Auto Repair Shops
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 79,000 automobile repair shops in the US fix cars with mechanical problems or restore a vehicle after a collision. The automobile repair industry is highly fragmented. Most out-of-warranty vehicles are repaired at independent shops. A vast majority of independent service shops are family-owned.
Declining Collision Sector
Once a highly-profitable segment, the collision and body repair sector is in what some industry experts have termed “irrevocable decline.
Competition from Dealers
Car dealerships are increasing their efforts to service and repair vehicles of all types.
Industry size & Structure
The average auto repair shop has about 4-5 employees and generates $790,000 in annual revenue.
- The automobile repair industry includes 79,000 firms that operate 83,000 shops, employ 392,400 workers, and generate $62.6 billion in annual sales.
- The auto repair industry is separate from dealerships that provide repair services as well as the aftermarket industry, which manufactures and supplies components for vehicle repair.
- The automobile repair industry is highly fragmented. A vast majority of independent service shops are family-owned.
- The average car is 12.5 years old. A shift toward older vehicles tends to benefit the auto repair industry, as it indicates customers are more likely to take them to a mechanic for service.
- Many independent mechanics are closed on the weekends, hindering competition with car dealerships that operate on Saturdays. Mechanics work an average of 40 hours a week.
- The largest auto repair companies in the US are Meineke/Maaco, Midas, Monro, and Precision Tune Auto Care.
Industry Forecast
Auto Repair Shops Industry Growth
Recent Developments
Nov 17, 2024 - Labor Costs Higher, Employment Flat
- Wages were on the rise while employment remained mostly unchanged in September 2024, according to the Bureau of Labor Statistics (BLS). Employment by auto repair shops was flat in September 2024 compared to a year ago while average wages at auto repair shops grew 5.7% from a year ago. Wages reached $28.48 per hour in September 2024. Prices for motor vehicle maintenance and repair services were nearly 6% higher in October 2024 compared to the previous year and were up 1.1% compared to the previous month, according to Consumer Price Index data.
- Consumer confidence levels increased in October 2024, improving in all five components of the Consumer Confidence Index, according to The Conference Board. The index was 108.7 in October 2024 from 99.2 in September 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those between the ages of 35 to 54 and those in the income category of over $100,000. Per Peterson, “Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years.” Plans to purchase homes and new cars rose on a six-month average basis.
- The US auto repair shops industry is projected to grow at a CAGR of 4.6% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is comparable to the overall economy‘s anticipated growth. The report noted that consumer confidence is expected to improve in the forecast period, which bodes well for the various service industries. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. Price growth, however, is diminishing and likely to stabilize soon near intended rates. The report noted that auto supply challenges during and post pandemic have boosted consumer demand for the auto repair industry. “These constraints force many to maintain and repair vehicles and other equipment that otherwise might have been replaced,” per the report.
- Drivers drove 2.7 trillion miles in 2023, which is in line with recent years, with nearly 40% of driving trips made in vehicles older than 10 years, according to the recently released 2023 American Driving Survey from the AAA Foundation for Traffic Safety. The report stated that the share of older cars on the roads is a concern. “These vehicles often lack modern safety features and may be in poorer mechanical condition, potentially contributing to a higher risk of crashes,” it said. The number of driving trips taken per day averaged less than 2.5 per day with a duration of just over an hour and totaled 30 miles. Most driving trips taken in 2023 were to run errands (31%) and for work commutes (27%).
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