Looking at the automotive market from a macro perspective, all of the major indicators are moving in the right direction. The total number of miles driven continues to increase, approaching 2.8 trillion miles per year; cars and trucks are lasting longer, therefore requiring more service over the total life of the vehicle; the average age of cars continues to increase; and 38% of vehicles on the road are more than 10 years old.
The signs that business will be good in 2004 continue to be apparent from the shop owner level, as well. Optimism among repair shop owners remains as high as it’s ever been during the three years we’ve been tracking this data.
During the first week of July, we faxed a survey to 3,000 automotive service and repair shop owners across the country to gauge their business performance for the second quarter of 2004. The following charts summarize the pertinent data and allow you to compare your shop’s figures to this nationally representative sample.
The second-quarter 2004 results show that 42% of repair shop owners reported revenue to be above the second-quarter 2003 levels. Thirty percent said business was flat and 29% reported a decrease. The 29% figure may seem high but, in the second quarter of 2003, 40% of shops reported a decrease compared to 2002.
Another positive sign that bay repair activity is increasing comes from the number of shops looking to hire technicians. You can see the slight drop to 37% in the second quarter but, looking at the last three quarters, they are well above the prior four quarters. A couple of shop owners reported that they had to move to a smaller shop because they couldn’t find enough techs to make a decent profit in a larger location.
Percent of Shops Looking to Hire a Qualified Technician
Shop owners also remain optimistic for 2004 as a whole. Only 12% think the third quarter will be worse than the second quarter, 79% think business will be better than or equal to 2003, and 50% think it will be better than 2003.
How do you feel business will be in the next quarter compared to the current quarter?
Remember, these results are an aggregate of survey data from across the country. This information should give you a benchmark to compare your own results and also provide you with an indication of how other shop owners feel about future revenue. I hope you feel as optimistic about 2004 as these respondents.