Publisher's Statement - February 2019
Disruptors to traditional independent repairers
There are new challenges the traditional aftermarket is competing with — or will be — and the best way to do so is to know they’re coming and be proactive, not reactive.
Yoshi is a new car service competing with others that will service a vehicle wherever it sits — home, work, wherever. Basic maintenance and services, such as fluid changes, wiper blade replacements, and on-site fueling are just a few it offers. Its business model is set on a monthly fee, and the fuel customers purchase is discounted based on the number of services they use. Their biggest funding source is General Motors and Exxon Mobile.
OEMs are also becoming more creative in attracting and keeping customers in their service bays. The free oil change for the first couple of years for a new car owner is expanding out to pre-owned/used vehicles to pull consumers back into their service departments.
Amazon and Sears have also recently announced a partnership where a consumer can purchase tires online from Amazon and have them shipped directly to a Sears Auto Center for the install. Sears’ CEO reported that the majority of customers who are seeking the service are people who have never set foot in a Sears department store before. Monroe Auto Service and Tire Centers also have a similar arrangement with Amazon.
Amazon is also branding its own engine oil. Wait for an Amazon partnership coming that will also perform oil changes.
Amid these challenges there are opportunities for independent repairers, they just need to determine how to differentiate themselves in the marketplace and what their longtime customers value most.
Miles-driven numbers are up, but have trended down
There are 38.4 million people in the U.S. between 16 to 24 years old. Of those, 12.2 million don’t have a license and 2.2 million don’t drive or have a car, according to a recent SEMA Market Research Report.
Social and recreation activity trips are down, especially with younger drivers, who are attached to smartphones and social media platforms. Folks are also working from home and commuting to the office less often.
Paradoxically, there are more licensed drivers on the road today than there have been in the last two years, says Nathan Shipley, automotive industry analyst for the NPD Group.
So what gives?
When consumers do travel, particularly in urban areas, they more and more take rideshare companies (Uber, Lyft) even if it’s just for a few blocks, which taken together, have contributed an estimated additional 5.5 billion miles of travel to the roads each year.
Ironically, miles-driven numbers have been the highest they’ve ever been, though the overall growth rate in miles-driven has trended down in the recent past, but is expected to remain level for the foreseeable future.