The Repair Boom
Editor’s Note: Interstate Batteries® originally published the following four-part series as a full-length article titled “At Today’s Shops, the Trend Is Up, Up… Up?” in the winter 2011 issue of CURRENT magazine. We’ve edited the 1,600-word piece into more manageable chunks to save trees if you print this out and to give you something to look forward to this weekend. You’re welcome. Here’s the third part.
The reasons behind the industry-wide increase in revenue boil down to two: nine years of high vehicle sales and a subsequent consumer shift from buying to holding and maintaining their cars.
According to Wards, auto sales plateaued from 1999 to 2007 at about 17 million, the highest ever in the history of the automobile. The sheer number of cars can seem staggering: 155 million.
The consumer shift happened with the recession. More of America’s drivers chose to repair rather than replace. According to analyses from automotive research firm Polk, owners are keeping their cars and trucks on the road for 10.6 years on average, up from 8.4 years in 1995.
America’s biggest years in car sales created a kind of “baby boomer effect,” said Tyler Reeves, Interstate Batteries Director of Marketing Research and Strategy. Reeves is referring to the Baby Boomer generation and how adding 76 million children between 1946 and 1964 strained institutions and raised consumption levels. Now the repair and battery markets are seeing this same phenomenon unfold.
Looking at sales numbers and industry statistics from Experian, a global consumer research firm, Interstate researchers have seen a consistent penetration into a third battery replacement. The sweet spot for Interstate Batteries was the first replacement and the second replacement, Reeves said, but since 2008, more cars and trucks are going to the junkyard with a fourth battery in them. All of this translates to good news for general repair shops.
Car manufacturers have done a good job making cars that can handle more mileage, said Ken Williams of Pacific Car Care in Portland, Ore. Spark plugs, once a replacement necessity every 30,000 miles, now last 100,000 miles and beyond.
“It’s not uncommon to see a car with 250,000 miles and it not need an overhaul,” said Mike Holmes of Holmes Auto Repair.
While outliving the traditional 100,000-mile marker, these cars are outrunning their warranties and heading to independent shops. Part of the new norm: Cars and trucks more than a decade old are getting much more maintenance and attention than originally expected. Business for Pacific Car Care has increased 18% from 2007, and Williams attributes it to more maintenance on the older cars coming into his shop.
Less than 1% of the cars going through his Fort Walton Beach shop are new models, the owner estimated. Instead, the new norm is routine maintenance on 11-year-old cars that drivers would have been tempted to replace just five years ago.
Steve Wright’s Arizona shop sees a lot of cars with high mileage, like a 2008 Toyota Camry with more than 80,000 miles. At least half of the cars going through Granite Reef Service Center have more than 100,000 miles on them. Outside of Detroit, about 12 cars a month from model years 2010 or 2011 come through Handlon’s shop. Instead, vehicles about 15 years old or older make up the majority he sees.
The majority of cars going through Pacific Car Care in Oregon are 5 to 18 years old, often over-mileage for their warranty. Williams said he often finds a service the customer hadn’t asked to fix: broken seatbelts, broken radio antennas and even missing license plates.
“That’s the increase sale. If shop owners say sales are down, they’re not looking,” Williams said. “There’s more unsold work on cars than sold work.”
- At Today’s Shops, the Trend is Up, Up… Up? (blogbattery.com)
- The $36 Billion Business (blogbattery.com)