Low incomes hurt spending and caused consumers to repair their cars themselves.
New York, NY (PRWEB) February 24, 2014
The Auto Mechanics industry hit a speed bump in 2009 as the recession took hold of the economy, forcing consumers to constrict spending and fix their automobiles 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 reduced 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, reaching $59.5 billion.
According to IBISWorld Industry Analyst Kerry Coughlin, “External competition has had varying impacts on the industry over the past five years.” On one hand, the restructuring of major US auto manufacturers led to a large amount of dealerships going out of business. Consequently, consumers who previously went to dealerships for maintenance and repairs had to choose a different service provider, which led new customers to industry operators. Conversely, the drop in disposable income resulted in consumers attempting to maintain 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 in search of 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 and 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 subsequent growth in 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 manufacture cars, in order to meet the fuel-efficiency targets set by the Environmental Protection Agency,” says Coughlin. Ultimately, industry players that can handle these changes and fix newer cars will be more competitive during the next five years.
For more information, visit IBISWorld’s Auto Mechanics in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Auto Mechanics in the US industry repair and maintain vehicles, including passenger cars, trucks, vans and trailers. These operators often work on their own account or for small companies generally known as auto repair shops, garages and car care centers. They generally 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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