Truck Repair Franchises in the US Industry Market Research Report Now Available from IBISWorld

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Declines in per capita disposable income and corporate profit during the recession led to falling revenue for the industry. As incomes fell, businesses reduced their use of freight transportation. With fewer trucks on the road, demand for the industry's services fell. However, revenue is expected to recover over the next five years as rising demand for goods increases the need for freight transportation. For these reasons, industry research firm IBISWorld has added a report on the Truck Repair Franchises industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

As freight transportation rises, business will increase their demand for truck repairs

The Truck Repair Franchises industry was hit hard during the past five years. According to IBISWorld industry analyst Andrew Krabeepetcharat, declines in per capita disposable income and corporate profit during the recession reduced the frequency of passengers using trucks for everyday driving, and reduced freight truck use by businesses transporting goods. Also, due to the rising price of gasoline during the past five years, households and companies cut the truck use to save money, reducing the necessity for repair and maintenance services. Due to declining per capita disposable income, some consumers chose to purchase auto parts and repair their own trucks. As a result of these conditions, industry revenue fell at an annualized rate of 3.6% to $429.9 million in the five years to 2012.

The Truck Repair Franchises industry has faced external competition during the past five years, which has kept revenue down. The decline in per capita disposable income caused consumers to purchase used trucks that would require repair rather than new vehicles sold by dealerships that offered repair and maintenance services. However, the decline in disposable income also shifted demand away from truck repair franchises to auto parts stores, which allow consumers to purchase parts and fix trucks themselves at a reduced cost, says Krabeepetcharat. Larger commercial trucks were more affected by the decline in corporate profit because fewer goods were being transported across the country. As these larger freight trucks cannot be repaired without professionals and specialized equipment, the less expensive alternative offered by auto parts stores did not substantially decrease corporate demand for truck repair franchises. As a result, industry revenue it expected to increase at 0.8% in 2012. As the economy recovers, more households and businesses will return to using trucks and, consequently, will be willing to spend money on truck repairs. More consumers will be able to afford gasoline to drive trucks. As demand for goods rises, businesses will use more trucks for freight transportation. During the next five years, industry revenue is forecast to grow. In addition, profit margins are expected to increase as regulations on safety and emissions cause trucks to have a higher level of technology, making truck repairs more profitable due to the higher margin activities of repairing complex trucking machinery.

Some extremely large firms, including Walmart, have their own in-house fleet repair service centers. This decreases the odds of a large national corporation having a large contract with a single franchised truck repair service, which would give that operator a significant market share. This is because once some downstream companies become large enough to make a contract with a truck repair service operator, they typically contract with non-franchised firms due to their larger geographic reach. It is difficult for one owner of a franchised truck repair line to operate across a large geographic region because this owner must pay high startup fees for each establishment. As a result of a relatively small number of franchised stores per franchise, the industry is fragmented. Concentration has risen because the recession forced underperforming operators out of the industry from 2008 to 2010. In fact, over the past five years, the number of franchise owners fell at an average annual rate of 2.6%. This left a smaller number of franchises to scoop up the remaining demand. The more well-known, reputable and strategically placed franchises benefited the most from this landscape change, causing some firms to account for a larger market share. For more information, visit IBISWorld’s Truck Repair Franchises in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes establishments that complete repair services for trucks, including oil changes and replacement services. Reports in our Business Franchise collection focus solely on the operation of franchised outlets and exclude non-franchise data. They show the total number of franchise outlets, total franchise revenue and the average profit margin earned by franchisees. Our reports also highlight the largest franchisors by market share.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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