I first read about Sparesbox last year after they had raised $3.5M of funding to help them create a network of mobile mechanics to visit car owners and perform on-site servicing. That funding by Moelis Australia Asset Management and Carthona Capital is equal to 10% of the business.
Sparesbox was created by Leon Saliba who is an ex Holden and Toyota equipment buyer. He was convinced that car owners were being forced to pay premium pricing for mechanic services and original parts through the manufacturers dealer networks. He has described Sparesbox as part of the emerging “do it for me” market and that he wants to dispel the myth that not buying from the dealer would invalidate the vehicle’s warranty. Saliba believes that the official dealers are the worst at providing incorrect information to the customers.
Sparesbox aims to source parts from the same suppliers and provide them to the customer at a greatly reduced price. The business has been modelled on a mix of Uber, AirTasker & eBay style functionality and processes in an on-line marketplace. They have a full range of suppliers – from the smallest specialist companies to the big ones like Castrol, Bendix, Phillips and TRW with discounts of up to 30% on the parts they supply. Part of that reduction is likely to come from having a smaller property footprint than their competitors and probably much lower overhead costs to absorb in each sale.
The company was founded in 2014 as a spares marketplace however last year they expanded into the mobile mechanic market too. This was to ensure that more people could benefit from their spare parts pricing. The new service was launched in Sydney and is expected to grow to other towns and cities in the near future. They recognized that their initial customers were car enthusiasts who worked on their own cars, however Sparesbox could see that independent mechanics are still a strong section of the automotive market and mobile services like the competing Lube Mobile are also still popular with customers who do not have the time to drop their vehicle off at a dealer and then pick it up later – adding to the overall cost of the servicing.
Sparesbox are clearly attacking the manufacturers and their networks with statements such as “Our philosophy is to be transparent with customers – fair costs, quality service and letting customers know what they’re paying for: it’s pretty simple but giving customers visibility isn’t common in auto” as stated on their About Us page. That’s fighting words!
I think the model will work – especially in the smaller towns around the country where there are fewer authorised dealer locations and where possibly there are more cars out of warranty. The dealer networks will certainly find ways to counter-attack this growing market by providing extra services (Ford have been advertising replacement cars to help with the logistics of the servicing) and they may well find a way to trim their pricing on parts and labour.
Really, it comes down to the relationship an owner has with a dealer and whether they trust the dealer to provide them with the right information. If an owner sees value in paying the dealer and getting their car serviced in an acceptable time, they will continue to do so. The other important fact to consider is that the dealer network has an incentive to look after their customer: they want to upgrade the owner to the latest model before the warranty expires!