Rising disposable incomes will prompt consumers to make preventative repairs, driving demand
Los Angeles, CA (PRWEB) August 07, 2012
The Oil Change Services industry has stumbled over the past five years. Industry revenue is anticipated to decline at an estimated annualized rate of 1.8% to $6.3 billion over the five years to 2012. Firms provide oil changes and other automotive maintenance, including tire rotations, air filter changes and transmission flushes. “The revenue decline over the five-year period reflects the fall in demand the industry experienced during the recession,” says IBISWorld industry analyst Radia Amari. “The recession led to a significant drop in per capita disposable income, causing consumers to delay vehicle maintenance to save money.” Fewer cars were on the road as unemployment surged and less people commuted to work. However, there were some glimmers of hope. The recession also caused pent-up demand, as vehicle maintenance can be delayed, but not indefinitely. As such, industry revenue is expected to grow 1.2% in 2012 as consumers bring cars in for necessary maintenance that was put off.
In response to declines, industry operators have added other services besides oil changes to their service mix to increase revenue amid dwindling demand. A higher volume of cars coming in for service is now up-sold on other services to generate more revenue, as the industry responds to a decline in car volumes and a shift in consumer demand toward preventive repairs. Despite the industry's shift in strategy, external competitors still pose a threat as major retailers and warehouse clubs undercut traditional operators on price and speed of service. “To compete effectively,” adds Amari, “the Oil Change Services industry must focus on quality customer service to retain customers and to keep their businesses afloat.” The industry is characterized by a large number of small-scale operators, with the majority of companies operating on a local basis and owning just one establishment. Royal Dutch Shell PLC is the only industry major player.
The next five years are forecast to be brighter for the industry. Disposable income is set to rise and, in turn, consumers will visit industry firms at accelerating rates to attend to their vehicles. However, external competition will remain a concern for the industry as larger entities continue to pressure firms on price. Nonetheless, operators that build solid customer relationships have a chance at success. Over the five years to 2017, revenue is expected to grow. For more information, visit IBISWorld’s Oil Change Services in the US industry report page.
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IBISWorld industry Report Key Topics
Industry operators change motor oil, lubricate the chassis of automotive vehicles and provide other automotive repair and maintenance services, such as tire rotations and liquid flushes. Unlike auto mechanics, companies in this industry do not provide mechanical and electrical repair and maintenance. Industry operators are also not involved in body, paint, interior and glass repair. Companies that provide car wash services are also not included.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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