Jun 21

Trends in the Auto Repair Industry: Part 1 - They Don't Make Horses Like They Used To

Posted by Katherine Darsie on Jun 21, 2017 11:00:00 AM

Auto Repair Trends_1 (1).jpgWhere do you start a report about the state of auto repair marketing today? It makes sense that we should first explore how we got here in the first place – so bear with us as we recap a brief history of the auto repair industry (and if you’re interested in a more-extensive overview of the history of auto repair in the U.S., you may want to check out our separate report, The History of Auto Repair in America). 

Since there have been cars, there have been mechanics. If you want to get technical about it, mechanics have been around longer than the first automobiles started showing up in the 1800s. The first auto mechanics were plumbers, blacksmiths and bicycle mechanics who could easily transfer their skills to fixing cars. By the early 1900s, organizations like the YMCA had created designated auto repair schools to train interested students. 

As cars became more and more popular, the auto repair industry became more standardized. In 1925, the National Automotive Parts Association (NAPA) was founded to bridge the gap between consumers and mechanics. The first NAPA Auto Parts store opened in 1936. Today, it is hard to drive more than a few miles without passing an auto parts or auto repair store.

For many years, consumers were able to find and choose an auto repair store simply through word-of-mouth or by looking one up in the Yellow Pages. In today’s world, the rise of digital technology has drastically changed the industry. Cars are now more complicated, and people increasingly turn to the internet to find new auto repair shops. This report examines these changes and gives you insight into how you can adapt your shop to use these changes to your best advantage.

 

Am I Driving a Car or a Computer?

 

Think about everything that has started to become standard in new cars over the past few years - touchscreens, sensors, rearview cameras and navigation systems. At this point, it feels like dealerships are churning out “smartphones on wheels.”1 But all of these fancy digital add-ons tend to need to be replaced rather than repaired, meaning higher ticket costs.2

At the same time, cars today are starting to offer built-in diagnostic capabilities that will alert drivers of trouble with the vehicle. This feature is convenient for car owners as well as auto mechanics because the diagnostic capabilities can help auto repair shops quickly and accurately address the exact issue with no questions asked. According to a AAA survey, the majority of U.S. drivers want the ability to direct their vehicle’s data to the repair shop of their choice.3

The built-in diagnostics, or telematics, allows for long-distance transmission of computerized information. By 2020, it is predicted that 80-90 percent of all new vehicles will have embedded telematics.4 One issue that this brings up for the auto repair industry is the need for independent shops to educate their mechanics on this new technology. Many consumers make the assumption that small auto shops most likely don’t have telematics expertise, so they may be tempted to look elsewhere for their car repair. For this reason it is important that you market your shop’s expertise to potential customers and position yourself as the expert.

 


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Hybrids

 

When discussing trends in the auto repair industry, it is important to take a look at different types of vehicles that are being sold today - one of those being hybrid electric vehicles. There are two types of electric vehicles (EVs): 1) battery electric vehicles (BEVs) and; 2) plug-in hybrid electric vehicles (PHEVs).

Around 118,773 EVs were sold in the United States in 2014, and it looked like that would continue to increase.5 But there was a 9.4 percent decrease in sales during January-August 2015 as compared to the same eight-month period in 2014.6  A recent study by Bloomberg New Energy Finance, however, suggests that reductions in battery prices and increases in oil prices could lead to EV sales making up 35 percent of all new light-duty vehicle sales by 2040.7

Though it may take a while to get there, one thing is clear: electric vehicles are here to stay. And that means if your shop and technicians start learning how to best fix these cars now, you have potential to be the go-to shop in your community for these kind of repairs once they become more mainstream.

Partially due to a combination of low oil prices and a lack of public charging stations, hybrids are more popular in the U.S. than either BEVs or PHEVs. Unlike BEVs and PHEVs, conventional hybrids can’t be plugged in and charged. Instead, they use both an electric motor and an internal combustion engine. Because hybrids are new to the market, these parts (and others - like the transmission on a Toyota Prius) aren’t as widely available, meaning they are expensive to fix.

Today, you probably don’t see many hybrid and electric cars in your shop, but the ones you do see will likely be more expensive and drive up your ticket prices. In the future, as the parts for these vehicles become more common and less expensive, ticket prices will go down. If you’ve been doing these repairs all along, by this point people in your community will see you as the local expert for hybrid and electric car repairs. Either start training now for fewer tickets with higher ticket prices, or prepare for the future of more tickets with lower ticket prices.

 

Carbon Composite Materials

 

Another big trend in the auto industry is in the increased use of carbon composite materials. These materials - surprise, surprise - are mainly being used to increase fuel efficiency. Materials like fiberglass help to make cars lighter (increasing fuel efficiency) without sacrificing the strength that metal materials offer.8 U.S. production of these light vehicles is happening now more than ever - sales grew from 11.6 million in 2011 to 17.4 million in 2015.9

What is the issue with these materials? You guessed it - they are expensive! As cost decreases though, demand will increase and you will start to see more and more cars with carbon composite materials in your shop.

Currently, impact repairs on light vehicles have comparable costs to conventional cars because while the material is more expensive, the repair time is reduced. This will likely change, though, as the price of carbon composite materials decreases. If the price of impact repairs decreases in the future, this could spell bad news for collision shops.

As one can see, the car industry has gone through so may rapid changes. These changes have truly amped up the car from a method of transportation to a luxury item. Such changes have brought on the need for auto shops to educate their mechanics how to fix and support the new technology established in today's cars. Want to learn more? Stay tuned for more articles in our multi-part series, Trends in the Auto Shop Industry. 

Click here to read part 2, "How People are Riding in Cars Today."

 


http://www.economist.com/news/technology-quarterly/21615060-way-cars-are-made-bought-and-driven-changing-mobile-communications

http://auto.howstuffworks.com/under-the-hood/trends-innovations/future-car-repair.htm

http://newsroom.aaa.com/2016/12/u-s-drivers-leery-auto-repair-shops/

4 https://www.openbay.com/blog/challenges-trends-in-the-future-of-the-automotive-aftermarket/

5 http://www.fsec.ucf.edu/en/publications/pdf/FSEC-CR-1998-15.pdf

6 http://evtc.fsec.ucf.edu/publications/documents/EVTCPPPR4.pdf

7 http://about.bnef.com/press-releases/electric-vehicles-to-be-35-of-global-new-car-sales-by-2040/

8 http://mech.utah.edu/composites_cars/

9 http://compositesmanufacturingmagazine.com/2016/01/state-of-the-composites-industry-lucintel-2016/3/  


 

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Topics: Auto Repair, News and Trends

  

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