French firm sees the simplicity of electric vehicles resulting in makers losing aftersales revenue

The rise of electric vehicles threatens the car industry as we know it, according to PSA Group electric and connected boss Helen Lees.

“EVs are far simpler [than internal combustion engined vehicles]," she explained. "They need less parts, less time in the workshop. Ultimately, it means less time in aftersales. That’s why we’ve chosen to diversify into areas such as shared mobility.”

PSA, which owns the Peugeot, Citroën, DS, Opel and Vauxhall brands, already offers its Free2Move car sharing service in Paris, France, where 550 of its vehicles are available via a smartphone app.

Lees, talking at today's Auto Futures event, said: “We haven’t commercialised a lot of [mobility services] in the UK, but we will do, such as Free2Move, which encompasses anything complementary to car ownership or substitutes such as leasing or rental, but also our use of telematics and technology to enable peer-to-peer car-sharing. On our new vehicles, you can get a digital key so you can assign the car to others remotely.”

Lees added that despite the inevitable decline in aftersales revenue in the short-term, the increasing sales of EVs does bring opportunity.

“Whereas a lot of consumers might service their petrol or diesel cars themselves," she said, "they tend to come back into main dealerships for EVs, because the aftermarket operators aren’t necessarily ready for electric to the same extent as manufacturers are.

“We’ve got a short-term opportunity for aftersales where hopefully we can build loyalty and prove ourselves and break some of the myths about being ripped off by mainstream manufacturers.”

Lees said the loss of revenue in aftersales depends on EV market penetration, adding: “Longer-term, we'll sell fewer parts and less service hours on our EVs. When you look at the service plan pricing for Peugeot e-208, for example, it’s a third cheaper than the service plan for the equivalent petrol or diesel 208.

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“Obviously, that helps build the total cost of ownership model at the moment, but longer-term, maybe our dealerships will become mobility hubs where there's dealership-based rental.”

Lees added that PSA will next year launch a package that will allow leasing customers to rent a petrol or diesel car as part of their EV finance package.

Customer delivieries of the e-208 will commence early next year, and there will be an electrified variant of every PSA model by 2025.

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Comments
9

29 October 2019

The message is finally filtering through

29 October 2019
xxxx wrote:

The message is finally filtering through

 

We have only YOU to thank, your persistence, fortitude, stamina, staying power, determination, grit, energy, charisma...wait...not charisma...but everything else though...

29 October 2019

Currently car manufacturers charge a leg and kidney for after sales care/service.

29 October 2019

Are we supposed to feel sorry for PSA and others. Obviously by looking forward to an increase in EV's I was foolish to think that less parts and less time in the workshop was a good thing for all of us, including the planet.

Surely lower manufacturing costs ( In the long term), plus lower warranty costs benefits the manufacturer no matter what model of ownership / rental / lease proves popular in the future. 

Lower lifetime revenue per unit by a manufacturer does not mean lower profitability if the overall business model is correct. The comment that they have basically a few years to rip off the early adopters before independents gear up is so disheartening. Perhaps if they set out with the intention of not ripping off people the independents would not have room to prosper in future.

I think I will avoid PSA brands in future. I know they may not be the only ones to think that way, but I shall look for firms that at least give the illusion that they are looking to benefit the customer. 

29 October 2019

Less time in the workshop means less profit for the manufacturer. Does that mean PSA deliberately make their cars less reliable to increase their profits?

29 October 2019
Andy_Cowe wrote:

Less time in the workshop means less profit for the manufacturer. Does that mean PSA deliberately make their cars less reliable to increase their profits?

 

YES, they go out of their way to make their cars less reliable, than all other OEM's...happy now you have that confirmation?.

29 October 2019
I think this ridiculous! She is essentially saying that what is great for the consumer is bad for the maker! The increasing complexity of cars has been a goldmine for franchised dealerships. I remember my dad and I servicing his car on the driveway. Everything was accessible and you only visited a garage for something more serious.

29 October 2019
PSA group: 'we have a piss poor EV plan, better make some shit up'

29 October 2019

The car industry as we know it doesn't have a divine right to exist.  If something better comes along it will fall by the wayside and be replaced.

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