Consumers who previously performed self-repairs will return to industry operators
New York, NY (PRWEB) July 31, 2014
The Auto Maintenance and Repair Franchises industry hit a bump in 2009 as a result of the recession. In 2009, the national unemployment rate suffered a steep increase. As a result of a higher national unemployment, many consumers stopped commuting to work, which ultimately reduced the number of vehicles on the road. In addition, many consumers substituted their vehicles for public transportation, carpooling and cycling, which resulted in less need for maintenance and repair services. This factor, coupled with lower disposable incomes, caused many consumers to opt for self-repairs through purchases from auto parts retailers. Together, these factors caused industry revenue to slip over 2009.
According to IBISWorld Industry Analyst Omar Khedr, “Although the five-year period began roughly, industry revenue is expected to increase at an average annual rate during the five years to 2014.” 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 franchises. In addition, slow growth in disposable income did not prevent vehicle operators from continuing to use their cars; consequently, the need for more repairs created steady demand for industry services. As a result, industry revenue is expected to rise in 2014.
Over the next five years, industry revenue is expected to continue growing in line with the overall economy, increasing at an average annual rate in 2019. Improving economic factors, including disposable income growth, are expected to accelerate during the five years to 2019, resulting in solid growth opportunities for the industry. “The national unemployment rate is projected to decline at an average annual rate, leading to an increase in the number of workers who commute by car,” says Khedr. Over the same period, per capita disposable income is forecast to increase at an average annual rate, bringing more car owners back to industry establishments instead of performing self-repairs. Also, the growing technological complexity of cars will drive more individuals to seek expertise from industry establishments.
For more information, visit IBISWorld’s Auto Maintenance & Repair Franchises in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments that provide a wide range of mechanical, electrical and engine maintenance and repair services for automotive vehicles. As a franchise industry, this industry report focuses solely on the operation of franchised outlets and excludes nonfranchise data. Data reveals the total number of franchise outlets, total franchise revenue and the average profit margin earned by franchisees.
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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