“Car and light truck DIFM product sales continue to increase in the U.S. despite the steady decline in service bay count. This counterintuitive development is primarily the result of growing car and light truck service bay productivity. Lang Marketing estimates the average car and light truck service bay increased its annual product and service volume more than one-third between 2004 and 2014, with even more service bay gains on the way.” – The Lang Aftermarket iReport (4/30/2015)
Mark Twain once said, “Facts are stubborn things, but statistics are pliable.” The fact of the matter, though, is that well-documented statistical information is the solid ground needed to build good strategies upon.
In this analysis from James Lang, publisher of the iReport and president of Lang Marketing – an independent consulting and marketing analysis company specializing in the vehicle products industry – Lang points out an interesting paradox facing today’s aftermarket service sector.
On one hand, the fleet of vehicles needing service continues to grow. According to Lang, the car and light truck population averaged 0.6 percent yearly growth between 2004 and 2014. At the same time, we see light vehicle bays closed at a 0.3 percent annual pace. And, although car and light truck DIFM product volume soared $17 billion at user-price between 2004 and 2014, the number of service bays across the country declined.
More vehicles with fewer service bays available would seem to indicate the possibility of a pending calamity, a challenge our industry would need to address. But the devil is in the details, and there is some good news nestled between these countervailing facts.
Despite the shrinking service bay population, Lang notes, car and light truck DIFM product and service volume (products installed by mechanics and billed labor) soared more than $31 billion at user-price between 2004 and 2014. The fact of the matter is that service bay count dropped by 36,000 between 2004 and 2014, yet, at the same time, bay productivity increased. Yes, that diminishing service bay population managed to keep pace with the booming DIFM market.
And, as Lang points out, car and light truck products installed per service bay, along with billed labor, climbed at an average 3.0 percent annual pace between 2004 and 2014 – nearly one-fifth stronger than the overall DIFM product and billed labor growth rate.
The fact of the matter is that service bay productivity has been positively impacted over the last decide by many positive factors. Repair and service information at the shop level is better than it ever has been, and some of that is because our industry fought for proper access to that type of repair information. On top of that, the impact of the Information Age has put that abundance of information at the fingertips of any technician, making the time in the bay dedicated to actual service and not just “testing” as well as trial and error.
Added to that is the equipment available now that puts effective diagnostics in the hands of almost any shop – precise and quality diagnostics information designed to get the job done right the first time around, quickly, with little lost time. Couple that with parts designed and manufactured to fit the application properly and inventory management systems that more effectively have the right parts available where needed, and bay productivity has increased as reported.
Lang Marketing estimates that the average car and light truck bay in the United States installed an average of $15,600 more products last year than the previous 10 years, and Lang expects this trend to continue, projecting even greater product growth per bay over the next five years.
Sometime stats can confuse us, especially seemingly contradictory information. But, in this case, fewer bays is seemingly offset by improved productivity in those remaining bays. And that is certainly a good thing.
Gary A. Molinaro