Trends in the Auto Repair Industry #4: Independent Auto Shops vs. Dealerships
Cars now are more complicated than ever before. They are rapidly growing and becoming more advanced than never before. The car industry, and dealerships/autoshops in particular, are now heavily relying on the internet. The internet is full of information at your fingertips; here is how to use it for your auto shop’s benefit.
Independent Auto Shops vs. Dealerships
Another way that the auto repair industry is being affected by the internet is with DIY (do-it-yourself) vs. DIFM (do-it-for-me). With an infinite amount of information on the internet, many drivers look towards the internet for advice and tutorials on quick fixes for their vehicles. That being said, in a report by the AutoCare Association, 80 percent of drivers choose DIFM. Of those DIFM drivers, 70 percent choose to go to independent auto shops and the other 30 percent choose to go to the car dealer for repairs. That’s a pretty good outlook, right?
According to Consumer Reports’ 2016 Annual Auto Survey, people feel more comfortable going to independent auto repair shops than they do dealerships. The report lists that shops outscored dealerships for “overall satisfaction, price, quality, courteousness of the staff and work being completed when promised.”1
For independent auto repair shops, these statistics give a great outlook for where consumers are choosing to have their repairs completed. With continued hard work and effort being put forth by independent shops, people will continue to visit the local auto repair shop that they trust. Customer loyalty is one of the main advantages that independent shops have over big dealerships, so it is important to place a focus on this.
Life of a Vehicle
One of the major factors that is making a shift in the auto repair industry is the average length of vehicle ownership. In the last ten years, the average length of vehicle ownership for new and used vehicles has increased 60 percent. This is largely due to quality maintenance of parts.2
By 2020, vehicles 12 years and older will increase 15 percent. Currently, there are 57 million vehicles that are 16 years and older. As cars grow older, the need for repairs becomes more common. With the steady increase of older cars on the roadway, this gives a good outlook for the auto repair industry.
The Marketplace is Changing
Similar to other industries, the aftermarket auto repair industry is making a shift to the internet. Car parts are now being sold online and maintenance services are also being offered on the web. This is due to the fact that people no longer want fast service, they expect fast service.
As previously discussed, we are constantly moving our lives onto the internet. This concept has even changed the way auto repair parts are being sold today. According to the AutoCare Association, e-tailing, or parts sold via publicly accessible websites to DIYers and service professionals, is experiencing an annual growth of 17 percent.3
Earlier this year, Amazon signed a deal with several large auto suppliers in the United States to sell their products directly through Amazon, creating a great amount of competition for aftermarket auto part retailers. In 2016, e-commerce auto sales reached $7.4 billion, with Amazon and eBay holding the top spots for online auto part sales.4
An interesting point to consider is if people are starting to buy parts online, will there be a day in the future when people will buy cars online? This may be a bigger idea that Amazon is exploring and researching as part of its auto parts sales venture.
But for where we are now with a rise in parts being sold online, it is important for your auto shop to have an inventory control system in place to inform customers if you have the specific auto part they are looking for. Chances are if they come to your shop and you don’t have the part, they may visit an e-commerce channel such as Amazon to order the product.
Cars now are more complicated than ever before. Costs for repairs and replacements on digital, hybrid and electric cars are currently higher than conventional cars. As these parts become more standard, prices will decrease, but there will be added competition from online car part sales. It is important that you take advantage of the current high prices by holding regular training updates for your employees. Your most valuable weapon will be your knowledge and your mechanics’ knowledge. This will establish your shop as the local leader in these types of repairs, and customers will come your way.
With the major shift to the internet, it is also important for your shop to consider how it is marketing to potential customers. It is no longer enough to only have one billboard in your local area – your auto shop needs to have an online presence.
The key to success is to capitalize on these trends and make sure that your shop is aware of changes in the industry. As long as you stay up-to-date on the latest in the auto repair industry, there is no reason for your auto repair shop to fear the future.
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