Shop Profile || Owner Profile || Staff Profile || Sales ||
Customer Demographics || Marketing and Advertising || Industry Issues

In 2000, 75,824 independent mechanical repair businesses employing 300,471 individuals were helping the American motoring public stay on the road. According to the U.S. Bureau of Labor Statistics, this number has continued to increase since the early 1990s. Currently, a total sales figure for independent general repair facilities equal an ASA-estimated $37,218,000,000 for 2000. These figures do not include the approximate 22,000 auto dealerships with service facilities that took in approximately $24 billion ($13.5 billion in labor and $10.5 billion in parts) in 2000, according to the National Automobile Dealership Association.

Shop Profile

Running consistent with previous years, automotive mechanical repair businesses have an average of seven service bays and encompass approximately 5,492 square feet. Besides being independently owned by 98 percent of respondents, the facilities also tend to be family-owned businesses (89 percent) that have been in operation an average of 22 years.

To profile the market a bit more clearly, ASA looked into market size of respondents along with annual sales. According to survey results, 27 percent of responses come from businesses with city populations under 25,000. Thirty-two percent of responses were from businesses in cities of 25,000 to 100,000. Large cities with populations of 100,001 to 500,000 people provided 21 percent of the responses and the remaining 20 percent came from businesses in cities larger than 500,000.

Fourteen percent of responses were generated from mechanical businesses earning $250,000 or less annually. Businesses with sales between $250,001 and $500,000 provided 29 percent of responses. Twenty-two percent of business owners had annual sales between $500,001 and $750,000. Sixteen percent of responses came from business owners with annual sales between $750,001 and $1 million. Thirteen percent of those earning between $1 million and $1.5 million provided responses while the remaining 6 percent cited annual sales in 2000 to be $1.5 million plus.

Internet access has continued to increase and should be reaching a saturation point within the next year. Currently, 85 percent of mechanical businesses have Internet access within their repair facility; leaving just 15 percent without an Internet connection.

Internet activities at work tend to be work related with 63 percent using the Internet to research products, 61 percent getting repair procedures, 50 percent advertising their shop, and 45 percent purchasing products and 41 percent ordering parts. News (34 percent), entertainment (32 percent), Web-based technical training (25 percent), transferring funds (20 percent) and chat/discussions rounded out the top 10 activities. Respondents were allowed to select all applicable activities, therefore producing greater than 100 percent.

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Owner Profile

The majority of responses to the 2001 “How's Your Business?” survey were received from business owners (95 percent) who manage an average of one mechanical repair business. The remaining 5 percent were business managers.

The ASA mechanical business owner is layered with professional qualities. According to the results, the average age of the owner is 48 and the owner comes to work with 28 years of experience. ASE certification is as important to shop owners as it is to technicians, with 69 percent of owners being ASE certified in at least one area. In addition, 41 percent of owners are also currently participating in Automotive Management Institute (AMI) management courses. This has increased from the 35 percent participating in 2000. And 14 percent have received their Accredited Automotive Manager (AAM) designation from AMI.

Owning and managing a repair facility takes a large amount of time and dedication. Along with that, ASA shop owners also understand the importance of being involved in the industry and helping to promote a technical field that keeps over 200 million vehicles on the road. Currently, 24 percent of ASA shop respondents are participating in a secondary or postsecondary educational advisory committee. And, 32 percent are participating in a school-to-work/apprentice program. This remains a slight bit shy of the 64 percent who reported they were willing to sponsor an apprentice, co-op or work-study student in 2000.

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Staff Profile

Number of Employees - Click here to enlarge graph.

Running a business with just a few technicians and an owner/manager is becoming rare. This year, the “How's Your Business?” survey looks at several of the repair business players. Currently, an average shop employs one to two entry-level technicians, three journeyman technicians, one to two management staff and one to two service writers.

Interestingly, three of the technicians, on average, are ASE certified in at least one category. This number remains consistent with the 2000 survey results. The number of updated education hours technicians are undergoing has decreased from 34 hours in 2000 to 29 hours in 2001. This decrease is starting to show a trend from 1997's 36 hours.

The majority of educational funding continues to come from business owners. According to the 2001 “How's Your Business?” results, 77 percent of employers fund the continuing education of their technicians. Some 19 percent of businesses ask for a partnership between business and employee for continuing education. The remaining 4 percent require each employee to solely finance his or her continuing education. In relation to the funding, 74 percent of business owners allow their technicians to attend training during the workday.

Annual Continuing Education Hours - Click here to enlarge graph.

Education comes in many forms for both technicians and business owners. The top two sources of education come from product manufacturers (67 percent) and association seminars (64 percent). Three sources of education running neck and neck are independent training providers (50 percent), industry seminars (48 percent) and trade magazines (46 percent) such as AutoInc. In-house programs are used by a third (33 percent) of those surveyed.

This year ASA added OEM training and Web-based training as educational options. Twenty-one percent and 8 percent use these, respectively. It will be interesting to watch future surveys for possible changes in percentages as technology and learning tools change.

Compensation for mechanical business employees is steadily increasing. Entry-level technician salaries increased to an average of $23,509 for 2001. Journeymen technicians generate an annual income of approximately $42,062. This year, service writers had an average salary of $36,151. Managers close out the salary list with average pay of $49,359. Each segment showed at least a $1,000 increase from 2000.

The compensation strategies for technicians strongly resemble those of previous years. According to the 2001 “How's Your Business?” survey results, 39 percent of technicians receive an hourly wage. This is up from the 32 percent paid hourly in 2000. This is followed by 27 percent of technicians being paid in the form of a percentage of flat rate. Like last year, 11 percent receive a salary and 14 percent of technicians are paid hourly plus commission. Six percent receive a percentage of labor rate and 5 percent have their earnings based on salary plus commission.

Technician Benefits - Click here to enlarge graph.

Standard benefits provided to employees include paid vacations (95 percent), uniforms (95 percent), paid holidays (92 percent), training and seminars (84 percent), medical insurance (79 percent) and a yearly bonus (50 percent). Other business owners go even further by offering 401(k)/retirement benefits (38 percent), life insurance (36 percent), and dental insurance (30 percent). Some respondents also said they provide tool benefits (19 percent) and eye care insurance (19 percent). Only a fraction of a percentage (0.3 percent) offer no benefits.

As in previous years, owners were asked what category of mechanical business employee would they be in the most need of in the upcoming year. Thirteen percent of respondents feel as if their business is running smoothly with their current amount of employees. Nineteen percent would like to increase the number of entry-level technicians, while 11 percent look to add a service writer. Journeyman technicians are still the most sought-after employee (56 percent).

Each year there is a debate about the availability of technicians and how the number of technicians is declining. Interestingly, according to the Bureau of Labor Statistics, the number of employees within independent general repair businesses has continued to increase. Perhaps the point of debate is the quality of the technician and the willingness of the business owner to compensate and train individuals with potential.

Retention of technicians is one way of maintaining a strong business. The “How's Your Business?” survey asked business owners to provide the number of technicians leaving and the number hired in their businesses in 2000. In 1999, it was one and one. This changed for 2000, with an average of two technicians leaving and two technicians being hired. On the surface, shops are replacing technicians with technicians. The variation may be within the skill level of the new technicians.

So, where are technicians coming from and going? Retirement, new occupations within the current business, change in career and movement to another repair business are options for where technicians are going. As for where new hires are coming from, survey results showed 65 percent of new hires come from referrals or word-of-mouth advertising, 13 percent come from vocational schools, 11 percent are from classified advertisements, and 7 percent are attracted from other repair facilities. Four percent of repair facilities are getting new technicians from apprenticeship or industry school-to-work programs. This is an increase from 2 percent in 2000.

ASA's Mechanical Division is currently working on federal legislation (SWEA Bill) that would provide a $15,000 tax credit for businesses that participate in an apprenticeship program. Currently, 32 percent of 2001 survey respondents are sponsoring an apprentice or intern. Perhaps the next survey will show an even greater increase in technicians from apprenticeship programs.

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Sales

The average ticket price per repair order continues to increase slightly over the years. According to survey results, the average ticket in 2001 was $323.23. This is up from the $318 in 2000. Forty-seven percent of the ticket price goes to parts and 51 percent goes to labor. The remaining 2 percent are incidentals. The average number of repair orders per week (typically a five-day workweek) is 64 for 2001.

Again, Monday is considered the busiest day of the week for 51 percent of businesses. This is followed by Friday (25 percent). Tuesday gets 10 percent of the busiest day vote while Thursday receives a modest 7 percent. Closing it out is Wednesday at 5 percent and Saturday at 2 percent.

Independent mechanical businesses are resisting the urge to open for full days Saturday and Sunday. A few businesses offer Saturday morning hours, but the majority are open Monday through Friday.

Showing a bit of an increase from 2000, summer is considered the busiest season by an overwhelming 84 percent. This is up from the 74 percent in 2000. Spring received 7 percent of the busiest season vote with the remaining 8 percent being divided fairly even among fall and winter.

Business owners were asked in 2000 to project how they felt sales would do in 2001, and 79 percent predicted a sales increase. According to this year's survey results, 56 percent were on the mark, reporting a sales increase in 2001 compared to 2000. The percentage of sales increase in 2001 was an estimated 12.68 percent over last year's sales. Twenty percent experienced an average decrease in sales of 12.36 percent in 2001. The remaining 24 percent cited no change in 2001.

The interesting test will be seen in the 2002 results. Eighty-one percent of 2001 business owners are projecting an increase in sales for 2002. Sixteen percent expect sales to remain the same and 3 percent anticipate a decrease in 2002. These scenarios may or may not hold true due to the unforeseeable events of September 2001.

Of those reporting a sales increase for 2001, 49 percent attributed the increase to marketing and advertising campaigns. Improved customer service (42 percent), technician proficiency (37 percent) and increased labor rates (35 percent) also gained recognition for their contributions to increased sales in 2001.

Increasing the services provided (31 percent) and using a management system (27 percent) are also areas to consider when looking to increase sales, according to survey respondents. Uncontrollable factors such as a better economy (18 percent) and weather conditions (6 percent) received citation. Six percent took the initiative to acquire a new major account, therefore increasing their sales. Twenty-one percent also checked other reasons for sales increases, including car sales, moving to a new location, better parts matrix, customer loyalty, working smarter and fleet repairs. Business owners were encouraged to cite all reasons for profit increases.

When comparing 2001 to 2000 in terms of profit, 61 percent of ASA mechanical shops surveyed noticed an increase, 19 percent found no change and 19 percent experienced a decrease in profit.

When asked to compare the customer base of 2000 to that of 2001, 58 percent noted an increase. Thirty-one percent noted no change within their customer base, while a disappointed 12 percent saw a decrease in their customer base.

Running consistent with the 64 average repair orders per week, 49 percent of business owners had an increase in repair orders during 2001. Thirty-two percent saw no change and 18 percent felt a decrease. This balances out the change from the 65 repair orders per week in 2000 to the 64 repair orders per week in 2001.

One of the other reasons given for a sales increase was a “fix-it-right-the-first-time” philosophy. Recently the question of the number of comebacks was added to the “How's Your Business?” survey. In 2000, there was an average of two comebacks per week. Well, in 2001 there was an average of 1.125 comebacks per week or 4.41 per month. Of the comebacks, slightly more than half (53 percent) were attributed to parts failure.

Service contracts, extended warranties and warranty repair have entered into the independent repair business world. When asked if they provided a warranty to their customers, 94 percent said they offer both a parts and labor warranty. Four percent offer only a parts warranty; 1 percent provide a labor warranty; and 1 percent offer no warranty at all.

Often consumers believe extended warranty repairs must be completed at dealerships; however, 86 percent of respondents said they service vehicles covered by an extended warranty.

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Customer Demographics

Customer demographics have remained constant since ASA began performing its annual business survey. Currently, 77 percent of all customers coming into a mechanical business are repeat customers. This is similar to the 79 percent reported as repeats in 2000. With such a large percentage of repeat business, it's essential for the shop to meet the expectations of its customer base and be aware when customers are disappointed or satisfied. Customer satisfaction surveys keep 42 percent of shops in tune with their customers, their public image and their own work force.

Of those customers coming through ASA mechanical business doors, 50 percent are women and 50 percent are men. For marketing purposes, the average customer base extends 25 miles.

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Marketing and Advertising

As stated earlier, marketing and advertising campaigns are the strongest motivators for increasing sales. These savvy business owners are looking for the greatest return on their $14,613 annual advertising budget investment. This is a slight increase from the $14,277 spent in 2000.

Ninety-three percent of business owners do some form of advertising to increase their customer base, name awareness or public image. Often owners have a tendency to diversify their advertising media.

Eighty-one percent of business owners use positive customer referrals and word-of-mouth as the preferred means of promoting their business. With such a large percentage leaning this direction, it's essential to provide the best customer service possible. The Yellow Pages is used by 63 percent of mechanical businesses.

Direct mail is the third element of advertising in the mix according to 47 percent of respondents. The Internet (27 percent), newspapers (24 percent), radio (21 percent) and neighborhood shoppers (15 percent) are also considered useful advertising media.

Branching out from “typical” methods, 13 percent of business owners cited event marketing, community involvement, church bulletins and sponsoring local sports teams as advertising options.

Currently, 21 percent of survey respondents offer customer “know-how” programs that are designed to provide basic information and tips to the consumer. These programs increase the public's awareness of vehicle maintenance along with promoting a positive public image of repair businesses.

Cable television (9 percent), broadcast television (4 percent) and billboards (4 percent) are the least likely advertising forms for mechanical businesses.

Internet sites are continuing to increase among mechanical repair businesses. Currently 51 percent of mechanical repair businesses have a Web site. That's a notable increase from 36 percent in 2000.

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Industry Issues

Issues having the Largest Impact on Business - Click here to enlarge graph.

The final section covered by the 2001 “How's Your Business?” survey pertains to industry issues. Respondents were asked to select the three top issues currently having the largest impact on their business. According to survey results, the issue having the largest effect on business is keeping up with technology (61 percent). ASA's Mechanical Division recently sponsored 10 technical classes at its Congress of Automotive Repair and Service (CARS) convention, covering such topics as hybrid vehicles, OBD II and future technologies.

Finding good technicians dropped from the No. 1 spot to the No. 2 spot by receiving a 47 percent response. ASA is supporting the SWEA bill that, if enacted, would provide a $15,000 tax credit to businesses that offer apprenticeship programs.

The third issue having the largest impact on business is repair information availability (39 percent). Robert L. Redding Jr., ASA's Washington, D.C., representative, and Bill Haas, ASA Mechanical Division manager, have testified numerous times before the EPA and U.S. Congress, addressing service information availability and its effects on the aftermarket. Additionally, John Francis Jr., a member of ASA's Mechanical Division Operations Committee, conducted information availability demonstrations on Capital Hill in July. (Read more about information availability in the feature article on page 24.)

Coming up a close fourth is industry image at 37 percent. Currently, ASA is co-sponsoring a public service announcement airing on PBS television stations regarding vehicle maintenance and consumer relationships with “trustworthy” repair facilities.

Fifty-four percent of business owners believe the public's image of automotive repair is improving; that's up 5 percent from last year. Survey results show 42 percent believe the industry's image has stayed the same; 5 percent see a decline.

Twenty-six percent of survey respondents cited training technicians as having a major impact on their business; retaining technicians is an issue for 21 percent.

Aftermarket parts (19 percent), regulatory compliance (17 percent) and increased competition (15 percent) are also areas that impact independent mechanical repair business owners.

Least of the worries (5 percent or less) are legislative issues, shop licensing and recycled parts. Legislative issues as a concern is down from 21 percent in 2000.

Shop licensing decreased from 6 percent in 2000. Reasons for such a decrease in concern may relate to decisions made in 2001 regarding shop licensing and the association's stance.

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