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New Mobility An Opportunity For Automotive Service Industry

New mobility services will be the new segment that will attract a major share of value generation in a dealership

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The number of vehicles sold online on e-commerce websites is increasing with time. On an average, a car buyer spends 60 percent of her entire research time online. 1 in 4 customers is not satisfied with the present car buying process and more than one-third would consider buying a car online. The technology change to electric vehicles will enable a reduction of approximately 70% of maintenance requirements. The number of mechanical parts inside a vehicle powertrain will decrease by about 99%. Lakhs of lines of codes will be written and produced for vehicles to connect with each other and infrastructure. Artificial intelligence will be the major focus for building autonomous vehicles. A huge amount of generated data per second will be analysed, segregated and captured through big data analytics and machine learning. 

Ever wondered how will the vehicle service industry operate when the automotive ecosystem witnesses such a revamp? With a reduction of 99% of mechanical components in an electric vehicle, will this industry die due to the shrinking of potential clientage? And if it has to survive, what changes does service arena need to make to still be relevant? The answers to these questions need to be understood with two approaches: The Business Model and The New Mobility Services.

The Business Model

The service arena has been a dynamic one with a number of offerings being added from the straightforward approach of vehicle sales and service. The arena today offers a wide array of facilities including vehicle parts, finance, insurance, resale, accessories and customization options. These offerings make up the majority of value amassed by an automobile dealer. But as we will see changes in the mobility ecosystem in future: consisting of electric, autonomous, shared and connected vehicle, the business model of a dealer will change. New mobility services will be the new segment that will attract a major share of value generation in a dealership.


Comprehending the potential operating models of future companies, we can say that majority of the vehicles will be sold online. The service requirements will decrease intensely for mechanical components and upgradations will be done over the air. Rather than the number of kilometers covered by the vehicle; vehicle diagnostics and driver habit mapping will become the main checkpoints to visit a dealership. Vehicle financing, insurance, and accessories markets will capture a higher place in the value table. Vehicle resale market will attain better traction due to the changing consumer mindset and living pattern. But the biggest disruption will be created by the new entrant: ‘New Mobility Services’. 

The New Mobility Services

The service industry will revolve around the four key factors that will create a new mobility ecosystem: Electrification, Autonomous cars, Digitization and Mobility as a service.   

With manufacturers shifting their offerings from conventional sources to new mobility source, the service industry too would have to leap from engines to batteries. Reskilling will be the key for dealers to adapt to this change quickly and start optimizing their resources. Distribution networks will have to be redesigned for maintaining a balance between demand and supply. Companies will be looking to sell and market their products online. Service industry will have to amend its path by digitally focusing on consumers and maintaining relationships. The channels to sell a vehicle will converge and consumers will experience the ease of buying. The connected car will enable the dealer to understand the real-time diagnostics better. She will be able to map this data and share it with the consumer for product rectification and maintenance. When an autonomous car will visit a dealership, a number of software and hardware engineers at the dealer’s end will ensure that the car is safe, non-hackable and without any possible bugs. Moreover, service industry will open up to becoming vehicle lenders and ride handling companies. The dealerships will create subscription-based lending application & infrastructure and will modify their revenue stream from per car basis to per kilometer basis. 

In future, the service industry will be governed by those who understand the digital world, adapt to consumer e-commerce preference and deliver customer-centric services. For dealers, new mobility is an opportunity to streamline their operations by eliminating non-value adding functions and entering wider and more relevant service portfolio that contributes to better margins. The change is inevitable and every shareholder is amending her ways to stay relevant in the dynamic future market. Time is now right to take a better stance. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Pranav Jain

The author is an independent automobile consultant.

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