ABeam Consulting Highlights Key Strategies for Car Dealerships to Adapt to the Growing Electric Vehicle Market

(Bangkok, Thailand) As the global transition to electric vehicles (EVs) accelerates, the automotive industry is facing significant changes. In Japan, EV sales remain modest. Still, this number is expected to grow due to increasing environmental awareness, supportive government policies, and the expansion of EV model lineups from major brands. Globally, the shift is more pronounced, with rapid increases in EV adoption in leading markets like China.

　As this shift continues, there is growing concern over its impact on car dealerships, particularly with regard to profitability and changes in sales methods. To better understand these challenges, ABeam Consulting conducted a detailed study analyzing how the EV transition will affect new vehicle sales and [after-sales services, providing key insights and strategies for dealers to navigate this evolving landscape.

Minimal Changes in New Vehicle Sales

　Although EVs generally come with higher price tags than internal combustion engine (ICE) vehicles, their growing market share is not expected to significantly impact overall vehicle sales volumes. While the rise of new EV manufacturers and companies like Tesla may introduce competition, traditional car dealerships are likely to see little decline in sales. The shift to EVs primarily impacts vehicle types rather than overall sales volumes.

Evolution of Sales Methods – What Will Change and What Will Stay the Same

　Despite speculation, the shift to EVs will not drastically change how cars are sold from a consumer perspective. Whether purchasing an EV or an ICE vehicle, buying a car remains a substantial investment, with customers continuing to conduct thorough product reviews and consider various options like warranties and after-sales service before making a decision.

　However, changes will occur in specific areas, such as customer education. Dealerships need to enhance customer education on EV-related topics such as battery technology, charging infrastructure, and available government incentives for EV buyers. While dealerships or distributors may handle the subsidy paperwork, it remains important to ensure that customers understand the benefits and processes associated with these incentives.

Significant Impact on After-Sales Services

　The biggest shift for car dealerships will be felt in the after-sales service domain, where EVs, with fewer components and lower maintenance needs, are expected to reduce service revenue by 13-30% within five years of vehicle purchase. This decline is primarily due to fewer parts requiring inspection and less frequent replacements of consumables like engine oil.

　This reduction in after-sales revenue presents a critical challenge for dealerships, which typically rely on after-sales services for 40% of their gross revenue. Dealerships will need to explore new monetization strategies, such as offering specialized EV maintenance packages, expanding their charging infrastructure, or partnering with energy providers for home charger installations.

Preparing for the Future – What Dealerships Must Do

　As evidenced by the rapid acceleration of EVs in Thailand, the shift to electric vehicles is undeniable, and the future shift is inevitable. Dealerships must prepare now to offset the projected decline in after-sales service revenue by focusing on operational changes, such as investing in EV-specific service capabilities, including insulated pits and electric shock prevention measures for service staff.

　Additionally, dealerships need to focus on retaining more customers for their after-sales services. Currently, only about 50% of car buyers return to dealerships for regular inspections, with the other half opting for third-party service centers or gas stations. Improving customer retention in this area will be vital for maintaining revenue streams as EV ownership rises.

A Shift in Focus – From Sales to Customer Loyalty

　To succeed in the EV era, dealerships must shift their focus from prioritizing sales volume to strengthening customer loyalty and building long-term relationships. Reducing customer attrition in after-sales services will require improvements in service quality and customer engagement. This shift will also necessitate changes in dealership operations, team structures, and success metrics, with a stronger emphasis on customer satisfaction and service retention.

　ABeam Consulting remains committed to supporting automotive dealerships in navigating this transformation. With extensive experience in automotive sales and after-sales service, ABeam Consulting provides strategic guidance to help dealerships remain competitive and profitable in the rapidly evolving EV market.

About ABeam Consulting (Thailand) Ltd.

ABeam Consulting (Thailand) Ltd. is a subsidiary of ABeam Consulting Ltd. – headquartered in Tokyo, with roughly 8,300 richly professional, experienced consultants who have served clients throughout Asia, the Americas, and Europe, providing consulting services in Thailand since 2005. ABeam Consulting (Thailand) with expertise in a wide range of consulting services, including strategy, BPR, IT, Human Capital Management, Outsourcing, SAP Consulting, ESG, and Operational service expertise. We create the future together with corporations and other organizations. As a creative partner leading the way reliably through change, we contribute to industrial and societal change. 

Please contact us at thabmarketing@abeam.com  or visit   https://www.abeam.com/th/en   for more details.