Table of Contents
Executive Summary
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- Overview
- The issues
- Auto service market is extremely fragmented
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- Figure 1: Service locations, November 2018
- Lower-income households less likely to perform routine services
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- Figure 2: Automotive services performed, by household income, November 2018
- Location and familiarity top consumer reasons for location choice
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- Figure 3: Location reasons, November 2018
- The opportunities
- Winning the trust of higher-income earners will provide dividends
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- Figure 4: Location reasons, by household income, November 2018
- Personal referrals are strong sources for independent smaller firms
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- Figure 5: Service discovery, by service location, November 2018
- Positive online reputation critical to winning younger car owners
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- Figure 6: Vehicle maintenance behavior, by age, November 2018
- What it means
The Market – What You Need to Know
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- Auto service industry should exceed $200bn by 2023
- Dealerships and garages are the primary repair spots for car owners
- ADAS may reduce collisions, but increase repair bills
- Low oil prices lower overall costs, let Americans drive more
- Increasing vehicle prices may lead consumers to keep their cars longer
Market Size and Forecast
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- Spending on automotive repair and services continue to increase
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- Figure 7: Total US sales and fan chart forecast of auto service, maintenance, and repair, at current prices, 2013-23
- Figure 8: Total US sales and forecast of auto service, maintenance, and repair, at current prices, 2018-21
Market Breakdown
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- Majority of service work takes place at repair shops or dealerships
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- Figure 9: Maintenance and repair service locations, Summer 2018
Market Perspective
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- Advanced driver assistance systems prevent accidents but increase repair costs
Market Factors
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- Lowering gas prices save Americans billions
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- Figure 10: US gasoline and diesel retail prices, January 2007-December 2018
- Increasing transaction prices and higher costs may delay next vehicle purchase
Key Players – What You Need to Know
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- Openbay triples number of employees with another round of financing
- New car sales dip points to lowering warranty work
- Caliber Collision and Abra Auto Body Repair merge into a 1,000+ chain
What’s Working?
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- Openbay gets further investment from Shell to expand
- The average franchise dealership is seeing steady growth on service
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- Figure 11: Average franchise dealership fixed-ops revenue, 2012-18
What’s Struggling?
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- Warranty as a percentage of sales declines for the first time since 2012
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- Figure 12: Warranty work as a percentage of total fixed-ops sales for franchise dealerships, 2012-18
What’s Next?
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- Caliber Collision and Abra Auto Body Repair merge
- On-demand automotive services could shake-up service industry
- Amazon partnering with local auto service stores
The Consumer – What You Need to Know
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- Nearly four in five car owners purchased non-oil change automotive service last year
- New car buyers likely to take their vehicle back to the dealership
- Engine troubles spur purchase consideration
- One in five car owners feel they’ve been taken advantage of
- Positive online reputation key for younger inexperienced car owners
Automotive Services Performed
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- Oil change and routine maintenance top services done
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- Figure 13: VIP Tires & Service direct mail, October 2018
- Figure 14: Nalley Hyundai direct mail, November 2018
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- Figure 15: Automotive services performed, November 2018
- Younger men a distinctive opportunity for vehicle modifications
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- Figure 16: Automotive services performed, by gender and age, November 2018
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- Figure 17: Automotive services performed, by age, November 2018
- Higher-income households more likely to pay for routine services
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- Figure 18: Automotive services performed, by household income, November 2018
- Transmission work increases purchase intent
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- Figure 19: Vehicle purchase intent, by automotive services performed, November 2018
Service Locations
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- Market extremely fragmented among local and national firms
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- Figure 20: Service locations, November 2018
- Service location dependent on consumer age and income levels
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- Figure 21: Service locations, by generation, November 2018
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- Figure 22: Service locations, by age and household income, November 2018
- Figure 23: Purchase type, by age and household income, November 2018
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- Figure 24: Service locations, by purchase type, November 2018
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- Figure 25: Munday Chevrolet service acquisition email, December 2018
- Costco over indexes among Asian car owners
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- Figure 26: Retailers shopped, by race and Hispanic origin, March 2017
- Figure 27: Service locations, by race and Hispanic origin, November 2018
Location Reasons
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- Location and familiarity top themes for consumer decision making
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- Figure 28: Location reasons, November 2018
- New owners go by trust, used owners go by cost – both want location
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- Figure 29: Location reasons, by purchase type, November 2018
- “I got a guy” – Independent repair shops win trust of their customers
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- Figure 30: Location reasons, by service locations, November 2018
- Retailers and auto service chains win on convenience and pricing
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- Figure 31: Location reasons, by service locations, November 2018
Service Discovery
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- Nearly a third of consumers take their car back to where they bought it
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- Figure 32: Service discovery, November 2018
- Repair shops and auto body shops add a personal touch
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- Figure 33: Service discovery, by service location, November 2018
- Discounts and online marketing key for retailers and auto service chains
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- Figure 34: Service discovery, by service location, November 2018
- Organic reach most effective in reaching service customers
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- Figure 35: TURF analysis – Service Discovery, November 2018
Vehicle Maintenance Behavior
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- Mechanic preference split on purchase type
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- Figure 36: Vehicle maintenance behavior, by purchase type, November 2018
- Opportunity to increase DIY work among younger women
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- Figure 37: Vehicle maintenance behavior, by gender and age, November 2018
- Positive online reputation needed for younger car owners
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- Figure 38: Vehicle maintenance behavior, by age, November 2018
- Figure 39: Service discovery, by age, November 2018
- One in five car owners feel they’ve been taken advantage of
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- Figure 40: Vehicle maintenance behavior, November 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
TURF Analysis
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- Methodology
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