Australia’s new vehicle dealers operate under franchise arrangements with the manufacturer and many operate multi-brand dealerships. In December 2006 the Australian Automobile Dealer Association (AADA) estimated that there were 1299 dealers in Australia, with 2134 franchises held, operating out of 1452 workshops (including satellite sites).
In 2007, the IMRAS Consulting Group estimated that there were 19,563 independent repairer workshop sites in Australia. This includes general motor vehicle servicing and tuning as well as specialist areas such as air conditioning and brake servicing, automatic transmission servicing and LPG fitting. Tyre chains that complete mechanical repairs and mobile repairers are also included in these figures. At present, competition in the independent aftermarket repairer segment of the industry is very high and is based primarily on service and price. The sector is also dominated by a large number of small businesses with over half of the workshops in Australia not part of a major chain. In addition many of the outlets of the automotive repair chains are independently owned or franchised. The location of independent repairers generally reflects the population distribution and the number of vehicles in each state.
The number of repair jobs completed per annum is estimated at 20 million. The AAAA estimates that over 60% of in-service vehicles are serviced in the independent aftermarket and around 70% of the replacement parts and accessories sold in Australia are from channels external to the motor vehicle dealer networks.
A key role of the independent aftermarket is to provide cost effective and quality servicing of vehicles, particularly those older than three years that are unlikely to be covered by statutory or extended warranties. The depth and breadth of the independent repair network, which has over 10 times the number of retail outlets than the dealer network, also ensures that consumers in regional and rural areas of Australia have access to cost effective repairers within realistic travel distances, which is not the case with dealer networks due to their limited footprint in rural Australia.
As demand for vehicle service is clearly and significantly higher than the capacity of the authorised dealer networks, a decline in the number of independent repairers will result in longer lead times, greater travel time and costs and a significant increase in the cost of vehicle servicing and replacement parts for Australian motorists.
It is clear from the above statistics that given a “level playing field” the independent aftermarket competes favourably with the dealer networks of the vehicle manufacturers by providing conveniently located, high quality parts and service at competitive pricing.
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