STRONG RECOVERIES AND HARD HITS
The two step auto workshop economy
While Melbourne and Victorian automotive service and repair businesses have been severely impacted by ongoing COVID-19 restrictions, workshops in the rest of Australia have staged a strong recovery, in some cases back to and exceeding pre-pandemic levels.
The Australian Automotive Aftermarket Association (AAAA) recently commissioned ACA Research to undertake a survey of more than 200 auto service and repair workshops on the ongoing effects of the COVID-19 pandemic from May through to July.
This is the second COVID-19 Impact Survey conducted by the AAAA, as part of its responsibility as the peak aftermarket industry body to monitor and support the health of the Australian service and repair sector.
“This latest survey provides the most up to date understanding of how workshops have been fairing and there is unsurprisingly a significant variation of impact across Australia,” AAAA Chief Executive Officer, Stuart Charity, said.
“We have also seen changes in work practices as workplaces adapt to ‘our new normal.’
“These new findings help support the industry, and form part of our ongoing dialogue with Governments about how the sector is fairing and the support the industry requires.
“We need to ensure our industry is represented for the large contribution it makes to the economy; the service and repair sector employs more than 150,000 people in over 23,000 businesses across the country.”
For Western Australia, South Australia and Northern Territory, with little COVID-19 impact during May through July, business has returned to parity with pre-pandemic levels.
In fact, 27 percent of responders said they were busier than they were prior to COVID-19.
Although the recovery is still occurring in Queensland and in New South Wales/the Australian Capital Territory, 30 percent of Queensland businesses and 21 percent of NSW/ACT businesses have reportedly rebounded with higher levels of business than pre COVID-19.
At the start of May, New South Wales and Queensland workshops saw a reduction of operating hours but encouragingly in July, New South Wales workshops were all back at operating normal hours, with only seven percent in Queensland still operating at reduced hours.
“Most states and territories are seeing a return of close to, or even stronger than pre pandemic levels,” Stuart said.
“This rubber band effect we are seeing is a result of customers returning after holding off on service and repair through restriction periods.
“It is worth noting that across the board the recovery process is occurring with a very cautious approach.
“The data shows that 25 percent of workshops have less staff than before the first wave of COVID-19.
“This is likely because of the continued uncertainty across Australia of how the pandemic will play out over the coming months and into 2021.
“Victoria has been severely impacted by the restrictions imposed over the last few months. Melbourne metropolitan businesses in particular are going to need significant support to rebuild.
“I am confident that pending restrictions easing over the coming months, that we will see a less immediate but still noticeable swing in customer confidence as we have seen elsewhere across the country.
“Due to the hit however, recovery is likely to take longer in Victoria.”
To help mitigate the impacts of the pandemic, there have been key philosophy changes across the country for workshops.
Ninety three percent of workshops are now sanitising vehicles as standard practice and 80 percent of workshops offer contactless pick up and drop off services.
Marketing levels have also increased, with businesses actively promoting their services to customers. For example, SMS messaging to customers saw an increase from 58 percent in May to 77 percent in July.
Data on the government support and satisfaction with the government response to the pandemic was also collected in the survey.
“There is a total of 58 percent of workshops who are accessing JobKeeper. Encouragingly, 65 percent of workshops are also accessing Government Investment Incentives including instant asset write off, and accelerated depreciation deductions,” AAAA Director of Government Relations and Advocacy, Lesley Yates, said.
“Unsurprisingly, when asked about the satisfaction of Government response to the crisis, the survey showed a wide variety of satisfaction.
“Australia wide, 80 percent of workshops have been satisfied with the Federal Government response.
“Victorians were the least satisfied with the level of response, but many are still largely positive about how the crisis has been managed.”
“The AAAA will continue to monitor the health of the service and repair workshop sector and ensure our advocacy efforts and services best support our members and the broader industry through these challenging times.”
A third Australia wide COVID-19 Impact Survey will be commissioned by the AAAA in October to gather another important snapshot of the sector, hopefully with further positive news.
To view the COVID-19 Workshop Impact Research findings for May through July, please visit www.aaaa.com.au