Report: Independent Shops Have Outpaced Dealerships for Purchased Service

Order Reprints

Nov. 29, 2017—Service purchased for cars and light trucks at service stations increased $19 billion between 2006 and 2016, at a faster rate than the entire DIFM (Do It For Me) market, which includes dealerships, according to a report from Lang Marketing.

"While light vehicle purchased service increased at just over a 3 percent annual rate between 2006 and 2016, service stations and garages expanded their purchased service volume at a one-fifth faster annual pace."


Purchased Service

In 2016, Lang Marketing estimates auto repair operations rang up $18.6 billion in labor billings (as Lang refers to it: "purchased service").

Despite a nationwide decline in the service station population between 2006 and 2016, total sales expanded at a 3.7 percent average annual pace.


$5.6 Billion Gain

Up from $13 billion in 2006, service stations billed $15.2 billion in purchased service. By 2016, sales climbed another $3.4 billion, reaching $18.6 billion.


Growing Purchased Service Share

For the entire DIFM (Do It For Me) market (which includes dealerships), total light vehicle purchased service increased $19 billion between 2006 and 2016, climbing from just under $53 billion to nearly $72 billion, recording a 3.1 percent average annual gain.


Purchased Service Growth

Service stations, on the other hand, expanded their purchased service at a faster pace than the total DIFM market. Service stations added $5.6 billion in purchased service over this ten-year span, upping their total purchased service by nearly 45 percent between 2006 and 2016.

As a result, service stations increased purchased service at a faster yearly pace than total light vehicle purchased service growth between 2006 and 2016: 3.7 percent versus 3.1 percent.


Purchased Service Growth Faster Than Product Sales

Service stations expanded their light vehicle purchased service at a faster annual pace than that of their car and light truck product sales.

Service added $5.7 billion in car and light truck product volume at user-price between 2006 and 2016.

This 2.6 percent average annual product expansion by service stations was approximately one-third less than the 3.7 percent average annual purchased service growth achieved.


Purchased Service Growth as Share of SS & Garage Volume

Purchased service increased as a percentage of the total car and light truck repair volume billed by service stations.

Light vehicle purchased service accounted for 40 percent of total service station outlet 2006 volume. By 2016, purchased service generated 42 percent of annual service billings.

Over this ten-year span, purchased service generated nearly half of the total business growth by service stations.

Related Articles

Report: Saying ‘No’ to Customers is Costly for Service Shops

How Independent Shops Can Thrive in the Mobility as a Service Market

Volvo Promotes Dealerships for Service with Subscription Package

You must login or register in order to post a comment.