Auto Service, Maintenance and Repair - US - December 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Auto service, maintenance and repair expenditures tops $172 billion in 2016
Figure 1: Total US retail sales and fan chart forecast of Auto Service, Maintenance and Repair, at current prices, 2011-21
Consumers are wary of shady service providers
Figure 2: Attitudes toward service providers, by age and area, August 2016
Consumers aren’t proactively scheduling service
Figure 3: Vehicle maintenance behavior, August 2016
Amenities nice to have but not necessary
Figure 4: Factors for choosing a service location, August 2016
The opportunities
Consumers want digital reminders for service and maintenance
Figure 5: Attitudes toward service providers, by age, August 2016
On-demand auto service and maintenance gains traction
Figure 6: Attitudes on service providers, by age, August 2016
Parents likely to use social media to find a mechanic
Figure 7: Attitudes toward service providers, by parental status, August 2016
What it means
THE MARKET - WHAT YOU NEED TO KNOW
Auto service, maintenance and repair spend expected to grow
DIY sector has limited impact on the market
Miles traveled exceed pre-Recession levels
Aging vehicles may create demand for auto service
MARKET SIZE AND FORECAST
Auto service, maintenance and repair in healthy state
Figure 8: Total US retail sales and fan chart forecast of Auto Service, Maintenance and Repair, at current prices, 2011-21
Figure 9: Total US retail sales and forecast of Auto Service, Maintenance and Repair, at current prices, 2011-21
MARKET PERSPECTIVE
DIY sector is minimal
MARKET FACTORS 
Miles driven will increase need for service
Figure 10: US miles traveled, Highway, 1990-2015
Average age of vehicles on the road remain high
Figure 11: Average age of passenger cars and light trucks, 2002-15
High consumer confidence allows consumers to make necessary repairs
Figure 12: Consumer Sentiment Index, January 2007- November 2016*
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Franchise dealer service centers win on trust
Independent repair shops successful at building personal relationships
Consumers less likely to opt for service at retailers with auto facilities
On-demand services the next generation of repair
WHAT’S WORKING?
Warranty work increasing along new car sales
Franchise dealer service centers winning on trust
Independent auto shops build personal relationships with their consumers
WHAT’S STRUGGLING?
Retailers not commonly visited for auto service
Figure 13: Auto service locations visited in last 12 months, Summer 2016
Consumers not proactive with maintenance
WHAT’S NEXT?
Openbay app to provide roadside assistance
Insurance companies align with third-party service advertisers
Figure 14: Allstate auto service consumer email, April 2016
Lincoln will provide complimentary on-demand pick up and drop off for service on all new 2017 models
THE CONSUMER – WHAT YOU NEED TO KNOW 
Consumers trust their service provider, but are wary of others
Quality of work is king
Parents much more likely to find value in social media recommendations
Independent repair shops more likely to have a personal relationship with their customers
VEHICLE MAINTENANCE HISTORY 
Majority of consumers have taken their vehicle in for auto service
VEHICLE TYPE
Consumers more likely to service a new vehicle over used
Figure 15: Serviced vehicle purchase type, August 2016
Black consumers more likely to have serviced a used or CPO vehicle
Figure 16: Serviced vehicle purchase type, by race and Hispanic origin, August 2016
Independent repair shop and third-party chain patrons more likely to have a used car
Figure 17: Serviced vehicle purchase type, by previous service location, August 2016
AUTO SERVICE LOCATION 
Nearly four in 10 vehicle owners chose a franchise dealer service center
Figure 18: Previous auto service location, August 2016
Lower income households select independent or chains for auto service
Figure 19: Previous auto service location, by household income, August 2016
Hispanics more likely to select retailers with auto services
Figure 20: Previous auto service location, by race and hispanic origin, August 2016
VEHICLE SERVICE AND MAINTENANCE TIMES
Weekdays are preferred for vehicle service
Figure 21: Vehicle service time preference, August 2016
Older consumers prefer to service their vehicles on weekdays
Figure 22: Vehicle service time preference, by age, August 2016
Suburban and rural residents more flexible with service times
Figure 23: Vehicle service time preference, by geographic area, August 2016
AUTO SERVICE AND MAINTENANCE BEHAVIOR
Many vehicle owners opt for one stop shops
Figure 24: Vehicle maintenance behavior, August 2016
Consumers take the check engine light seriously
Men more likely than women to shop around for alternative options
Figure 25: Vehicle maintenance behavior, by gender, August 2016
Figure 26: Pep Boys rewards card direct mail, October 2016
Franchise dealer service customer more likely to proactively schedule service
Figure 27: Vehicle maintenance behavior, by previous service location, August 2016
Independent repair shops create personal bonds with customers
Figure 28: Vehicle maintenance behavior, by previous service location, August 2016
FACTORS FOR CHOOSING A SERVICE LOCATION
Quality of work is most important for auto service
Figure 29: Factors for choosing a service provider, August 2016
Parents more likely to select loaner cars as important factor
Figure 30: Factors for choosing a service provider, by parental status, August 2016
Proactive tire maintenance leads to lower emphasis on cost
Figure 31: Factors for choosing a service provider, by tire maintenance behavior, August 2016
Retail customers place heavier emphasis on efficiency
Figure 32: Factors for choosing a service provider, by previous service location, August 2016
PREFERRED AMENITIES
WiFi, TVs can help pass the time when vehicles are serviced
Figure 33: Preferred amenities, August 2016
Women receptive to rides to and from local shopping centers
Figure 34: Preferred amenities, by gender, August 2016
WiFi a must add for younger consumers
Figure 35: Preferred amenities, by age, August 2016
Parents want something to entertain their kids
Figure 36: Preferred amenities, by parental status, August 2016
ATTITUDES TOWARD AUTO SERVICE AND MAINTENANCE
Transparency is critical in retaining customers
Figure 37: Attitudes toward service providers, August 2016
Men associate quality with franchise dealers
Figure 38: Attitudes toward service providers, by gender, August 2016
Younger adults want electronic service reminders
Figure 39: Attitudes toward service providers, by age, August 2016
Parents search for mechanics via social media
Figure 40: Attitudes toward service providers, by parental status, August 2016
Parents, urban residents, and social media users most likely to trust on-demand auto service
Figure 41: Attitudes toward service providers, parental status, urban residents, social media users for tires and service, August 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – MARKET 
Figure 42: Total US retail sales and fan chart forecast of Auto Service, Maintenance and Repair, at inflation adjusted prices, 2011-21