing solutions, warranty programs and consuming original parts whereas independent workshops are less expensive alternative to authorized repair shops. OEMs have lost 3% of their global market share in 2015[1]. This has been possible due to the following factors:

1. Release of electronic data of repairs: According to this EU regulation 566/2011, the manufacturers in Europe automobile industry are obliged to release and share the electronic data so that an accurate identification of service parts can be done for the vehicles. The independent workshops would now have unrestricted access to the electronic repair and diagnostics data as is the case with the authorized repair shops. The ultimate goal of this regulation is to provide enough choices to the customer and encourage competition at all levels of the automotive aftermarket value chain.

2. Availability of diagnostics tools: Next generation diagnostic tools have enabled the independent workshops to service and maintain vehicles from various different brands with the same level of service quality as that of an authorized repair shop. The technicians are able to point out the exact problem in the vehicle and save time and cost for both the workshop and the end customer.

3. Collaboration with other service providers: Non-traditional players in the automotive aftermarket such as fleet operators, insurers and leasing firms are signing agreements with independent workshops, to lower their costs and channel the customers to only the contractually agreed upon independent service providers.


Segments_2.png
The market for diagnostics scan tools can be segmented as given in the figure with software based repair tools showing the most promising growth rate of 7.5% by value. The market and future for diagnostics tools looks very promising as the growth rate of the automotive diagnostic end-to-end scan tools market is projected to grow globally at a promising CAGR of 5.6% from 2015 to 2020, growing from US$3.83 Billion in 2015 to US$5.02 Billion by 2020.


Current Challenges

Challenge#1 - Lack of E2E Diagnostics: Due to absence of any single integrated aftermarket solution for fault diagnostics to parts ordering, difficult problems lead to reduction of the workshop profits and which in turn leads to backlogs which can potentially damage the overall customer satisfaction. It has been estimated that these problem cars have the potential of costing workshops $24,750 of lost business in a year

Challenge#2 - Increasing Vehicle Complexity: It is estimated that a modern vehicle has the computing power equivalent to the system which had guided the Apollo astronauts all the way to the moon. 72% of workshop owners feel that keeping up to date about the latest vehicle technologies and electronic systems is challenging

Challenge#3 - Local Fault codes to OEM codes mapping: OEM's fault codes to independent diagnostic fault codes mapping is inconsistent. If these advanced workshops are to compete with the main dealers, they would require a combination of the following three things: Getting OEM-trained skills, technology and all the vehicle information

Challenge#4 - Lack of clarity in ordering parts for given faults: Due to high level of inconsistency between the fault diagnosis and the parts required for rectification, incorrect mapping of OEM parts numbers to independent retailers there is a higher rate of parts return/re-ordering


Point of View Solution

The challenges faced by the independent workshops can be tackled by using cloud based end to end diagnostics solutions that provide a common platform for scanning a vehicle, detecting faults, ordering parts, publishing reports and generating invoices for the customer. To tackle all the challenges discussed in the previous section, Infosys based on a client engagement and market study proposes a cloud based diagnostics solution as below:


Segments_3.png

1. Workshops can service vehicles across multiple vehicle brands without having to train the technicians especially for any make or model. Having a single guided workflow application from fault detection, correction, technical data, parts ordering till invoicing can save cost and effort for the workshop and the customer

2. Tool can be accessed over laptop/ tabs/ smart phones and can be connected to any vehicle via a VCI (Vehicle Communication Interface)

3. The workshops should be required to just purchase VCIs and license for the tool and pay based on the subscription taken.

4. The tool can pull together data from multiple databases for getting repair, maintenance, diagnostics, faults-parts mapping, parts and other such information on a single platform, saving both time and cost for the workshop and the customer

5. A comprehensive diagnostics with intelligent fault-tracing can list down all the faults detected on the vehicle within minutes of starting the scan giving the technician a strong starting point towards servicing and repair of the vehicle

6. The tool can be linked with distributor's part catalog for parts selection and ordering

7. The customer can look at the readings from vital measures of the vehicle and get a printed report of the complete diagnostics

8. The tool can monitor the Telematics data transmitted from the vehicle and post maintenance alerts to the customer

9. The tool can also send scheduled maintenance alerts to its registered customers to increase customer satisfaction levels and have longer customer retention period


Conclusion

With favoring regulatory changes towards release of proprietary repair data, advancement of technology in diagnostics tools and reduced TCO owing to cloud based IT solutions, independent repair shops market is perfectly poised for benefiting from integrated solution covering diagnostics, fault tracing, symptom analysis , parts recommendation, integration with parts distributor's ERP and provide billing options. While a few solutions exist in the market currently, there is a definite chance to focus on extending the capabilities (Pass Through, predictive maintenance etc.) and providing end to end solution targeting repair shops giving them a competitive edge against authorized dealers.


References

http://www.adlittle.com/downloads/tx_adlreports/AMG_Automotive_after_sales_2015_01.pdf

http://www.marketsandmarkets.com/Market-Reports/automotive-diagnostic-scan-tools-market-1299.html

https://www.bcg.com/documents/file111373.pdf

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