Previous Issues | Current Headlines | Point of View | Obituaries


Point Of View: Efficiency Is Critical In The Current DIFM Market

According to the Jan. 12 issue of the Lang Aftermarket iReport, there is an interesting paradox forming in our industry, particularly on the service side. The opposing data from our friend James Lang of Lang Marketing will seemingly have a real impact on the do-it-for-me business moving forward.

“There were approximately 11,000 fewer service stations and garages repairing cars and light trucks during 2015 than 10 years earlier,” the Lang iReport stated.

That factor alone is worth serious consideration, but there is more.

“There were 3,900 fewer [vehicle] dealers in the U.S. at mid-year 2015 than 10 years earlier — an 18-percent population plunge,” the iReport stated. “The diminishing number of dealers drove down their DIFM product share, as dealer DIFM product bay sales fell nearly $525 million at user-price between 2005 and 2015.”

Lang noted that this may be mitigated by an increase in repair specialist outlets, outlets focusing on a limited menu of car and light-truck services. The report stated that repair specialists “increased their market presence by 2,600 outlets between 2005 and 2015.” He went on to note that, during 2015, repair specialists replaced vehicle dealers as the second-largest group of DIFM repair outlets across the United States.

At the same time, foreign specialists also climbed in number between 2005 and 2015, adding about 2,200 outlets to the service mix. Tire stores, too, achieved what was categorized as “a moderate gain” during the same period, helping to propel a $1.80-billion increase in their service market product volume.

“The residual category of service outlets recorded a loss in repair facilities, declining nearly 2,500 between 2005 and 2015 across the U.S.,” Lang added.

These changes regarding the number and types of service outlets add significant pressure to make sure service bay productivity and efficiency is a fundamental part of the service outlets. But, the real significant pressure from these shifts in the number of outlets available in the service sector is multiplied by a significant increase in the car and light-truck population in the United States.

“The number of cars and light trucks in operation (VIO) increased 15 million over the past 10 years (2005 to 2015), (while) approximately 12,000 light-vehicle repair outlets disappeared across the U.S.,” the iReport noted. “With the number of vehicles in operation (VIO) climbing and DIFM aftermarket product share increasing, repair (DIFM) outlets face a growing challenge to keep pace with the expanding DIFM market. To meet these escalating demands, light-vehicle repair outlets must become more efficient and productive.”

There is always room in this industry for effective and efficient shops to succeed, with enough business available for the aftermarket players despite whatever strengths or efforts we may see from the dealer side. But the era when knowing just how to repair and service vehicles was enough has come and gone, and now shop owners must be effective business managers with strong support from their trading partners on the distribution side of the auto care industry.

These efficiencies will come from applied technology that allows shops to repair vehicles quickly and correctly the first time, as well as in running the business in such a way that limited financial resources are used effectively and efficiently as well. These factors, coupled with attracting and managing productive employees in the shop, will turn these challenges into opportunities.

Cashing in on opportunity has always been the underlying principal of entrepreneurialism, and the aftermarket has always been rewarding to those with a true entrepreneurial spirit.

_______

Gary A. Molinaro
Publisher

Back To Story List

DASH4 BANNER (2) 2015