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Auto service franchises report improved sales, margins in study

Wednesday, April 26, 2017 - 07:00
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Auto service franchises had a good year selling auto parts in 2016 and look forward to even a better year going forward, according to the Aftermarket Business World 2017 Auto Service Franchise study. The study surveyed franchise owners and managers about their parts-buying habits and their sales to customers.

Half of those responding to the study said their parts sales increased during the last 12 months compared to 46 percent who said their sales increased in last year’s study.

Some 58 percent said they expect their auto parts sales to increase during the next 12 months, compared to 48 percent who replied that they expected sales to increase in last year’s study. Only 4 percent said they expect their parts sales to decrease in the next 12 months compared to 8 percent who forecast a sales drop in last year’s study.

In addition to increased sales, respondents said their margins also improved. Some 59 percent responding to this year’s study said they had improved gross margins on auto parts sales during the last 12 months compared to 47 percent who said their margins improved in last year’s study. This year, 22 percent said their margins on parts sales improved 1 percent to 5 percent and 17 percent said their margins increased 6 percent to 10 percent.

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Respondents are equally optimistic about their gross margins in the next 12 months as 59 percent said they expect their margins to improve and only 3 percent said they expect their margins to drop.

When it comes to the needs of their customers, 34 percent of respondents said that part quality is the most important attribute and 28 percent said it was price.

Some 37 percent of auto service franchises responding to this year’s study said they prefer to buy auto parts form warehouse distributors, while 32 percent prefer to buy from auto parts retailers and 19 percent prefer to buy from jobbers. Click here to see the entire study.

Methodology: The Aftermarket Business World Auto Service Franchise study was fielded to readers of Motor Age magazine via email. Survey results are intended to show general market trends, not statistical certainties.

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