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
Source: Vertical IQ and Inforum
Recent Developments
Dec 13, 2024 - Upcoming Tariffs Cause Concern for Auto Parts Industry
- In December 2024, the Auto Care Association (ACA) released a report saying that tariffs proposed by president-elect Donald Trump could lead to strain for the auto parts industry and increased prices for US consumers and businesses. Trump has discussed plans to impose a 25% tariff on imports from Mexico and Canada and an additional 10% tariff on imports from China. According to the ACA, Mexico and Canada combined accounted for 58% of auto parts imports and 76% of auto parts exports in 2023. Top auto products imported from Mexico to the US include ignition wire sets, seat parts, brake systems and components, gearboxes, catalytic converters, suspension shock absorbers and parts, spark-ignition reciprocating piston engines, and automotive air conditioning parts. Top parts imported from Canada to the US include certain spark-ignition reciprocating piston engines, gearbox parts, suspension system parts, and clutch parts. The ACA report noted that a potential 25% to 100% cost increase for replacement automotive parts would likely further drive up the costs of vehicle maintenance and repair and could result in even more vehicles in operation on American roadways that are past due for service and in need of repair. Per the report, “With the sting of inflation still being felt by many Americans, the Auto Care Association supports the incoming Trump administration’s goal of achieving fair trade and we strongly encourage the incoming Trump administration to pursue trade measures that will help to lower everyday costs for Americans.”
- Car repair costs grew nearly 30% in the past three years due to inflation and new technology in newer vehicles, according to a recent report in the Wall Street Journal. Specifically, the complexity of sensors and computers in newer vehicles requires additional costs and labor to fix. The average repair cost for an insurance claim in the second quarter of 2024 was $4,721, about $800 higher than three years ago. The report noted that replacing a side-view mirror on a 2020 car can range from $1,200 to $1,500 due to the addition of sensors for lane-change assistance and a heating component, compared to a $200 to $400 cost for a 2013 car. According to experts in the report, a typical car had about 10 to 30 onboard computer modules a decade ago, compared to 75 or more today. Tech-aided safety features such as blind-spot monitoring and automatic emergency braking have reduced minor and major collisions and raised the cost of repairs with the recalibration of the advanced driver assistance system (ADAS) required after some accidents. About 26% of repairs associated with insurance claims have included recalibrating sensors, up 5% in 2024 compared to 20202, per the report.
- Consumer confidence levels increased in November 2024, improving by 2.1 points from the previous month, according to The Conference Board. The Consumer Confidence Index was 111.7 in November 2024 from 109.6 in October 2024. Dana Peterson, chief economist at The Conference Board, noted that those remaining most confident on a six-month moving average basis confidence were those aged under 35 and those in the income category of over $100,000. Per Peterson, “Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years.” Purchasing plans for homes stalled and new cars rose slightly in November 2024 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.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.