WASHINGTON — Aftermarket automotive service providers are bouncing back from the depths of economic crisis caused by COVID-19.
Whether the rebound will continue really is anybody's guess.
As tens of millions of Americans hunkered down during the spring, trips to service shops fell drastically. People locked down hardly needed their cars, and economic worries pushed back preventive maintenance.
As the year has unfolded, the economy continues to re-emerge and people feel more comfortable — rightly or wrongly — about venturing away from home, the need for automobiles and, or course, repair services, has resumed.
"At first, the impact on the auto service sector was tough. We say through mid-May there was a significant drop in sales," Michael Chung, director of market intelligence for the Auto Care Association (ACA), said.
"As you can image, the companies were highly concerned about their cash positions," he said.
One of those companies that saw business dramatically fall and then rebound is Zimmerman's Automotive Tire Pros of Mechanicsburg, Pa.
As a second-generation owner of the company, Judy Zimmerman Walter has seen plenty of booms and busts since she began working in the company business in 1975.
This year, however, has been a whole other level.
"The most volatile time I've ever had," she said. "I have never seen anything like it. We've been through a lot of ups and downs with the family business. But nothing like this. It was completely out of our control."
Zimmerman's Automotive is a 12-bay operation that would see more than two dozen vehicles come in and out of the shop on a typical day.
"I was probably servicing four cars per day when I'm used to 30, just to give you an idea," Ms. Walter said.
But times have changed since mid-June as people became more and more comfortable venturing out of the house and even traveling. By car, that is.
To make employees and customers feel more at ease during the pandemic, Zimmerman's Automotive established a host of precautions, such as social distancing, plexiglass shields, online appointments and sanitization that all have become part of the new normal.
The company thought outside the box to drum up business, including reaching out to people.
"We called customers and talked to them. Sometimes they just needed to talk to a human being because they weren't seeing anybody every day," Mrs. Walter said. "You had to get creative. That was the only way you could keep people coming in," she said.
The business also used its electronic sign to let customers know the business was open and offered to pick up and drop off vehicles in need of service. Zimmerman's Automotive even provided masks for customers who did not have any earlier in the crisis.
"At first everyone stayed at home. They were scared to death, and after a while they started to come out again. I'm not going to say they came out fast," she said.
By mid-June, business was really starting to pick back up. The operation was booking customers two weeks out by early August because of demand.
That's now ideal, Mrs. Walter explained, as scheduling work too far in advance risks the possibility of the customer's simply finding another shop to handle their needs.
"We are so slammed," she said. "We are very busy. We are booked two weeks out. That shouldn't happen. If you book too far out, they are going to go away. They are going to go somewhere else."
"I don't expect that to continue constantly because next month is September, and September and February can be the worst months in service. It's hard to say what will happen," Mrs. Walter said.
The ACA's Mr. Chung said the summer travel season has helped not just Zimmerman's Automotive, but also other shops rebound from a difficult spring.
"We've heard some similar sentiments and practices from other shops in some of our communities regarding the increased demand as summer travel hit. What we also heard, looking forward, is all these uncertainties when summer is done, what's going to happen? Are people going to be able to go back to work? Are people going to be able to go back to school?
"Those are some of the big uncertainties that's on a lot of members' minds. What does the future hold?" he asked.
Ms. Walter indicated that the crisis created by COVID-19 has reinforced to her the importance of creating relationships and not just transactions in her business.
"One of my personal pushes is relationship. Automotive service has to be a relationship business and it worked loud and clear. That's what I found, too, people coming out of this are counting on the relationships more than ever," she said.
Being there for customers during a time of crisis allows service shops to create more meaningful relationships beyond just the price of service compared to a competitor.
Instead of focusing on being the lowest cost provider, businesses can assure customers. "We're here to make sure your car has what it needs for the long haul," Mr. Chung said.
At the Tire Industry Association (TIA), CEO Roy Littlefield III said the difficult times earlier this year have given way to more business during the summer for service shops.
"Everybody was home and people didn't want to spend any money. So it was very slow in the bays and a lot of guys were holding on," he said. "The comments I get now are that the bays are pretty full. People are back out driving. People are getting their cars serviced. It came back somewhat to normal," he said.
Commercial business, all along, has been different than the retail side of the business, he said, because trucks continued to move throughout the pandemic as residents hunkered down.
When Mr. Littlefield started in the tire industry some 40 years ago, tire shops were tire shops and automotive service shops did their own thing. That's changed drastically over time to the point where the vast majority of tire retailers also now perform other automotive services, and traditional auto service providers are selling tires.
That change came about as gas stations moved away from providing those services to instead embrace the convenience store concept. That transition from brake jobs to beverages opened an opportunity for tire retailers to step in.
Mr. Littlefield was asked if life has returned to normal in the automotive service business these days.
"I think that depends on what normal means. But I think the bays are steady now. For most dealers, you are always going to find exceptions on both ends of the spectrum. I don't think it was what it was before, but I think it's steady," he said.
"There's some pent-up demand. I do not believe we are back to what we were. But I believe it's steady," he said.
"It's one of those things that you are going to find an example of every scenario out there. There are some dealers who have done incredibly well. There are some dealers who have struggled and wouldn't have made it without the loans," he said.
Zimmerman's Automotive is one of the many businesses in the tire and automobile service sectors that has relied on loans through the Paycheck Protection Program to help keep the doors open.
PPP, as part of the broad-based federal stimulus package known as the CARES act, provided forgivable loans to small businesses to help them meet expenses during the pandemic. The idea was to provide money for companies to help pay their employees and meet other expenses when business cratered.
Those businesses can see their loans forgiven if they spend the money according to program regulations.
CARES, or Coronavirus Aid, Relief, and Economic Security, also provided stimulus payments of $1,200 to most adults earlier this year as well as $500 for certain dependents.
Aaron Lowe, senior vice president of government and regulatory affairs for the ACA, said: "One of the most important lessons that everyone should take away from the beginning days of COVID-19 is the critical need for auto care companies to develop relationships with local, state and federal officials, educating them on a regular basis, rather than in the middle of the crisis.
"At the outset of the pandemic, persuading governments to acknowledge that repair shops and their supply chain should stay open was not an easy task. Members of the auto care industry and their associations were forced to undertake a full court press.
"The effort that was necessary to accomplish the task demonstrates why it is important for the industry to become more directly involved in the legislative and political process," he said
The ACA has an ongoing online survey of members designed to gauge the impact of COVID-19.
Over a third (36%) of respondents said they were highly concerned about their cash positions in April, but that number had fallen to 14% in May. The figure was at 17% from July 1 to Aug. 1, so Mr. Chung said the view has been fairly stable since May.