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 82,500 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.
Competition from Dealers
Faced with declining new car sales, car dealerships are increasing their efforts to service and repair vehicles of all types.
Declining Collision Sector
Once a highly-profitable segment, the collision and body repair sector is in what some industry experts have termed “irrevocable decline.
Industry size & Structure
The average auto repair shop has about 4-5 employees and generates $709,000 in annual revenue.
- The automobile repair industry includes 78,600 firms that operate 82,500 shops, employ 345,600 workers and generate $55 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 12.1 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 Belron US, Meineke/Maaco, Midas, Monro, and Precision Tune Auto Care.
Industry Forecast
Auto Repair Shops Industry Growth
Recent Developments
Mar 6, 2023 - Auto Right to Repair Bill Re-Introduced
- A bipartisan automotive right-to-repair bill was re-introduced in Congress in February 2023, according to Auto Care. Reps. Neal Dunn (R-FL), Brendan Boyle (D-PA), Warren Davidson (R-OH), and Marie Gluesenkamp Perez (D-WA) proposed the “Right to Equitable and Professional Auto Industry Repair (REPAIR) Act.” (The bill had been introduced in the 2022 legislative session, but no action was taken.) The bill will preserve consumer access to high quality and affordable vehicle repair by ensuring access by consumers and repair shops to necessary repair tools and data. It would also establish a process for enforcement through the Federal Trade Commission for violations of requirements in the bill. According to Davidson, “By prohibiting vehicle owners from accessing and sharing data they generate, manufacturers stop consumers from accessing third-party repair shops. American vehicle owners have a right to control their data, and a right to access third-party repair shops, tools and parts.”
- Crash avoidance features are popular on new vehicles, but some owners report problems with the technology following repairs, according to a new survey in BodyShop Business. The Insurance Institute for Highway Safety surveyed drivers of vehicles equipped with front crash prevention, blind spot detection, or other visibility-enhancing cameras. About half of the owners who reported having one of those systems repaired said they had issues with the features following the repair. Two-thirds of owners with crash avoidance feature repairs involved windshield replacements, and nearly three-quarters of those whose repairs were due to crash damage had issues with technology after the repair. In comparison, fewer than half of owners who have repairs done for other reasons faced problems following repairs. Windshield repairs often require the calibration of crash avoidance sensors and cameras. About two-thirds of respondents who had repairs said calibration was included. The higher incidence of post-repair calibration issues suggests that repairers struggle with the calibration process. The article states, “Some calibrations are complicated and require large spaces, specialized training and expensive equipment. Calibration software is subject to frequent updates, making it difficult for shops to keep their tools up to date. This is further complicated by a lack of standardization of calibration processes. Institute researchers are tracking these problems to monitor whether they persist or diminish over time."
- Tesla is working on changing its vehicles to lower car repair costs, according to FenderBender. Tesla founder and CEO Elon Musk discussed during a recent earnings call that small changes in design and providing spare parts can have an “enormous effect on the repair cost” of Tesla vehicles. According to the report, online data from salvage auction houses Copart and IAA found that most of the 120 totaled Model Y Tesla cars had fewer than 10,000 miles. The online data does not reveal the damage details of the totaled cars, but insurance companies often total a car if the repairs are too expensive. Analysis by Reuters showed that one Model Y Tesla vehicle listed by the IAA in January 2023 had a retail price of about $61,000 but had incurred a front collision with repairs estimated at $50,000.
- Used car sales in the US are expected to fall 4.2% in December 2022 year over year, for an estimated total of 2.4 million used vehicles sold, according to Cox Automotive data reported in Dashboard by NIADA. For 2022, the total used sales was estimated at 36.2, a decrease from 2021's 40.6 million. Cox Automotive projects 35.6 million used car sales in 2023, with 18.9 million in retail sales. According to Charles Chesbrough, senior economist at Cox Automotive, "The used-vehicle market faces a challenging year ahead as demand weakens and supply of nearly new vehicles is particularly constrained. However, the slight sales decline Cox Automotive forecasts for 2023 will be far better than what we saw in 2022." Cox data showed the average listing price for used vehicles at the end of 2022 was $27,077, a $700 decline year over year.
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