Low incomes hurt spending and pushed consumers to repair their cars themselves.
New York, NY (PRWEB) February 08, 2014
The Auto Mechanics industry hit a speed bump in 2009 as the recession took hold of the economy, forcing consumers to pull back on spending and fix their cars themselves. Industry operators recorded fewer cars coming into garages and had to mark down prices to compete with external competitors, such as auto parts retailers. The number of motor vehicle registrations decreased slightly during the recession, which led to fewer vehicles on the road and decreased demand for industry services. Since 2010, the industry has started to rebound slowly, with industry revenue increasing at an estimated average annual rate of 3.2% over the five years to 2014 to reach $59.5 billion.
External competition has had mixed effects on the industry over the past five years. On the positive side, the restructuring of major US auto manufacturers led to a large swath of dealerships going under. Consumers who previously went to dealerships for maintenance and repairs had to choose a different service provider, which pushed many new customers into industry operators' doors. On the contrary, the drop in disposable income resulted in consumers attempting to fix their own vehicles. In fact, the Auto Parts Stores industry (IBISWorld report 44131) recorded steady increases in revenue during the recession due to consumers opting for do-it-yourself repairs to save money. Many consumers will continue to visit auto parts stores during 2014 as they search for deals, while others will return to mechanics, causing revenue to increase an expected 2.1% over the year.
Signs of recovery have become apparent in the US economy. Consumers are expected to earn more disposable income; therefore, growing demand from car and automobile manufacturers will lead to an increase in the volume of cars on the road and subsequently, demand for auto mechanics. Consequently, industry revenue is forecast to increase over the five years to 2019. Auto manufacturers are constantly changing the way they make cars in order to meet the fuel-efficiency targets set by the Environmental Protection Agency; industry players that can handle these changes and fix newer cars will be more competitive during the next five years.
The Auto Mechanics industry has a low level of concentration. Over the past five years, market share concentration has remained steady. Operators have seen customers return to mechanics, which has allowed some smaller players to remain in business. Moving forward, IBISWorld expects consolidation to remain prevalent in this industry. Over the five years to 2014, the number of industry enterprises has remained flat at 86,597.
For more information, visit IBISWorld’s Auto Mechanics in the US industry report page.
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IBISWorld industry Report Key Topics
Auto mechanics repair and maintain vehicles, including passenger cars, trucks, vans and trailers. Auto mechanics often work on their own account or for small companies generally known as auto repair shops, garages and car care centers. They provide mechanical and electrical repairs and replace or repair engines.
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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