19 Key Auto Repair Industry Trends

As long as automobiles are around, there will be an auto repair industry to support those vehicles. It may be a relatively new industry compared to some, but the importance of it cannot be understated. Without high quality mechanics, it would be difficult for the world to meet its transportation needs on a consistent basis.

Over the past 5 years, the auto repair industry has seen steady annualized growth of 1%. This has created a US industry with an estimated value of $58 billion, according to information provided by IBIS World.

As disposable incomes rise, more households look to own vehicles and begin to seek out expert repair help instead of trying to repair their vehicles on their own. Assuming income levels continue to rise, the chances for growth will continue to be good. If not, then the auto repair industry has a second option – earning online revenues by offering instructional videos to the DIY repair market.

The Auto Industry Will Keep Focusing on its Strengths

  • The location of industry establishments for the auto repair industry strongly correlate with regional population distribution, vehicle ownership, and per capita income levels. This means the US Southeast has the nation’s largest share of establishments at 22.5% of all industry locations.
  • According to the Automotive Aftermarket Industry Association, forecasts show a compounding 3.4% growth through 2017, which is just 1.5% shy of the rest of the U.S. economy’s forecast growth.
  • New car and truck sales are rebounding faster than expected, but people are also holding onto their vehicles for longer than before. The average age of vehicle in the US was 11.4 years, which is the oldest it has ever been.
  • The modern vehicle is also much more complicated than the older vehicles, which offers the auto repair industry two different markets which can be targeted. The first is the straightforward older vehicle, but the second is the new vehicle that offers a collection of interdependent systems within systems.
  • Complicated car designs are only going to continue becoming more commonplace, which will give more locations in the auto repair industry an opportunity to focus on specific service options. Look for shops to specialize in internet-connectivity, onboard navigation systems, car computer repair, and other technological advances that weren’t even thought of 25 years ago.
  • Changes to engine design will also help new customers start coming to the auto repair industry. Many of these customers would consider themselves to be DIY repair experts, but find themselves stopped by the changes in automobile and engine design that are occurring.
  • Millennials, defined by Interstate Batteries as being born after 1980, are about 86 million adults and statistically uninterested in car repair. Look for opportunities to continue reaching out to this generation to expand car repair and long-term ownership options.

There are really three types of customer that the auto repair industry can target to continue seeing slow and consistent growth. The first is the aging DIY specialist, who just wants someone to repair their vehicle correctly the first time around so they don’t have to do it any more. The second group are the younger vehicle owners who need transportation to work, but have zero desire in trying to figure out how to repair that vehicle should it break down. The third group is the customer who has consistently brought in a vehicle for repair when what happens to their vehicle is beyond their skill level. With each group having a specific marketable reason, it will be up to the industry to determine the preferences of their local customers and then to reach out to them in a meaningful way.

Auto Repair Shops and the Need for Specificity

  • As automobile ownership and repair becomes more complicated, watch for the auto industry to begin adapting to these issues by becoming more specified in the tasks they can complete. More shops will specialize in repair only specific models from certain countries, service specific vehicle makes, or may only take in hybrid vehicles. Specific segments will exist in every community and these will become niche business opportunities.
  • Brand loyalty will also become more important than ever before in the industry today. People will still be loyal to the national brands or the individual mechanics that do a good job, but there will be fewer instances of shopping around for a good deal. Customers will want a specific auto repair shop that can meet a specific vehicle need.
  • Auto repair shops will also begin specializing in the new technologies that are being incorporated into vehicles. Big data will be especially important and it just won’t be in vehicle maintenance and repair. Half of all vehicle owners use digital devices to dictate their automobile insurance rates and other products and services.
  • The average vehicle today operates on more than 100 million lines of code. That’s even more than a 787 from Boeing, which means there will be a need to service this data and code should it begin to malfunction in some way.
  • By being able to provide a specific service instead of being forced into offering generalized services, the overall impression left by the industry may begin to change. An AudaExplore study reported by Property Casualty 360 states that 48% of consumers believe that repair shops sometimes, rarely, or never provide “great” customer service.
  • By being transparent about the world that is being done, 3 out of 4 consumers say that they would be more willing to approach the auto repair industry when their vehicle breaks down. Communication is another factor. 62% of consumers say that receiving real-time updates about their vehicle would make them feel more confident about the industry as a whole.

Just as with every industry, there are a few bad eggs that own auto repair shops. They’ll charge customers 3x what a part should be, have ridiculous labor rates, try to convince customers that there is something on a vehicle that needs to be repaired when it doesn’t need to be… and worse. Most auto repair shops don’t do this, but the few that do create a negative reputation for the industry. This is why embracing an individualized approach to the repair process could change everything. With transparency comes specificity, which opens up communication lines to each consumer. Although it may take some time to adjust to the technology changes in vehicles and in communication, it will ultimately be a change that can bring about consistent growth for the industry.

How the Auto Repair Industry Can Upgrade Itself

  • Outdated technologies or faulty equipment can lead to repairs that cost up to 30% more than they should. Look for established industry professionals to take advantage of upgrade offers which will allow them to meet the needs of new customers, still allow them to repair older vehicles, and avoid angry reviews that appear on Google or Yelp.
  • Estimate enhancements will also become more important as the automobile industry continues to evolve and become more complicated. Watch for the auto repair industry to invest in apps, SaaS options, and real-time reporting opportunities to create accurate estimates the consumer can watch from anywhere there is an internet connection.
  • By offering modern equipment, accurate estimates, and real-time reporting, a fourth benefit will be obtained in the coming years by the industry: accountability. When there are open lines of communication, only 10% of consumers report that their vehicle was not repaired on time or as expected. Without open lines of communication, that percentage jumps to 51%.
  • There is also the issue of the “always on” culture that the industry will need to embrace in some way. It might be through webcams that allow a client to watch their vehicle being repaired. It could be detailed information about the repair for the client to access. Whatever the case may be, those in the industry who are willing to embrace these needs in the next 5-10 years will likely see the most success.
  • These upgrades will be needed because as consumers become more comfortable financially, an increasing number of car owners are expected to scrap older vehicles in need of expensive repairs and instead opt to buy new replacement vehicles – which will need new repair techniques.

In times of transition, there will always be some shops in any industry that are unable to survive. Less than half [48%] of the auto repair shops in the US say that they have the most current repair technologies that are available to them. 31% of shops say they don’t have the newest products that are available, but believe they are current on repair technologies. This means 1 in 5 shops in the industry is not current and could find themselves out of business in the near future. For the growth prospects to be fully realized, it is these older, out-dated shops that need to be brought up to date for the industry to be successful. If not, it could be a tough few transitional years for some shop owners.


Auto Repair Facts

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