The automotive repair parts and services market is following the general trend of the economy in 2010 in that each major product and service category is showing modestly higher (3-5 percent) “take-rates” over 2009.
This trend was reflected in the high-volume categories such as oil change services, air filters, brake repairs, tire rotation and tire balancing. The battery category, however, continues to lag behind the industry. Between 2009 and 2010, those who purchased a battery as part of a recent maintenance or repair service, remained the same, just 2 percent.
Despite a general stabilization of the economy, vehicle owners continue to be cautious when spending on maintenance and repair services. Historically 20 to 30 percent of consumers would follow the recommendations of their service provider when a justifiable repair was pointed out.
Prior to 2007, consumers placed a high value on time and often chose to repair something at the time of identification to avoid spending the additional time that a comeback or inopportune part failure would cause.
In 2010, “cash is king” and only 15 percent of owners actively followed a technician’s recommendation. Consumers continue to ask technicians to prioritize repairs in an effort to stretch their maintenance dollars. Where batteries are concerned, that decision is coming back to haunt them. Of those who used their road-side assistance program in 2010, 35 percent were because of battery related issues, up 6 percent over 2009.
A battery failure can be a relatively simple diagnosis and an easy replacement. The industry has adapted to meet the “on-demand” nature of the product but in doing so, it is the industry structure which may be impeding its ability rebound in the same fashion as other high-demand components.
Because consumers know they can access batteries easily, they are holding out on replacement purchases until the last possible moment. Price and availability are key purchase criteria that are driving the industry. In North America, more than 50 percent of batteries sold are through the mass merchandiser/retailer channel where consumers, not technicians, are choosing the product.
For battery manufacturers, manufacturer share is tied to their distribution alliances with the retail channel. Because of the intense retail focus, brand is an important element in this category. With three manufacturers being responsible for more than 80 percent of automotive batteries, differentiation has become a challenge. Private labels rapidly evolved and are now challenging leading national brands for top share. With consumers so heavily focused on price, it will take major initiatives from the industry to change the focus of the category and boost revenues.
The automotive repair parts and services market is following the general trend of the economy in 2010 in that each major product and service category is showing modestly higher (3-5 percent) “take-rates” over 2009.
This trend was reflected in the high-volume categories such as oil change services, air filters, brake repairs, tire rotation and tire balancing. The battery category, however, continues to lag behind the industry. Between 2009 and 2010, those who purchased a battery as part of a recent maintenance or repair service, remained the same, just 2 percent.
Despite a general stabilization of the economy, vehicle owners continue to be cautious when spending on maintenance and repair services. Historically 20 to 30 percent of consumers would follow the recommendations of their service provider when a justifiable repair was pointed out.
Prior to 2007, consumers placed a high value on time and often chose to repair something at the time of identification to avoid spending the additional time that a comeback or inopportune part failure would cause.
In 2010, “cash is king” and only 15 percent of owners actively followed a technician’s recommendation. Consumers continue to ask technicians to prioritize repairs in an effort to stretch their maintenance dollars. Where batteries are concerned, that decision is coming back to haunt them. Of those who used their road-side assistance program in 2010, 35 percent were because of battery related issues, up 6 percent over 2009.
A battery failure can be a relatively simple diagnosis and an easy replacement. The industry has adapted to meet the “on-demand” nature of the product but in doing so, it is the industry structure which may be impeding its ability rebound in the same fashion as other high-demand components.
Because consumers know they can access batteries easily, they are holding out on replacement purchases until the last possible moment. Price and availability are key purchase criteria that are driving the industry. In North America, more than 50 percent of batteries sold are through the mass merchandiser/retailer channel where consumers, not technicians, are choosing the product.
For battery manufacturers, manufacturer share is tied to their distribution alliances with the retail channel. Because of the intense retail focus, brand is an important element in this category. With three manufacturers being responsible for more than 80 percent of automotive batteries, differentiation has become a challenge. Private labels rapidly evolved and are now challenging leading national brands for top share. With consumers so heavily focused on price, it will take major initiatives from the industry to change the focus of the category and boost revenues.
