AutoMD Survey Indicates That 10+ Year Vehicle Lifespan Is The New Normal
Lengthy vehicle ownership is the new normal, according to AutoMD.com‘s 2014 Vehicle Mileage Survey, where nearly 80 percent of consumers surveyed indicated that they are comfortable with a 10-plus years or “until it dies” vehicle lifespan. And, the majority who are keeping their vehicle for longer said that an improving economy won’t change that, as evidenced by the steady growth in miles they are reporting on their primary vehicles.
And, while the survey does show that, year over year, the number of consumers who say they plan to drive their primary vehicle “until it dies” has decreased from a high of 56 percent in recession-impacted 2010 to 35 percent in 2013, over half said they still plan to drive their vehicles for more than 100,000 miles, with the vast majority saying that the old two- to three-year ownership model is dead.
“We have been tracking the lengthening ownership cycle since 2010, and, what was at first a reaction to a bad economy, has now become a new reality—with the majority holding onto cars up to and past the 100k mark,” said Brian Hafer, vice president of marketing for AutoMD. “The number of consumers saying that over 10 years is the appropriate time to own a car has not shifted, even as the economy has improved.”
Car owners continue to rack up the miles. Since 2010, when only 47 percent of survey respondents reported having over 100,000 on their current vehicle, now more than 64 percent have racked up that many miles. And some have racked up even more, as 33 percent said they now have over 150,000 miles on their current vehicle.
AutoMD says 46 percent of respondents said they plan to put 75,000 additional miles on their current vehicle than they drove on their previous vehicles. This is a dip since 2011 when it was 67 percent. But, this makes sense given that many of these consumers have probably switched their high mileage vehicle for their next vehicle since 2010. AutoMD says it’s also likely that people who reported in 2010 that they planned to add 100,000 additional miles have been adding those miles over the past few years and have fewer miles to put on now.
Fewer DIFMers than DIYers plan to put 75,000 additional miles on their vehicle, 38 percent versus 51 percent. And, of those planning to hold their vehicles longer than previously, more than 50 percent said the improving economy has no impact on how long they hold their vehicles.
Interestingly, one in four of respondents holding onto their vehicles for longer said that they are more likely to stick to the vehicle’s maintenance schedule and will opt to visit an independent repair shop to save money. And, when all respondents were asked what kind of service center they are most likely to use, 71 percent said an independent repair shop.
Only 10 percent of those surveyed said they plan to purchase a new vehicle, leaving 90 percent of respondents holding, maintaining and repairing.
The amount consumers spend on vehicle repair has stayed relatively flat from 2010 to 2013 as nearly 50 percent reported spending $500 or more a year, with 16 percent saying they spend more than $1,000.
The AutoMD 2014 Vehicle Mileage Survey was conducted online among 4,398 car owners from July 2013 to Feb 2014.
U.S. Auto Parts Says No Plans To Sell AutoMD Outright
The management of U.S. Auto Parts Network took time during a March conference call with members of the financial community to address their intentions for the AutoMD.com business. “We need to dispel the rumor that we’re running a process to outright sell AutoMD,” CEO Shane Evangelist said. “This is simply not the case, nor has it ever been the case. We continue to believe this opportunity has the ability to add significant shareholder value of which we do not believe the market gives us credit today.”
This is most likely a response to a statement made back in December by Maguire Asset Management, an activist shareholder that owns a 5-percent stake in U.S. Auto Parts. Maguire claimed back then that the U.S. Auto Parts board of directors had put AutoMD up for sale.
Our sister publication, The Greensheet, ran a story about this on Dec. 12. When we reached out to U.S. Auto Parts at the time for confirmation, we received no reply.
Now, management stresses that AutoMD is not outright for sale.
For 2014, management anticipates that U.S. Auto Parts’ net direct investment in AutoMD will be around $1.50 million, with a major focus on signing up shops to AutoMD Insta-Quote. This service allows shops to gain visibility from end-market customers and allows customers to get real-time, transparent, quotable prices across shops in each market.
“As always, we will evaluate strategic partners if we believe they can accelerate growth and add shareholder value,” Evangelist said on the March 2014 call.
Bosch Offers Web Marketing Aid To Network Shops
Bosch is launching a “digital marketing university” to provide Bosch Car Service member shops with new training and tools for website marketing, web scheduling, social media, loyalty and search engine marketing. Bosch intends to roll out its digital marketing university in the next few months. The initial training sessions will introduce the latest digital marketing technology. These sessions will be followed by webinars and access to online resources.
“While our service centers are highly skilled in servicing vehicles, promoting their businesses properly online is out of the comfort zones of many shops,” explained Michael Lippman, marketing manager for the Bosch Car Service program. “With our new digital marketing university, we’ll give them the assistance they need to grow their businesses.”
Rad Air Launches Hybrid/EV Division
Rad Air Complete Car Care & Tire Centers, a chain of auto repair shops in northeast Ohio, has launched a new division called Cleveland Hybrid that specializes in hybrid and electric vehicle repairs, maintenance, and replacement batteries. “We have been training our staff on hybrid and electric vehicles since 2005,” said Andy Fiffick, president of Rad Air. “Hybrid and EV owners can face challenges when attempting to get their cars repaired or find replacement batteries. The goal of Cleveland Hybrid is to offer an affordable alternative to the pricey services offered by traditional dealers.”
Cleveland/Akron area hybrid car use the services of Cleveland Hybrid at any local Rad Air location. Cleveland Hybrid offers the same benefits as all Rad Air locations.
Federated Augments Car Care Program
Federated Auto Parts has expanded and made enhancements to its Federated Car Care Center program. Recent additions include the MechanicNet automotive marketing program, allowing individual car care centers to create marketing plans specific to their own business, and the BusinessVoice on-hold marketing program.
Popular staples of the Federated Car Care program remain, such as the free roadside assistance program, the nationwide warranty program, and the dedicated Federated Car Care website, which features a web page for each car care center member. Also included is access to a variety of training programs and marketing support, including point-of-sale material, signage, and promotions like “Get Dirty with Kenny” and the annual car care sweepstakes.
Mitchell 1 Offers Live Training Sessions
Mitchell 1 now offers live training sessions on a variety of its products — including ProDemand, SureTrack and ProPack — through the new Get2Know Training Center section of its website. Sessions cover various product features and include real-world example lookups followed by questions and answers. Upcoming training sessions are listed by week on the homepage of the Get2Know Training Center site, as well as on the monthly calendar of events page.
In addition to live training, the Get2Know Training Center also includes a library of training videos for ProDemand covering such topics as vehicle selection, maintenance, codes, components, service manual, SureTrack, estimate guides and quotes.
Dorman Launches New Training Program
Colmar, PA-based Dorman Products has launched a new training initiative, called Dorman University, that provides web-based access to product training related to the company’s categories and product offering. It’s open to the public and available for all channels of the auto care industry.
After visiting DormanUniversity.com and enrolling in the program, users can select from a variety of courses, including an introduction to hybrid drive batteries, an overview of Dorman’s TPMS program and an overview of the diesel parts market. Each training module consists of course material that can be downloaded, videos or presentations, a brief quiz on the course material, an opportunity to earn a certificate of completion and a closing review summary.
ATD Completes Terry’s Tire Down Acquisition
On March 28, American Tire Distributors (ATD) completed its acquisition of Terry’s Tire Town Holdings for an aggregate purchase price of roughly $365.60 million — approximately $363.40 million in cash and assumed debt of $2.20 million. The deal was struck earlier this year.
In connection with the acquisition, ATD has entered into a credit agreement that provides for a $300-million senior secured term loan facility. The net proceeds from this term loan were used to finance a portion of the closing purchase price. The maturity date for the term loan is June 2018.
New Web Directory, Reviews Management Service For Tire Dealers, Repair Shops
Tireweb Marketing, which has specialized in customized websites for tire dealers and auto repair shops, has launched TirewebLocal, a web directory and reviews management service for tire dealers and repair shops. It’s designed to help shops create and manage their web presence across more than 250 online directories, review websites, search engines and mapping services.
“Having a website is only part of the picture when doing business online,” explained Matthew Walker, president of Tireweb Marketing. “Over 220 million consumers in the USA use review websites, local directories, search engines and mapping services to find businesses in their local area. TirewebLocal ensures that tire dealers are listed on these websites and that the details about them are accurate, including their business name, opening hours, website address, map, contact details, store photos and the services they offer. If a dealer does not provide accurate information across all these directories, they are likely losing business.”
TirewebLocal is a monthly subscription-based service.
Top Shop Total Business Group Launched
Tire Review magazine and the Strategic Alliance Group (SAG) are working to develop and produce Top Shop Total Business Groups, a premium-level peer-to-peer support and education program for U.S. and Canadian independent tire dealers. Founded in 2011, the Strategic Alliance Group facilitates a number of SAG-founded and private-brand 20 Groups for retail and commercial tire dealers.
Prospective Total Business Group members will be specifically invited to join. Seats for each group will be set based on geography and demographics so that participating dealers are not in competition with each other. This will allow participants to share ideas, concepts, best practices and business information that will allow the creation of meaningful financial benchmarking data.
Stu Zurcher, founder of the tire industry’s 20 Group concept and president of SAG, said the Total Business Group concept is similar to the 20 Group programs that currently exist, only in a “super-charged” form. “The focus of this new program will be to assist highly successful tire dealers continue to improve their operations and fuel future growth by applying many of the traditional 20 Group peer education and support techniques to a menu of additional educational and data-driven offerings,” Zurcher explained.
In the coming months, the group will begin extending invitations to targeted dealers and developing set groups. The first regular meeting of a finalized group is expected to take place by the fourth quarter of 2014.
Shell Fleet Card Users Get Jiffy Lube Discount
Shell has entered into a strategic relationship with Jiffy Lube International that allows customers who sign up for the Shell Fleet Navigator Card to receive a discount off services at participating Jiffy Lube service centers. These medium and large fleet drivers can get a 20-percent discount on Jiffy Lube Signature Service oil changes and additional preventive maintenance services at participating locations across the United States.
The Shell Fleet Navigator Card is available to fleets with 80 or more vehicles.
Tint World Announces Partnership With Katzkin
Tint World is partnering with Katzkin on a full-service, one-stop approach to vehicle personalization that provides a complete cloth-to-leather interior transformation within a 24-hour timeframe. The Katzkin program will be available at 36 Tint World franchises throughout the country, with an expected expansion into 45 Tint World franchises in the U.S. before moving into its international operations by year-end.
Katzkin will be providing a kiosk within each of these shops, providing customers with a touch-and-feel leather sample as well as access to the company’s VIS (vehicle interior selector) with over 500 pre-designs for more than 1,000 vehicle patterns, with the option of heated and cooling seats. An initial soft rollout will begin at Tint World stores in late April, including point-of-sale material and detailed ordering information.
This alliance opens a new channel for consumers to upgrade their vehicles with a new leather interior, while also customizing their ride through other interior and exterior enhancements at the same time and same facility.
Additionally, Tint World’s partnerships with Katzkin auto leather interiors — as well as VizuaLogic Tint World branded headrest tablets and Tint World branded spray-in bedliners — has lead to the development of advanced training for new products and services, which is now available to current Tint World franchisees. The advanced training will include technical product knowledge and installations headed by Ron Leslie, vice president of restyling sales, and VizuaLogic representative David Bowen.
Safe Drive Systems Debuts In U.S. Aftermarket
Safe Drive Systems has introduced its anti-collision radar systems to the U.S. aftermarket. The launch includes the introduction of two systems designed to help drivers stay alert and protected during travel: a premier system and a premier plus system.
The premier system includes a forward collision warning that uses radar technology to monitor a driver’s distance from vehicles and bicycles on the road ahead, and notifies the driver with audio and visual alerts when approaching another vehicle too closely. In addition to the collision prevention system found in the premier system, the premier plus system features a lane departure camera.
Safe Drive Systems are available for installation nationwide and are compatible with most cars manufactured after the year 2000.
AAIA Releases Digital Tool & Equipment Purchasing Report
The majority of tool and equipment purchasing decision-makers used the Internet primarily for seeking information, not for actually purchasing tools and equipment, according to the AAIA 2014 Digital Tool & Equipment Purchasing Trends study. This recently released report provides insight into overall factors influencing tool purchasing decisions, online tool and equipment purchasing experiences, type of tools and equipment planned for future purchases, and the percent of tools and equipment purchased online.
The two-part report explores decision-makers’ use of the Internet as a tool and equipment purchasing medium. The first part analyzes tools purchasing, with the second focusing on equipment purchasing — all of which is based on a redesigned survey created by the AAIA Tool & Equipment Committee.
The report — which allows users to download Excel-based files, charts, tables and graphs that can be copied and pasted for presentation — is $175 for AAIA members and $350 for non-members. To order, visit www.aftermarket.org and click “Market Intelligence” or call AAIA market research at (301) 654-6664.
ASA Offers Mopar TechAuthority Discount
ASA is offering full access to Mopar’s TechAuthority Online for $120 for an entire year as a member benefit. That’s less than half the price of the published 30-day cost. This special offer is only available to the first 300 ASA members to contact the association by April 30. The subscription includes access to service information, OEM factory recalls, diagnostics and TSBs.
According to ASA, individual 12-month subscriptions to the site normally sell for $1,800. A 30-day subscription sells for $250. ASA members are now eligible for a 12-month subscription at 1/15th of the regular price.
To take advantage of this offer, call Terri Ruppert at ASA headquarters at (800) 272-7467, ext. 131 or (817) 514-2931 (direct line), or send an email to ASAspecials@ASAshop.org.
To qualify for this offer, you must be an ASA member in good standing and pay the $120 subscription fee in full prior to the deadline. The annual Mopar subscription will be activated May 5.
Salt Lake Community College Launching Automotive Intern Program
Salt Lake Community College (SLCC) will be offering a new, for-credit automotive internship course. Second-year students working toward an associate of applied science degree in SLCC’s automotive technician program will be able to earn six credit hours by taking the Roger L. Miller Automotive Internship Class. Through this ongoing class, which begins this summer, students will work in paid and unpaid internships at a variety of participating companies and receive at least 180 hours of on-the-job training.
Auto Buyers Gravitating To Compact SUVs
J.D. Power reports that the compact SUV segment has been the most popular segment among U.S. new-vehicle retail buyers so far in 2014, accounting for 17.6 percent of all new-vehicle sales — an increase of 3 percentage points from the first quarter of 2013 when compact SUVs was only the third best-selling vehicle segment, behind compact cars and midsize cars. This year, however, midsize and compact cars follow compact SUVs in market share, each accounting for 14.9 percent of retail sales.
“Part of the success of the compact SUV segment is the large number of new or recently redesigned models it contains,” explained Thomas King, senior director of the Power Information Network from J.D. Power. “In addition, the harsh winter weather has enticed some consumers to move into the crossover SUV market because of their all-wheel drive or four-wheel drive capabilities.”
There are 24 compact SUV models on the U.S. market, with nine being all new or redesigned for 2014.
Temperature Extremes Affect Electric Vehicle Range
According to research conducted by the AAA Automotive Research Center in southern California, electric vehicle (EV) range can be reduced by an average of 57 percent based on the temperature outside.
To better understand the impact of climate on electric vehicle batteries, AAA conducted a simulation to measure the driving range of three fully electric vehicles in cold, moderate and hot weather. Vehicles were tested for city driving to mimic stop-and-go traffic and to better compare with EPA ratings listed on the window sticker. The vehicles were fully charged and then “driven” on a dynamometer in a climate-controlled room until the battery was fully exhausted.
The average EV battery range in AAA’s test was 105 miles at 75°F but dropped 57 percent to 43 miles when the temperature was held steady at 20°F. Warm temperatures were less stressful on battery range but still delivered a lower average of 69 miles per full charge at 95°F.
Nissan Announces Leadership Changes In The Americas
Nissan recently announced a number of leadership changes within its North American and Latin American operations, effective April 1. The following summarizes a few of those that more directly impact the auto care industry …
• John Spoon, previously vice president of parts and service, was named to a new position as vice president of customer quality and chief customer officer for the North American region.
• Kent O’Hara was promoted from senior director of aftersales to vice president of aftersales for the North American region.
• Jack Wilkerson went from director of Infiniti operations to director of aftersales, sales and marketing.
• Eric Ledieu went from director of aftersales at Nissan Canada to chief marketing manager for the Altima, Maxima and GT-R.
• Michael Soutter was promoted from senior manager of field operations and business planning at Nissan Canada to director of aftersales for Nissan Canada.
• Kim Less was promoted from senior manager of parts and service in the supply chain management unit to director of parts and distribution.
• Ricky Mitchell went from senior manager of vehicle purchasing for the Renault-Nissan purchasing organization to director of interior, exterior and aftersales purchasing.
NASTF Recognizes Gorman For 14-Year Effort
The National Automotive Service Task Force (NASTF) last month honored Charlie Gorman, executive manager of the Equipment & Tool Institute (ETI), for his years of service to NASTF. Gorman, who currently serves as immediate past chair of the organization, first volunteered for and gave support to the task force shortly after its formation in 2000.
RMA’s Scrap Tire Specialist Is Retiring
Michael Blumenthal, vice president of environment and resource recovery, will retire from the Rubber Manufacturers Association (RMA) effective July 11. He has led RMA’s scrap tire management efforts since 1990. Blumenthal has coordinated nearly three dozen national and regional conferences on scrap tire management and spoken at over 200 trade shows and conferences since 1990.
People Watching 4/9/14
• ASA chairman Darrell Amberson has been promoted to president of operations at LaMettry’s Collision, Glass & More, which has eight shops in the Twin Cities area of Minnesota.
• Yokohama Tire Corp. has promoted Dan Funkhouser to director of commercial dealer business, responsible for all commercial dealer and associated national account business. Funkhouser had been commercial zone manager.
• The Association of Global Automakers — a group that represents international motor vehicle manufacturers, OE suppliers and other automotive-related trade associations — has selected John Bozzella as its new president and CEO. Bozzella has nearly 20 years of experience as a public policy executive with Chrysler and Ford.
News Briefs 4/9/14
• Several governors across the country have declared April as Car Care Month in their respective states.
• The Indiana Auto Body Association (IABA) is now the second supporting association member of ASA.
• Alldata has updated its core products, Alldata Repair S3000 and Alldata Collision S3500, with a VIN decoder.
• Snap-on has introduced the ETHOS+ Technician Plan, a way to get an ETHOS+ scan tool, software upgrades and full-warranty coverage on a weekly payment plan. The company offers two- and three-year ownership options.
• Porsche coverage is now available in the optional European software for Snap-on’s family of diagnostic tools via Software Upgrade 14.2.
• Speedemissions Inc. saw its revenue decrease 8.5 percent to $7.10 million in 2013 as it net loss widened from $656,037 to $814,482 on a year-over-year basis.
• American Tire Distributors saw its net sales rise 11.1 percent to $3.84 billion in 2013, primarily driven by the addition of new distribution centers as well as acquisitions. This helped ATD to pare down its net loss from $14.35 million a year ago to a loss of $6.36 million.
• CarMax’s service department sales increased 1.1 percent to $25.60 million in the three months ended Feb. 28, 2014.
• Rotary Lift now requires each of its authorized installer companies to have at least one Automotive Lift Institute (ALI) certified lift inspector on staff.
• In just under 12 months of operation, brake-school.com (the online training site from Bendix Commercial Vehicle Systems) now serves over 16,000 registered users.
• Lincoln Electric now offers, for purchase, a welding equipment warranty extension program for an additional two years, building on the standard three-year warranty included with the purchase of the company’s welders and wire feeders.
• Lincoln Electric now offers a Weld Parameter Guide mobile application for Apple iOS and Android-enabled devices.
Event & Trade Show Briefs 4/9/14
• The Equipment & Tool Institute (ETI) has finalized the speaker lineup for ToolTech 2014 to be held April 28-May 1 in Sonoma, CA. Click here for more information.
• Hotel reservations can now be made via the “travel” section of the CARS and NACE websites for the week of July 27 and all events taking place during “Industry Week” in Detroit.
• The sixth annual Automotive Training Expo (ATE), hosted by the ASA Northwest Chapter, drew more than 600 technicians for 62 training sessions over the three-day event held last month in Seattle.
• The ITEC Tire Dealers/Auto Service show will be held Aug. 20-22 at the Caribe All-Suite Hotel & Convention Center in Orlando, FL. Click here for more information.
• ASA Midwest is taking the Vision Hi-Tech Training & Expo event “South of the Border” to Cancun, Mexico. It will take place Nov. 13-17.