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Repair Shop Advice

How Current US Automobile Trends Affect Independent Auto Repair Shops

November 29, 2017

For auto repair shops, most financial opportunity lies in out-of-warranty vehicles still on the roads.  That means that it’s important to consider what that mix of vehicles looks like (and what it’s going to look like in the coming years) when you’re making investments in your shop.  Here are two things that are changing – and two that aren’t – with current US automobile trends.

Changing: Increasing number of imports on the road

The percentage of imports on the road has reached 50% nationwide, and is moving towards 55% in the coming years.  Unfortunately, diagnostic scanners and software for foreign nameplates can be expensive, and there’s plenty of them out there.  As the market ownership continues to diversify, this could increase costs for repair shops trying to serve a large group of the auto-owning public.

Changing: Telematics pushing people to dealerships for repair

More and more vehicles have telematics systems, which “phone home” to the vehicle’s first dealership and tell them about any problems the vehicle may be having.  This means that the dealership’s service department gets to talk to the customer before anyone else, and potentially sell them on a repair before they even notice it’s needed.  Although lobbyists for independent repair shops are making progress on gaining the right to access this telematic information, it’s still going to lead to a shift toward dealer repairs for the newer, and higher-end, vehicles with these features.

Not Changing: Vehicles use gas

For all the publicity that Tesla is getting, gas is the way people are getting around in the US.  In fact, the percentage of hybrid cars being sold in the US has dropped from 3% to 2% since 2013, as oil became cheaper due to fracking.  Electric vehicles new sale volume has quadrupled over that time – from 0.1% to 0.4%.  And while manufacturers have promised dozens of electric vehicles over the next decade, time will tell if people actually buy them, or if they get manufactured at all.

Not Changing: People are keeping their cars for a long time

There really hasn’t been any killer feature that vehicles have gotten in the last few years that’s pushing old vehicles off the road.  In fact, the average age of a vehicle on the road is at its highest level ever, at over 11.5 years old.  Older vehicles aren’t in warranty and need maintenance to keep up and running, both of which represent a growing opportunity for repair shops.  They also don’t require new technology to service, and technicians don’t have to be trained on any new skillsets to service a vehicle that’s over a decade old, both of which lower costs.

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