Running a Shop Sales+Marketing Customer Service Customer Relationship Management Tools and Equipment

An Ever-Changing Market

Order Reprints

According to Jim Lang, president of Lang Marketing, if you aren’t servicing foreign nameplates, you may have a problem on your hands. 

In August, Lang Marketing released a Lang Aftermarket iReport that showed bay growth is being stimulated because of foreign repair, linking the trend of service bays with the foreign nameplate aftermarket. In other words, foreign nameplates will dominate the industry. 

With foreign repair specialists adding more than 14,000 service bays over the past 10 years, according to the report, Lang predicts this service bay trend will continue. And, the marketing analysis company also predicts the light vehicle service bay population will decline by about 9,000 from now until 2023.

"Service bay population gains in the U.S. over the past ten years have been concentrated among independent repair outlets with high rates of foreign nameplate repair growth. Bay population losses have been suffered by independent repair outlet groups lagging in foreign nameplate repair,” Lang says.

But what does this all mean, exactly? Ratchet+Wrench spoke with Lang about the report findings, what it means for auto repair shops, and how shop owners can take action.

What are the biggest takeaways from this report?

The biggest takeaway is that the market is changing in an irrefutable matter and the operation mix is changing. By 2020, a majority of vehicles will be foreign nameplates.

Foreign repair is the accelerator of bay growth in the aftermarket. In other words, total car and light truck bay count has declined, despite the fact that the number of cars and light trucks in the U.S. has increased and the volume of DIFM (do-it-for-me), or service market repair, has increased. Basically, all of the growth in the car and light truck aftermarket is located in one sector and that is the DIFM foreign nameplates sector. 

What does this mean for independent auto repair shops in the U.S.?

Repair for domestic vehicles is actually declining and DIFM repair is declining in share of aftermarket volume, so all of the growth for the foreseeable future will be generated by foreign nameplates, simply because of their dominant position in the vehicle registration in the U.S. and domination of the repair-age sweet spot, which is 10 years old.

Independent repair shops have two competitors: dealerships and franchises. Dealerships are number one in today’s market and are now gaining market share. Dealerships have extended hours of operation, so dealers are becoming more competitive with auto repair shops, although that’s not the case with the price and the relationship with the customer.

For franchises, their advertising appeals to customers and they have a huge name recognition, have better warranties and a wide variety of products offered that it can be difficult for independent auto repair shops to match. The main advantage independents have is their relationship with customers.

How should shop owners take action to prevent the decline of bays from happening in their shop?

First off, you have to know your local market. If you are located in southern California, your customer base in terms of nameplates is going to be different than if you were in St. Paul, Minn., for example. You’re going to have a much higher concentration of foreign nameplates, sedans as opposed to pickups, different income groups, and different demographics. Knowing your local marketplace, you have to develop a position in that marketplace. 

Are you going to be the outlet to which millennials come? You have to know what millennials want, and how they perceive vehicle repair. Most millennials that come into your shop have already gone on the internet and have researched what might be wrong, the parts needed and will come in with a preconceived notion. Baby boomers are different; they tend to put their faith in the repair shop operators rather than the internet—you have to be sensitive to the different buying needs and the different perceptions of the marketplace with millennials vs. baby boomers.

Shops also have to determine what kind of equipment they need to invest in, especially if they are trying to get into foreign nameplates and electric vehicles (EVs). Most electric vehicles are concentrated in very few metropolitan areas. If you are in southern California, you better be aware of these vehicles, whereas St. Paul, not so much. 

Again, this is why you have to know your local market, and then apply the statistics available as to how you can best address that marketplace. If you’re not getting more millennial customers, you are going to have a problem. If you’re not selling foreign nameplates, you have a problem already.

Related Articles

The Nature of Change

Creating an Online Payment Portal for Customers

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