Parts and service for Toyotas, Hondas, Hyundai/Kias and Mazdas will grow nearly five times faster than for domestic brands over the next few years.
That is one the main conclusions of Frost & Sullivan’s latest analysis of U.S. repair shops and service bays. The research includes a breakdown of the number of service locations across the country, as well as analysis of vehicles in operation and survey results from a poll of 1,500 motorists about their maintenance habits.
It also highlights the emerging challenge of service bay capacity. The closure of more than 3,000 mostly General Motors and Chrysler dealerships from 2008-2010 shuttered at least 30,000 high-tech service bays across the country, while the total vehicle population grew by nearly 5 percent.
There were approximately 172,200 vehicle maintenance and repair centers in the United States last year, according to data from the Auto Care Association as well as Frost & Sullivan analysis. This includes an estimated 76,200 general repair garages, 17,500 automobile dealerships and almost 20,000 tire shops, among other outlets.
These facilities are equipped with approximately 1,175,000 service bays, providing maintenance and repairs for approximately 250 million passenger cars and light trucks in use across the country. Nearly 140 million of these vehicles are from the pre-2006 model year, reflecting the increasing average age of the U.S. fleet.
The number of general repair facilities, which includes thousands of small, family-owned businesses, will continue to decline by about 0.5 percent every year. Increasing costs for tools, training and equipment are making it too difficult for some to survive.
Tire stores, mass merchants and oil change shops are expanding to fill the void created by the closure of dealerships and general repair facilities. Based on current sales trends, they will service a vehicle population that features more Asian (CAGR 3.5 percent) and European (3.2 percent) nameplates than domestics, which are disappearing from the roads at a rate of 0.2 percent annually.
Meanwhile, automobile dealerships in the OES channel will add more aftermarket parts to their service departments to offer lower priced maintenance to owners of post-warranty vehicles. Some, such as Ford and Volkswagen, also will expand the number of quick-lube lanes at their dealer sites.
The good news for the repair industry as a whole is that many people plan to keep their vehicles a while longer. One in three vehicle owners in Frost & Sullivan’s latest survey said they would keep their primary vehicle for at least five more years.
And more expect to increase spending on parts and service in 2015 (26 percent) than to see their costs decrease (21 percent).
However, it will get increasingly competitive within aftermarket service channels, particularly for minor maintenance. Thanks to synthetic lubricants and premium filters, people seem to be changing their oil less frequently, so shops will have to work harder to maintain regular contact with their customers.
Overall, the outlook for the vehicle service and repair industry calls for steady growth. However, the opportunities are likely to be realized by large retail and franchised service chains that have access to the tools, training and equipment to maximize their service bay capacities.
Stephen Spivey is the Program Manager for Frost & Sullivan’s Automotive & Transportation Global Aftermarket research practice. He focuses on monitoring and analyzing emerging trends, technologies, and market behavior in the global automotive aftermarket. For more information on Frost & Sullivan’s Automotive & Transportation research, contact Clarissa Castaneda, Corporate Communications, at [email protected].
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