Business was up but hiring and retention continues to be a challenge for shops.
The conclusions come from the Automotive Service Association’s recently-released How’s your Business? Survey. Members of the American association were asked about the business operation of their shop for the first six months of 2016. Last taken in 2014, the ASA said the latest results “provided some surprising new developments in the industry.”
The majority of repair shops saw an increase in profit, with 55 per cent saying so. Almost a quarter reporting seeing no change with 21 per cent reporting a decrease. Almost half of respondents said their estimated gross sales range from $500,000 to $1 million — 27 per cent said they bring in between $500,000-$750,000 and another 21 per cent said their gross sales range between $750,000-$1 million. Another 18 per cent reported their sales between $1 million-$1.5 million.
And sales are up, many shops found. More than half (55 per cent) saw an increase in sales from 2015, while a quarter reported a decrease and one in five saw no change.
But this good news is off-set by the fact that many are feeling the crunch of finding qualified employees. When asked about their biggest challenge, technician shortage topped the list with 45 per cent of respondents listing it as an issue. One in five said changes in technology was their primary concern.
“Keeping up with the changes in the automotive service and collision repair industries is a full-time job these days,” said Tony Molla, vice president of the ASA. “The latest survey results only confirm that we are in a dynamic, technology-driven cycle that is changing the way business models are evolving, while reinforcing the need for qualified talent to continue building on the success our member shops report.”
The boost in sales may be correlated to an increase of maintenance awareness. Three-quarters of respondents said customers are regularly maintaining their vehicles and 89 per cent said customers are purchasing major repairs.
Repair work is most common for shops, as 56 per cent said that dominates their time. Maintenance accounts for 38 per cent of work. Most ticket charges (21 per cent) are over $500, shops reported. Just 6 per cent of work cost under $200
Almost all respondents were independently owned as just two per cent said they were part of a franchise. Family-owned shops account for 89 per cent of shops. Eighty-seven per cent of respondents being the owner of the business. ASA members’ average age is 55 and have spent 34 years in the industry. Given that they’re not at the typical retirement age, it may not be surprising to see that 72 per cent have no intention of selling their business in the next five years.
When it comes to training, technicians are putting the hours in. Only 10 per cent spent four hours or less in training while 56 per cent spent at least 17 hours training per employee. About the same (17 per cent) are spending between five and 10 hours and 11 to 16 hours training.
As for owners, 58 per cent spent 17 hours or more training, with 16 per cent spending between 11 and 16 hours. Still, though, 15 per cent spent four hours or less in training.
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