New Tech, new Customers, the performance workshop, what’s changed and is it viable?
Performance upgrades are nearly as old as cars themselves dating back over 100 years. But how times have changed. The last decade has seen a huge change in the performance industry, for better or worse, it is without doubt though the performance workshops of today have a difficult task keeping up with technology, the volume of makes and models and customer expectations. The advent of the internet has bought with it many changes, forums, Facebook, eBay, Instagram, online shopping and drop shipping. On face value these things may seem to be innocuous and even beneficial to the customer, the customer can price check and purchase from numerous places and has access to information from an unlimited number of sources. This is not all great news for the workshop and maybe not all so rosy for the customer when you have a deeper dig into it.
Automotive mechanical repair labour rates have been undervalued for decades, customers may disagree but when compared to other trades such as electricians and plumbers this is the case. Most electricians and plumbers have lower overheads, require less factory space and fewer tools, many operate from a commercial vehicle. A typical workshop will have multiple hoists, a range of hand and power tools also specialised diagnostic and vehicle tools. A performance workshop will have a chassis or hub dynamometer and fabrication tools costing hundreds of thousands of dollars in addition. Many customers seem oblivious to the costs of running a performance mechanical business, and while dealerships are charging $150+ per hour the mechanics on the tools are lucky to get $40 per hour.
Mechanical workshops supplement the labour with a markup on parts, margins are usually sufficient such that the hourly labour rates can be kept lower. In the performance industry the availability of parts online has reduced the margin and has eaten into the profits of the Performance workshop. The viability of the performance workshops with margins dropping lower than 10% is severely compromised. Many Performance workshops no longer supply parts as there is barely sufficient margin to cover the bookkeeping costs without any consideration for warranty, these workshops have the customer supply parts hoping the customer will accept responsibility for faults and failure. The reality is it is difficult for the workshop to isolate itself from part-based failures where they agree to fit the part, by fitting a customer supplied part as the professional installer the workshop assumes liability and responsibility that the part is suitable for the job. Performance work tends to have the highest risk for the lowest financial reward, and although the work can be fun and exciting many customers are of the opinion that the workshops should be offering increased discounts for the privilege of working on their vehicle and unfortunately many workshops, both performance and regular are fearful of missing out on work and take on more work at lower margins than they should. In the long term it is unsustainable, and the result is workshops open late into the evenings trying to keep ahead of the bills and the workload generated by taking on too much or to satisfy ever-increasing customer demands.
Information being readily available to the consumer these days in so many forms and sources, yet it often lacks the substance or knowledge available from a performance workshop with many years of experience. Consumers look to Forums and social media groups where there are a multitude of different individual experiences, this lacks the compound knowledge that comes from multiple learned experiences from trying many different things that can be achieved in a workshop. The huge amount of advice available can be confusing and when researching customers tend to be biased and place greater emphasis on the advice that suits their needs or budget as to what is the most accurate or appropriate.
The individual experiences of many are less valuable than the many experiences of one. Take the example of camshafts where 5 individuals upgrade their camshafts in 5 separate vehicles that were previously stock, they all perform better than stock but none of the 5 individuals have the experience of all 5 camshafts, that can only be found in a quality performance workshop, so how does any one of the 5 individuals honestly evaluate their choice in comparison to the other 4 options?, they can’t, they don’t have the experience. Each individual will tend to believe they have made the best choice based on the information they have, rarely will you find someone on a forum willing to confess they did not make the best choice even if they felt it to be true.
Social platforms like YouTube have made it possible for consumers to educate themselves on the fitment of aftermarket components, the compressed format has meant many difficult and time consuming tasks that require experience and knowledge are trivialised in both time and complexity in such a way that consumers think a large complex task such as engine rebuild or restoration occurs over a much reduced time to what it does as they watch YouTube videos cut down to 20-30 minutes. This can give the customer an unrealistic idea of the cost and complexity. This has also created a situation with older vehicles that have several new performance parts fitted with general wear and other mechanical issues, customers are expecting the same results as may have been achieved on YouTube or other social platforms. This often unfairly becomes the problem of the tuner who is expected to tune some new parts in a vehicle with an aging engine and aging sensors. Consumers who have committed their budget to a handful of online parts now have the situation when confronted by the tune shop that they need fuel pumps, filters and 02 sensors, and that’s all if they are lucky.
There has been a move towards social influencers who are paid to offer product feedback, this has meant there is less truly objective reporting on products, so much so that social influencers leverage businesses and product manufacturers for discounts and freebies in exchange for favourable feedback. This has existed in previous forms in the past as this trend began in the 90’s with product manufacturing groups taking over automotive print media to advertise and favourably report on their own products. These days it is everywhere, finding the truth has become nearly impossible.
Social media has been reduced to a series of short “reels” that either highlight successes or failures but never show the journey. The highlight of a stock engine car boosted to run a 9 second pass doesn’t show the effort or failures to get there, consumers have a detachment from the time, effort and risks associated with performance upgrades and having not experienced the journey believe such feats are easy and without risk.
Several performance workshops I know of are shifting to smaller workshops with reduced staff and a more discerning select customer base realising there is no value in chasing the migratory social media crowd that expect the impossible on a shoestring budget or want to leverage perceived celebrity for discounts, the loyal and respectful clients are getting the benefit of the wisdom of years in the performance industry. Many are closing or moving back to more traditional more profitable auto repairs. Newer and younger shops continuously pop up and compete for the same Insta fame market, they continue to undercut each other, functioning off impossibly low margins working increasingly long hours to keep ahead and have no financial or time buffer for when the shit hits the fan, it is an impossible scenario that can only end in poorly for someone, either a disappointed customers or burnt-out workshop staff. Pandering to customers who think they are doing the workshop a favour by allowing them to work on their car.
Consumers in their 20s and 30s new to the performance aftermarket grew up in the back seat of and leant to drive in a different generation of vehicle to those in their 40s and 50s. Old vehicles were less reliable, carburettors and manual chokes, cars would stall, overheat and break down, people came to expect it, especially in the aftermarket. New vehicle technology that makes a modern car the smooth reliable powerful thing that it is does not always transfer to the aftermarket. Today the expectation is that every car will be able to make another 200-300-400 hp and beyond, this is despite the higher starting point, and to do so with the same reliability and longevity. Consumers that have grown up with late EFI powerful cars are not educated to except the compromises of a heavily modified car, they do not understand how manufacturers build and test cars extensively for cost vs reliability nor do they realize the thousands of development hours the manufacturer puts into delivering these vehicles. The technology and parts do amazing things however the level of complexity to correctly modify and tune these late model vehicles is ever evolving at a rate exceeding the knowledge and budget of many consumers and workshops. OE’s put teams of people on calibrating a late model over many months yet consumers expect the aftermarket tuner to perform the same feat in a matter of hours often with a collection of parts in a worn-out vehicle.
A customer sees a social media post of a turbo LS that makes 1000hp on stock internals, so they believe that is something they can achieve, they ask on a social network and get 100 opinions on how to do this, here they can choose the answer that best suits them as opposed to the most well researched or tested, typically the answer that suits their budget and desires is the one selected. They buy a bunch of parts and try themselves or bounce from shop to shop spending 3 times what they thought, blaming shop after shop for not being able to achieve what they saw on social media or for having component failures, maybe eventually they get there without hand grenading a few engines and transmissions but the engine they now have has worn ring lands and the bores are deformed from excessive cylinder pressures, the engine uses oil and pushes water past the head gaskets and they now have to build the motor they should have built in the first place that was fit for the purpose.
The path currently travelled seems a difficult one, with neither the customer nor workshops being happy, customers bullying workshops using social media, workshops expected to work for the privilege, I am unsure where this goes from here, but I see no winners.