How Big is the Automotive Repair Market?
The automotive repair market has a huge opportunity for those who know how to tap into consumer demand. Delivering on consumers’ expectations while embracing technology shifts can help businesses gain competitive advantages.
But there are a few things to keep in mind when planning to open a car repair shop. First, labor shortages are driving up costs for auto repairs.
How Much Do Automobile Owners Spend on Repairs and Maintenance?
The automotive repair market is huge, with revenue generated by auto repairs businesses averaging approximately $65 billion in 2021. This statistic is a testament to the importance of maintenance for vehicles, as well as the need for skilled technicians to perform this work.
On average, American owners spend $397 each year on car repairs and maintenance. However, this amount can vary widely depending on the type of vehicle and the age of the car. For example, newer cars have more complex technology that requires specialized knowledge to repair or replace. Older cars, on the other hand, require more routine maintenance, such as oil changes and tire replacements.
Auto repair costs can also rise as a result of normal wear and tear, and more expensive parts and accessories. In addition, some repairs can be more difficult to predict and plan for, such as engine or transmission replacements. These types of repairs can significantly impact a driver’s budget, and can cause stress when they are not covered by an insurance policy.
In addition, many Americans are already struggling with record-high debt, and pricey repairs for vehicles they rely on can be especially burdensome. These factors can lead to reluctance by consumers to visit repair shops, which can further limit the growth of this industry. As such, it is critical for automotive repair companies to focus on consumer needs and provide exceptional service in order to remain competitive.
What’s the Opportunity for Auto Repair Shops?
The auto repair market is a huge one. It’s estimated to be worth $116 billion annually, with about 168,000 businesses operating in the country. The industry provides jobs for 690,000 people and pays an average annual wage of $44,050. General automotive repairs account for 85% of total industry revenue, while collision repairs make up the rest. Many auto shop repairs are independent and locally owned, with the top four companies accounting for less than 10% of the industry’s overall revenues.
The increasing average age of vehicles in the United States is expected to continue fueling demand for automotive repair and maintenance services. Additionally, a growing sense of sustainability and a focus on reducing waste are driving the demand for automotive repair services as well. This is creating a unique opportunity for automobile repair shops to increase their revenues by offering greener alternatives such as battery recycling and paint and plastic reuse programs.
Major players in the automotive repair market include Capistrano Transmission & Auto Repair, LKQ Corporation, LeasePlan Corporation N.V, ADNOC, Monro Muffler Brake, and Asbury Automotive Group Inc. In addition, smaller companies are thriving in the industry by strategically introducing their shops in convenient locations and prioritizing customer service. These strategies will continue to drive growth for the auto repair industry. However, the aging workforce and lack of new skilled technical workers will present challenges.
How Can Auto Repair Shops Make Money?
The auto repair industry is highly competitive. Competition includes not only independent shops, but also gas stations, car dealerships, and branches of mass merchandisers like Kmart and Sears. The key to surviving and succeeding in this market is by making smart business decisions. This starts with understanding and tracking the numbers that matter most.
In addition, the demand for auto repairs will likely increase due to advanced driver-assistance systems that are increasingly found in vehicles. These technologies often require the replacement of sensors, which can drive up repair costs.
Another way to boost profit is to optimize your shop’s capacity so that you can take on more jobs without losing money. To do this, you’ll need to track the capacity of each member of your team. Tekmetric makes this easy by providing a capacity dashboard that lets you know how much time each tech has left in their shift, along with how many hours they’ve already worked.
Traditionally, tracking these numbers requires keeping a sheet or logbook, which can be difficult and time-consuming. But with modern software that offers QuickBooks integration, you can eliminate a lot of manual labor and get access to more actionable information. Having this data will help you make better short-term and long-term decisions to improve your car auto repair shop profits. To learn more about the numbers that matter, check out this free guide: Four Numbers That Drive Profitability in Your Auto Repair Shop.
What’s the Competition Like?
The United States automotive repair and maintenance market continues to grow as people continue to invest in their vehicles. Advancements in technology and materials are boosting car reliability, meaning cars are staying on the road longer, fueling demand for repairs and maintenance. In addition, the popularity of online retailing has increased price transparency and made it easier for consumers to find the parts they need.
The COVID-19 pandemic negatively impacted the automotive repair and maintenance industry, but it’s also creating opportunities for garages and shops that embrace these emerging trends. Consumers are increasingly willing to pay for a better experience, especially when that experience can help them save time and money.
In addition, a growing sense of sustainability has driven the automotive repair and maintenance industry. For example, the recycling of old and damaged automobiles has become more common, helping to reduce the amount of waste that ends up in landfills and waterways around the world.
The automotive repair and maintenance market is a competitive one, with several major players operating globally. Some of the key companies in this space include Arnold Clark Automobile Ltd, Asbury Automotive Group Inc, Belron International Ltd, Driven Brands Inc, and Firestone Complete Autocare Center. In addition, smaller companies are competing effectively by strategically introducing their shops in convenient locations and prioritizing customer service.
The automotive repair market has a huge opportunity for those who know how to tap into consumer demand. Delivering on consumers’ expectations while embracing technology shifts can help businesses gain competitive advantages. But there are a few things to keep in mind when planning to open a car repair shop. First, labor shortages are driving…