Report: Dealers have been recouping repair business

FORT WAYNE, Ind. — New car dealers lost business in "light vehicle purchased services" during the 2011-16 period to independent auto repair specialists, but dealers have been gaining business back more recently as the U.S. grew out of the Great Recession, according to new research from Lang Marketing.

Repair specialists — outlets focusing on a limited menu of light vehicle repairs — achieved greater than 6.5-percent annual growth during the five-year span in purchased services, which Lang defines as "labor charges for professional mechanics to install products and perform diagnostics."

• This story appeared in the June 5 print edition of Tire Business

Overall, the report said, light vehicle purchased services increased to nearly $72 billion in 2016 from $59.3 billion during 2011, and thus averaged faster annual growth than that for car and light truck do-it-for-me (DIFM) products — 3.9 percent vs. 2.8 percent.

Service stations/garages and foreign specialists (outlets focusing on foreign nameplate repairs) were the next best performers, Lang said, at 4.1 and 3.7 percent, respectively.

Car dealers averaged about 2.5-percent growth in such revenue between 2011-16. Tire retailers benefited as well, Lang Marketing said, ringing up more than 7 percent of the $12 billion gain in consumer purchased services over the period studied.

Auto parts stores with service bays suffered receding revenue from purchased service billing during the period, Lang said.

The Great Recession of 2008 hit car dealers hard, Lang Marketing said, as more than 3,100 dealer outlets closed, shuttering 59,000 service bays. As a result, car dealer service bay product sales declined more than $1.8 billion by 2010 before bottoming at just over $16 billion in 2012.

After that, however, car dealer service bays began rebuilding their car and light truck product volume, climbing to $16.5 billion in 2013, exceeding $17 billion in 2014 and eclipsing $20 billion last year, Lang estimated.

Lang Marketing issues a weekly report on the automotive service business in the U.S. To subscribe, go to: www.langireport.com.

Letter
to the
Editor

Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

SIGN UP FOR NEWSLETTERS