Market forecasts are looking good for the American automotive repair industry.
According to the Automotive Aftermarket Industry Association, forecasts show a compounding 3.4% growth through 2017 — just 1.5% shy of the rest of the U.S. economy’s forecast growth. Although that seems low, it’s certainly growing for the long term.
While new car and truck sales are rebounding faster than expected, people are holding onto their vehicles longer than ever before: 11.4 years on average in 2014.
The market’s growth is being driven by three trends. Are you ready for them?
Trend 1: Changing Cars
Today’s vehicles are much more complicated.
They are a collection of interdependent systems within systems, connecting the body, the engine, the interior and the power train systems through more than 150 controllers and millions lines of code in an onboard computer that’s tracking sensor input, fuel mileage and even tire pressure.
And vehicles will only become more complicated, with new Internet-connectivity, backup camerasand onboard navigation systems, not to mention any new system consumers will want on future cars.
Trend 2: Changing Customers
An auto repair shop’s next customer may be a former do-it-yourselfer who’s finally stumped by increasingly complicated engine designs.
DIYers discovering this firsthand are turning into “do it for me” customers, trusting experts to do the job right (and fast) the first time. This includes baby boomers, the youngest of which are now 50 years old. Auto care has also turned into a more complicated affair, even for a generation that grew up working on cars. What about the new generation? Millennials (born after 1980) are about 86 million adults and statistically uninterested in car repair.
With DIY on the decline, a new wave of people is turning to the independent professionals they want to trust.
Trend 3: Changing Shops
Auto shop customers and their cars aren’t the only things changing. Since vehicles are getting more complex, the business cost involved in serving every single make and model is getting steeper every year.
It’s the rise of specialized auto repair: independent shops serving specific vehicle makes, or only German models, or hybrid vehicles, or any other segment to serve their specific community.
There’s still a lot of change, and time will tell which new, creative ideas will stick around. Between now and 2020, more customers will become more loyal to garages that serve their specific vehicle needs.
Change may be different, but it isn’t new. These trends could create lots of business for the garages ready for them.
In a changing market, quality partners make all the difference between just surviving and thriving.