Software-related updates present growing revenue stream for shops
Ontario, Canada—The automotive industry experienced a 300-percent increase in software-related recalls in the past three years, representing 15 percent of OEM recalls in 2015, and with right to repair legislation leaning on the side of shop owners, software now represents a rapidly expanding segment of the aftermarket repair market.
That kind of shift is staggering, says Shawn Patterson, Blue Streak Electronics’ (BSE) vice president of sales and business development. Whether the aftermarket succeeds in shifting that business away from OE manufacturers depends largely on shops’ willingness to expand their offering.
“We find many shops either embrace the technology, in which case they’re doing very good business, or they are afraid of the technology, in which case they send that business back to dealership,” Patterson said. “I don’t know that they understand the size of the market they’re missing out on by avoiding dealing with these units and software-related issues.”
A single vehicle that once used just a handful of software-related functions may now have up to 100, he said.
“The result is this alarming increase in software-related issues inside of the vehicle,” he said.
Technical service bulletins (TSBs) also present revenue opportunities for jobs such as calibrations, said John Cabral, BSE’s vice president of engineering and production, as those are less likely to be covered by a warranty.
Programmable or pre-programmed engine and powertrain control modules present a plug-and-play maintenance and repair solution shops may offer drivers no longer under their manufacturer’s or dealer’s care plan.
“In 2011, these TSB software issues only related to three different components controlled by computers within the system,” Patterson said. “In 2015, that number went from three to 20 different systems in the vehicle that relate to software-related TSBs.”
Cabral added, “The reason this is happening is because of the proliferation of re-programmable units. Prior to 1996, there were no modules in that vehicle, including the engine control computers, that were programmable, so if there was a problem with the software, the fix would be to swap out the physical hardware.”
Cabral cited flash updates as to what triggered a transition in opportunities for aftermarket automotive software service as well as many shop’s tendency to defer that business to OEMs.
“We’re trying to make that technology accessible for end users, so on top of the diagnostic and flash-programming software that’s built, designed and offered by BSE, we also offer a quick-turnaround service by which we pre-calibrate the units before they go out the door,” Patterson said. “Shops that may not carry these units or might not have flash programming equipment, those who don’t want to deal with this, or shops that don’t have Internet connection, which is required for flash programming, can still access that technology and provide it to customers.”
BSE is the only remanufacturer that distributes an in-house developed flash programming and full capability scan tool software, they said. BSE’s 2534 iflash VCI product was recently approved by Honda as one of the few providers of J2534 devices for Web diagnostic use. It is fully compliant with all Honda J2534-1 diagnostic protocols.
BSE has recenty released product-line enhancements in its ABS control modules, Diesel Injector Module and Body Control Module lines this year. The ABS line alone saw a 60-SKU expansion.
Patterson said Cummins and Duramax diesel options, specifically plug-and-play for Duramax, provide some of the best business as those vehicles stay on the road longer.
“The technology is new, which translates to a slow adoption rate in the aftermarket,” he said. “As the industry starts to embrace these technologies, these product lines become more accepted to take some business away from the OEM service business. Even in telematics, we want to keep that business in house and not send it back to the OEs, which is commonplace when it relates to complex electronics. We do that by merging the diagnostics and hardware remanufacturing, and as the price of scan tools comes down, it’s not two separate markets anymore. Devices and tools go hand in hand. We’re trying to find more interesting ways, creative ways to make this technology more accessible.”
Industry feedback drives innovation
Twenty percent of the company’s workforce is related to engineering, utilizing customer phone calls heavily for identifying market needs. Its R&R program (return and rebuild) brings in a great deal of product information.
“We rely on no third parties for any piece of our operation, anywhere,” Patterson said. “We’re heavily invested in engineering. We figure out the failure modes, put it through production and development, and then make it available.”
Often, Cabral said, the replacement or repair provided improves on the original product by, for example, troubleshooting redundant circuitry to prevent future failure in ABS modules.
“These are the original OE parts back into the car, to like-new or better in many cases,” Patterson said. “Some cost 20-30 percent less than what OEMs are charging for the same product.”