SOUTHAMPTON, Pa. — More than half of independent auto repair shop owners are expected to retire in the next nine years, with a majority planning to sell their businesses, according to a survey conducted by Bolt On Technology, a digital tools and software provider for auto repair shops, and Professional Tools & Equipment News.
The survey results foreshadow a potential wave of consolidation in the industry, according to the survey sponsors.
The survey, administered by Paramount Research in June, asked 36,000 repair shops nationwide about business concerns, technician training, use of and investment in technology and other related topics.
The survey found that 30% of shop owners plan to retire within five years, while 22% plan to retire in six to nine years. Of those retiring, 52% said they plan to sell the business; 26% plan to pass the business on to a family member; and 17% expect to shutter their businesses.
"If shop owners' retirement plans bear out, there could be a profound impact on how the industry services and repairs cars at a time when car owners are holding onto their vehicles for longer periods of time," Bolt On Technology said.
The survey results also indicated that 68% of respondents have encountered negative opinions or mistrust of repair shops.
"Trust remains a significant impediment to building long-term relationship and by extension, repeat business and ultimately profits," said Mike Risich, founder and CEO of Bolt On Technology. "Better communication with customers is one of the top training concerns among shop owners, and half of them said they'd welcome training and technology solutions that addressed this issue."
The single biggest concern of shop owners surveyed was the challenge of attracting and retaining skilled technicians.
Nonetheless, more than half of shop owners said they plan to hire one or more employees over the next year. Seventy percent of those hiring said new technicians were their top priority.
"The culture has changed in recent decades, and at the same time, driven by technology, vehicles are getting ever more sophisticated," Mr. Risich said. "Shop owners need to understand that to attract the millennial generation, who were reared on technology, it is critical they adopt the latest technology solutions to run their business. The results of our survey clearly demonstrate, the old ways of doing business are past; those who maintain the status quo, who aren't using technology to optimize operations and maximize profits will be left in the dust."
Among the survey's other findings were:
- Nearly half of the auto shop owners were 60 years of age or older; 34% were between 50 and 59 years old.
- Forty percent of respondents have owned their repair shop for 30 years or more; another 26% have owned their shop between 20 and 29 years.
- Nearly half of the respondents said they are using incentives to recruit or retain technicians, including cash bonuses, weekends off, commissions and profit sharing.
- Most shops require formal training of their technicians, with 55% requiring recurrent training every one to three years. Ongoing certification is required every one to three years among 47% of shop owners.
- About 78% of respondents plan to invest in diagnostic tools and equipment and 71% said they would invest in training in the next 12 months.
- Almost half of the respondents predict 2019 sales will increase relative to 2018; 39% said they expect sales to remain unchanged; and 11% expected a decrease in sales.