The Automotive Industries Association of Canada (AIA Canada) sponsored a survey of 572 Automotive Service Providers (ASPs), with a view to assessing the size, sales performance and intentions of the Canadian service sector. In comparison with a similar study in 2010, the hours sold per transaction show only minor change, suggesting that the efficiency of Canadian operations has changed little. At the same time, the average size of operations has dropped from 5.9 to 4.8 bays, reflecting the higher number of smaller shops that operate in Canada.
The current study cites the performance characteristics of small (1-3 bays), medium (4-6 bays) and large (7+ bays) operations, focusing on Repair Orders per year, average hours sold per Repair Order, average Repair Orders per technician, per day, and hours sold per technician, per day, all with regional breakdowns.
Beyond describing the performance characteristics of shops within various size, region and banner/non-banner segments, the survey delivers a benchmark for the potential average of repair order size, for both mechanical and tire shops. The top third of “ticket size” performers produced 2.51 hours sold per repair order, versus 1.67 hours for the industry average (for tire shops, this figure was 2.01 hours). The technicians in these shops had the time to inspect and find the work on most vehicles. The service advisors in these shops had the time to explain and sell the work to most customers. It is therefore possible to say that the average customer needs, and is willing to pay for, 2.5 hours of service per repair order.
The study also delivers a benchmark for “productivity”, as defined by the number of hours sold per technician, per day. While “ticket size” and “productivity” are not directly contrary objectives, it is noted that shops performing well on the “productivity” benchmark could gain almost $100,000 in labour sales per year if they sold to the benchmark level of the “ticket size” performers. This could rise to as much as $200,000 for tire shops.
The overall survey result of 4.4 sold hours per technician among the non-tire shops (and 4.8 hours among tire shops), represents a massive productivity leak for the aftermarket. Only 55% to 60% of technician time is being sold, but hundreds of these same shops are looking for additional technicians and apprentices (as answered in the survey).
Shops are concerned about their ability to find staff. Over 50% of smaller mechanical shops, 65% of large mechanical shops and 83% of tire shops noted that they struggle to find employees. Overall, 57% of shops intend on hiring a technician in the coming year, while 45% are looking for apprentices. Almost one quarter intend on hiring a service advisor.
The survey focuses on the need for better management of the “productivity” versus “ticket size” matrix, with service advisor, inspection and scheduling issues at the fore. In contrast to this need, fewer than 30% of mechanical and tire shops, (and only 22% of non-banner shops), took any form of business/finance training in 2014. Training on vehicle flashing/reprogramming was taken by only 40% of all mechanical and tire shops – potentially an alarming figure given the competitive advantage of dealerships in this area. Notwithstanding these areas of concern, it must be noted that the Canadian aftermarket repair and maintenance sector is enjoying a period of positive performance and optimism as 57% of all shops intend on hiring in the coming year to meet increased business volumes.
If you are an automotive service provider (ASP) and would like to purchase a copy of the report, at a discounted price, please contact Igor Minic (firstname.lastname@example.org or (800) 808-2920) for payment details and download instructions. AIA members can download a free copy via their login account.