Time for Change
Hopefully, you’ve followed the news on this, as I’m not going to call out specific companies and organizations, or deals. But there’s a large shift that has taken place in the automotive aftermarket in recent years, one that appears to be picking up steam month by month: The emergence of private equity, and the gradual consolidation of organizations on both the vendor and shop sides of the industry. If it’s not daily announcements about a sale or acquisition, then it’s at least weekly.
And it doesn’t appear to be slowing down any time soon.
Now, I had a recent conversation with someone I’ll simply refer to as an “industry leader,” who is very much in the middle of this industry transition. She comes from the shop side of things and has a proven track record of knowing where the industry is heading next. Her message was fairly clear:
The next five to eight years will wind up being the most critical in determining the future of the automotive aftermarket—and the long-term success of the independent shop.
If you look at the trends, this feels like anything but hyperbole. As the industry continues through its current technological revolution, the day-to-day work of the automotive professional will continue to shift.
Are you ready for that?
Back in July, we released our 2021 Ratchet+Wrench Industry Survey, which dives into a statistical analysis of the independent shop operator, detailing performance metrics, demographic details, and unique insights on topics ranging from leadership styles to technology investments. Here are a couple jarring stats for you: Only 14 percent of those surveyed said they were equipped to do ADAS work; only 8 percent see ADAS work as a future profit center.
According to Auto Care Association data, the average light vehicle on the road today is 12.8 years old, so, sure, most folks aren’t seeing a whole lot of ADAS work coming in the doors today. But this is where that prediction from our industry expert comes back in. What types of vehicles will you work in five to eight years from now? Again, are you ready for that?
Another stat from our survey: Fifty-seven percent of those surveyed said that “a shortage of qualified technicians” is the top challenge facing the industry today. Compare that to the rising cost of doing business (12 percent), availability of repair information (10 percent), advanced vehicle design (6 percent) and technology and tool needs (4 percent), and our industry leader friend says you get a pretty clear picture of where everyone’s focus is: the day-to-day operations right in front of them. The worry, she says, is that not enough folks are thinking about the long-term viability of their businesses.
The good news, though, is that you have time to change that. This isn’t a “boom-or-bust” scenario; it’s time to evolve, she says. At Ratchet+Wrench, we’re committing ourselves to helping you do this. It’s why we try to present this information in the pages of our magazine, on our website, and even at our management conference each September. It’s the entire reason we, as 10 Missions Media, launched the ADAPT: Automotive Technology Summit. So, instead of wondering if you're ready for this shift today, the real question is what can we do over the next five years to ensure that we are ready? Let’s work through it together.