Industry perspective: Q&A

Industry perspective

WHILE WE OFTEN GET VIEWS ON HOW THE ECONOMY IS DOING AS A WHOLE, EACH SECTOR HAS ITS OWN CHALLENGES.

Auto Channel decided we’d ask people in our industry for their views, starting with Pat Tasker from Inspect-A-Vehicle, in Wanganui, Ben Coote from Auckland’s Superior Automotive Service, and Ben Watson, from Mainstreet Transmissions.

PAT TASKER

Company Director / Inspect-A-Vehicle, Wanganui

What is the outlook for your business over the next 12–24 months? I am keeping an eye on the trends and things are slowing down slightly. Our business is one where there are not a lot of forward bookings (further than a week), as we concentrate on shorter-term work like WOF, services, and quick repairs. I believe our current staffing levels are at a maximum level. We are looking at possibly expanding into a supply and marketing business to combat any drop off in the repair arm of our business.

How have supply chain issues affected you? Generally we have been OK in this area. I do spend some more time sourcing parts, especially for the European vehicles. I will say that there’s one courier company, a national one, we avoid if we can as they are always slower than the rest by at least a day.

Dealer parts are generally the slowest when they are on backorder but overall, pretty good.

What measures can or are you taking to mitigate supply chain issues? I’d say have a good relationship with your main day-to-day suppliers and do not be afraid to look at the Australian market for replacement parts when they are not available in New Zealand. I recently purchased a rebuild kit for a fuel system out of Victoria. I ordered it about noon Monday and it was fully fitted by Thursday close of business, after having arrived Thursday morning. I thought that was pretty good.

What kind of price increases have you seen in materials or product costs? Bulk oil has been increasing, as have all the other items, but as the oil is a big ticket item it is more noticeable. I have not measured the increase but estimate it’s about 30per cent higher than 18 months ago.

Is the shortage of labour affecting you and how are you addressing this? We have a staff of five on the tools and have just lost a fully qualified staff member. He has been with us for eight years but was motivated for a change by the lure of overtime in the heavy machinery industry. A replacement WOF inspector is very difficult to find.

We have school leavers come in and do gateway experience work and if they are good and keen we look at starting them on an apprenticeship. We currently have two apprentices — one year and three years.

As a result of the qualified staff leaving we will reduce some of the bigger jobs we take on so we can focus on the quick work. Bigger jobs do not provide a great deal of profit when compared to the level of risk you take on with them. The old story: too many eggs in one basket for the big jobs.

What changes have you made on the e-commerce front over the past two years? We have a good website that we keep updated, along with a Facebook page. The best thing we have done is have an online booking request on the web page.

It has really taken off and we get a high number of enquiries through this system. We use texting to inform customers of their job status and finished price. This works really well too as there are no surprises when they come to pick up their vehicles .

To what extent is this changing the way you do business? I have noticed there is a high number of customers now making first contact via Messenger through our Facebook page. A lot more first contacts are also being made via our website.

There is more reliance on our office staff to book jobs and accurately estimate the time a job will take so we do not overbook and let our customers down.

If I think we are going to have a slow week, I can purchase an advertising campaign from Facebook

Efficiency is a thing that can be measured in differing ways. We look at the week’s profit jobby-job rather than count charged out hours

for around $15 that reaches about 5000 people. We usually get a number of jobs via this method. It’s better than the local papers because you know exactly how many people have read the advert.

Is competition increasing in your industry or does consolidation mean there is less of it? I am not sure we have too much immediate competition that affects us greatly. Competition has not been increasing for sure. Certainly there are lots of competing garages for repairs but we are the only WOF-focused small garage in the immediate area. All our advertising reflects this. It’s the point of difference for us.

WOFs are our lead to repair work. We compete with the big WOF providers but we make sure we have a better pricing position in the market and give better on-the-spot service.

The pressure to operate more efficiently is always there. How have you addressed this? Efficiency is a thing that can be measured in differing ways. We look at the week’s profit job-byjob rather than count charged out hours. To get eight hours charged out per day per staff member is a difficult thing to achieve, so I choose not to look at that measure alone, but rather our overall profitability.

Breaks are a thing that stop the momentum of a job so we do not have set break times. We have great buy-in from our staff. Our staff stay on their job until they decide they need a break. We do not have a set lunch time or break time. They take a break when they want to, and when it fits into the job they are doing. There are never any questions asked about why they are taking a break. The same goes for lunch times. They decide when, but it is an expectation they take a break. It is what I describe as a ‘high-trust model’. As a recognition of their efforts they get lunch shouted by the company every Friday and we all knock off at 3pm on a Friday.

BEN COOTE

Director / Superior Automotive Service

What is the outlook for your business over the next 12–24 months? Good. Expecting more growth!

How have supply chain issues affected you? Not really too badly, but some increased lead times.

What measures can or are you taking to mitigate supply chain issues? We’ve used a government small business loan to bulk-buy products we will use over the coming financial year. What kind of price increases have you seen in materials or product costs? Lots. Everywhere!

Is the shortage of labour affecting you and how are you addressing this? Yes! We’ve had to temporarily close one branch, and import staff.

What changes have you made on the e-commerce front over the past two years? None.

Is competition increasing in your industry or does consolidation mean there is less of it? Eventually there will be less competition.

The pressure to operate more efficiently is always there. How have you addressed this? We’ve upgraded our accounting system with time clocking, so staff have to clock on/off jobs, which makes invoicing accurate.

BEN WATSON

Director / Mainstreet Transmissions

What is the outlook for your business over the next 12–24 months? Our core and general business is looking positive, we’re getting a lot of inquiries and we are continuously looking at ways in which we can improve our service to our customers. This includes ways of communicating and also ways in which we can get the best value for money for our customers.

How have supply chain issues affected you? We have definitely seen a change in the way we do business in the last 12–24 months. Instead of accepting this change and potentially losing work we have actively looked for different ways to source the inputs that we need. This has in fact turned into a great opportunity for us, albeit with a little bit more work involved to get into the groove. What measures can or are you taking to mitigate supply chain issues? We have been using more suppliers than usual. This has meant that our ordering process has changed. As a result we have had to be better at managing our customer expectations on delivery of their vehicle.

What kind of price increases have you seen in materials or product costs? We have seen a price hike across the board, but it does feel like they will stabilise soon — when is anybody’s guess though?

Is the shortage of labour affecting you and how are you addressing this? This has been an issue for a long time in our industry. I believe we need to be better at taking on and training new talent. We are lucky at Mainstreet that we have a great team and that we’ve been together for a long time. We have taken the approach of looking after the staff that we have, so that we can continue offering our customers a great service.

Is competition increasing in your industry or does the consolidation mean there is less competition? It doesn’t feel like we are facing a huge amount of competition. A lot of our work comes from referrals, so a customer has made up their mind based on the trust from the referrer. You do see new places pop up sometimes but on the flip side there seems to be enough work to take that on. There are a lot more cars on the road and this doesn’t seem to be easing, so competition is not really a problem.

The pressure to operate more efficiently is always there. How have you addressed this? At the start of Covid we took on the task of implementing a new system. It was completely new software, and we received training on how to effectively do our jobs, both in the office and in the workshop. We have seen a huge amount of efficiency gains from that, and cannot recommend this highly enough — it has changed the way that we think about every job and given us the competitive edge that we needed to grow. There is still more work to do in pushing this out more into the workshop but the system has given the foundation to be able to do this — we can now look at continuously improving the way that we do things.

Would you like to share your view on the industry from the point of view of your business? If so visit autochannel.co.nz and get in touch.