Automotive repair and service shops in Ontario report business starting to return to normal levels this summer, with pent-up demand starting to be released in July.
A new study by DesRosiers Automotive Consulting (DAC) found a significant portion of respondents noted sales increases in recent weeks, with July especially showing strength.
“In total, a remarkable 47.2% of respondents indicated that sales were up in July over 2019 levels, a percentage that dipped to 41.1% in August,” analysts said.
When asked about the change in the dollar value of their sales over 2019, a slim majority of respondents noted a decrease of between 1% and 25%.
Working with the Automotive Aftermarket Retailers of Ontario (AARO), the data company also found that clear growth has occurred in the number of repair facilities operating on normal hours, climbing to 73.7% for August 2020.
Those respondents working reduced hours dropped from 38.5% in April to 26.3% in August, with no respondents noting complete closures for August.
The survey was conducted during the week of Aug. 31 to Sept. 6.
Analysts at DesRosiers say the aftermarket is uniquely impacted by the unprecedented drop in kilometers driven in recent months.
“Although the aftermarket outlook for the fall is far from clear as uncertainty remains both about public health concerns and the ‘stickiness’ of changes in structural issues such as working from home, and online shopping,” said Andrew King, managing partner of DAC.
In terms of changes in different types of work, diagnostic work was the most likely to remain unchanged, with 43.5% of respondents noting little change in that category. Moderate to severe declines were most common for the preventative maintenance category at 60.0% combined.
When asked for their outlook for 2020 as a whole, 11.8% of respondents noted an expected business increase. The rest expected decreases – with 34.1% expecting a decrease of 1% to 10%, and a similar portion—30.6%—expected a larger decrease of 11% to 25%.
Respondents also noted significant issues with parts supply over the summer – especially OEM parts – with 75% of respondents indicating problems in this area.