In 2002 there are an estimated 78,034 general mechanical repair businesses. These mostly independent businesses employ an estimated 310,325 individuals who provide service and repair for greater than 200 million motor vehicles. This is up from the 61,455 general mechanical repair businesses and 223,074 employees in 1993. Currently, a projected total sales figure for general mechanical repair facilities in 2002 equals an ASA estimated $39.8 billion. This is nearly double the $22.8 billion in 1993.

These figures do not include the approximately 21,000 auto dealerships with service facilities that took in approximately $25.8 billion ($14.6 billion in labor and $11.2 billion in parts) in 2001, according to the National Automobile Dealership Association.

Shop Profile

In 1993, the question of number of service bays was posed to ASA's membership and 49 percent said they had at least six service bays. Over the past 10 years, this has continued to grow to an overall average of eight service bays in a business averaging 5,854 square feet in size. Business longevity (average age of 22 years) and family ties (90 percent family owned) are a large part of the independently (98 percent) owned repair businesses.

Taking an extra step to profile the market, ASA looked into market size of respondents in addition to annual sales. Just over one quarter (26 percent) come from city populations under 25,000. Another quarter (27 percent ) is in cities of 25,000 to 100,000. Large cities with populations of 100,001 to 500,000 people provided 24 percent of the responses and the remaining 23 percent originated from businesses in cities larger than 500,000.

Since 1993, independent mechanical repair businesses have increased their annual sales. In 1993, 7 percent of businesses had annual sales under $100,000. In 2002, only 1.4 percent cited annual sales under $100,000. Percentage movement continued within the $100,000 to $250,000 annual sales category. In 1993, 23 percent of the population earned between $100,000 to $250,000. This decreased to 12 percent in 2002. Thirty-seven percent of respondents placed their business in the $250,000 to $500,000 sales category in 1993. This has changed to 22 percent in 2002.

Here's the exciting area: in 1993 26 percent of the population earned between $500,000 and $1 million. This has increased to 42 percent in 2002. This trend continued through the remainder of the categories with 15 percent of 2002 businesses generating $1 million to $1.5 million. Three percent of the 2002 population selected the $1.5 million to $2 million. And the $2 million annual sales category is composed of 5 percent of the general mechanical repair businesses.

Since 1999 more than 83 percent of general repair mechanical businesses have had Internet access. This has increased to 86 percent for 2002 general mechanical business owners. The most common type of Internet access among the 2002 mechanical repair business was the 56K (55 percent). This is followed by direct subscriber line (DSL) (26 percent), cable (8 percent), 28K (6 percent) and other (3 percent).

Internet activities tend to be work related with 65 percent using the Internet to access repair information, 60 percent research products, 50 percent advertise their shop, 44 percent purchase tools and equipment and 43 percent order parts. News (32 percent), Web-based technical training (25 percent), entertainment (25 percent), transferring funds (23 percent) and discussion groups/chats (15 percent) rounded out the top 10 activities. Respondents were allowed to select all applicable activities, therefore producing results greater than 100 percent.

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Owner Profile

Like previous years, the majority of responses to the 2002 "How's Your Business?" survey were received from business owners (93 percent) who manage an average of one mechanical repair business. The remaining 7 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 47 and he or she comes to work with 26 years of experience. These elements have remained constant since the survey began in 1993.

Education among business owners is neither slight nor forgotten. Currently, 68 percent of business owners are ASE certified in at least one area. Forty-eight percent of owners are currently participating in Automotive Management Institute (AMI) courses. This has increased from the 32 percent participating in 1999. Twelve percent of mechanical business owners have received their Accredited Automotive Manager (AAM) designation.

In 2002, respondents were asked about their highest level of education in addition to ASE certification. The largest percentage of respondents, 38 percent, has a college education. This is followed by 31 percent with a high school education and 26 percent holding a vocational or trade school degree. The remaining 5 percent of mechanical business owners have completed some graduate or post-college study.

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 promoting a highly technical and ever-changing field. Currently 28 percent of ASA shop respondents are participating in a secondary or post-secondary educational advisory committee. This is up from 24 percent in 2001. And 33 percent are participating in a school-to-work/apprentice program.

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Staff Profile

Employee Salaries - Click here to enlarge graph.

With businesses growing in size and annual sales, the necessity for technicians, management, service writers and office staff has also increased. In 1993 nearly 50 percent of mechanical businesses had between three and four technicians. In 1998, four had become the industry average. This year, the average increased to five technicians (3.4 journeymen technicians and 1.7 entry-level technicians). Of the five technicians, three are ASE certified in at least one category. This number remains consistent with the survey results from 1999 to 2001.

In addition to five technicians, the average mechanical business also employs 1.5 managers, 1.4 service writers and 1.4 office personnel. Multi-purpose job descriptions explain the employee fractions. Often, a service writer will also provide office support just as managers provide service writer support.

Since the first "How's Your Business?" survey in 1993, ASE technician certification has been a priority among business owners. In 1993, 34 percent of business owners reported having between 90 percent and 100 percent of their technicians ASE certified. In 1997 this had increased to 64 percent. Since 1999, an average of three of the 3.4 technicians are ASE certified.

In addition to performing service and repair for nearly 70 percent of off-warranty vehicles, technicians also involve themselves in 29 hours of updated education annually.

The majority of educational funding continues to come from business owners. According to survey results, 82 percent of employers fund the continuing education of their technicians. Some 14 percent of businesses ask for a partnership between business and employee for continuing education. The remaining 3 percent require their employees to solely finance their continuing education. In relation to the funding, 76 percent of business owners allow their technicians to attend training during the workday.

The top five sources of technician education include parts manufacturers (70 percent), association seminars (63 percent), industry seminars (47 percent), trade magazines (45 percent) and equipment manufacturers (38 percent). In-house programs (30 percent), jobbers (29 percent), community college and technical schools (28 percent) and independent training providers (28 percent) provide a strong portion of technical education. Original equipment manufacturer (OEM) training is being received by 17 percent of technicians.

Eighteen percent of ASA's mechanical members attend the Congress of Automotive Repair and Service (CARS) and 10 percent of businesses use CARS as a source of training for technicians. Web-based training is continuing to provide a source of training for 7 percent of technicians. ASA is hoping to increase that percentage through its sponsorship of Web-based training courses, such as those offered by Melior Inc.

Even during the economic downturn, compensation for mechanical business employees increased in 2002. Entry-level technician salaries increased to $23,981. Journeymen technicians generate an annual income of approximately $45,112. This year, service writers have an average salary of $39,812. Managers earn an average salary of $53,713. An office staff category was added to the survey this year. Average salary for office staff is $26,781.

Respondents were also asked how technicians were compensated and were allowed to check all that apply, so percentages are greater than 100. According to the results, 47 percent of technicians receive an hourly wage; up from the 39 percent in 2001. Twenty-one percent of technicians are paid a salary. Thirty-eight percent of technicians are paid a flat rate and 14 percent are paid a percentage of the labor rate. Commission gained ground this year with 19 percent of technicians receiving an hourly wage plus commission, and 8 percent receiving a salary wage plus commission.

Employee Benefits - Click here to enlarge graph.

Employee benefits continue to be a big part of the independent mechanical repair sector. Standard benefits provided to the majority of employees include paid vacations (92 percent), uniforms (93 percent), paid holidays (85 percent), training and seminars (87 percent), and medical insurance (77 percent). Other business owners go even further by offering a yearly bonus (48 percent), management training (44 percent), 401(k)/retirement benefits (43 percent), life insurance (32 percent) and dental insurance (26 percent).

With the expensive cost of tools and their necessity as technology changes, 20 percent of mechanical business owners also provide tool benefits. Eighteen percent also provide eye care insurance.

Business owners were asked in which category of mechanical business employees do they currently have the most need. Twenty-five percent do not have a need for additional employees. Of those citing a need, 47 percent selected journeyman technicians, 15 percent selected entry-level technicians and 10 percent selected service writers. The remaining 3 percent are keen for management, administration or office staff.

Perhaps even prior to a June 1960 article in The Independent Garageman magazine titled "Skilled Help Called Community Problem," businesses have been discussing the technician shortage. From the 2002 survey, an average of one technician was reported to have left and one technician was hired. When the responses were grouped into categories to give a better picture of technician retention, 47 percent saw no technicians leave and 40 percent hired no technicians. Forty percent saw one to two technicians leave while 46 percent hired between one and two technicians. Eleven percent of businesses had between three and four technicians leave while 9 percent hired between three and four technicians. The remaining 2 percent had overwhelming turnover of five or more technicians while 4 percent hired five or more technicians.

Since 1993, referrals or word of mouth have remained the primary source for finding new technicians, according to 57 percent of respondents. Sixteen percent of businesses have located technicians from other businesses. Thirteen percent are coming from vocational schools and 11 percent are from classified advertisements.

Untapped areas remain in apprenticeship (2 percent), the Internet (2 percent) and local high schools (1 percent).

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Sales

Sales - Click here to enlarge graph.

Ten years ago, the amount of the average repair ticket was placed into categories. In 1993, 69 percent of repair tickets were between $100 and $300. In 1995, 36 percent of tickets were up to $200 and 36 percent ranged between $200 and $400. Average ticket amount continues to increase. This year, the average ticket is estimated to be $331. This is up from $323 in 2001 and $318 in 2000. Of the average ticket, 49 percent is for parts and 48 percent is labor. The remaining few percentage points are incidentals.

According to survey respondents, an average of 249 repair orders are completed monthly by mechanical repair businesses - approximately 57 repairs per week.

According to 56 percent of respondents, Monday is considered the busiest day of the week. This is followed by Friday (22 percent), Tuesday (8 percent), Thursday (7 percent), Wednesday (5 percent) and Saturday (2 percent).

Summer is the busiest season for the majority of shops (68 percent). And 23 percent indicated their business was steady year round regardless of season. Fall, spring and winter received the remaining 9 percent (3 percent each). The "all year round" category was new to the survey this year, which accounted for the 16 percent decrease in the summer category this year. Last year 84 percent reported summer as their busiest season.

The effects of the economy have been felt by mechanical repair businesses. Each year, the survey asks respondents to compare sales of the previous year to sales of the current year. The percentage of businesses with a decrease in sales was larger than it has been since the survey's inception. According to survey results, 32 percent saw a decrease in sales in 2002 compared to 2001. This is up from 20 percent in 2001, 4 percent in 2000 and 15 percent in 1999. Ten years ago, 23 percent cited a decrease in sales compared to the previous year.

Fortunately, 46 percent of businesses cited an increase in sales from 2001 to 2002. This is down slightly from the 56 percent in 2001 and the 79 percent in 2000. Twenty-two percent noted no change in sales for 2002 compared to 2001.

Of those noting an increase in sales from 2001 to 2002, a 13 percent increase is expected. Of the 32 percent expecting a decrease in annual sales, a 14 percent decrease is expected.

Of those reporting a sales increase for 2002, 50 percent attributed the increase to marketing and advertising campaigns. Improved customer service (42 percent), technician proficiency (38 percent) and increased labor rates (32 percent) also gained recognition for their contributions to increased sales in 2002.

Increasing the services provided (25 percent) and using a management system (16 percent) are also areas to consider when looking to increase sales, according to survey respondents. Seven percent took the initiative to acquire a new major account, therefore increasing their businesses' sales. Uncontrollable factors such as a better economy (13 percent) and weather conditions (2 percent) received citation. Sixteen percent also checked other reasons for sales increases, which included moving to a new location, better parts matrix, customer loyalty, community involvement, working smarter and fleet repairs. Business owners were encouraged to cite all reasons for profit increases.

Businesses were also asked to relate the number of jobs, number of customers and amount of profit compared to the previous year. The responses ran parallel with those of sales. Approximately 52 percent saw an increase in profit. Forty-seven percent noted an increase in customers, and 42 percent had an increase in number of jobs. Decreases in profits were experienced by 28 percent, 19 percent of businesses experienced a decrease in customers, and 28 percent noted a decrease in the number of jobs performed. The remaining percentages cited no change within the various categories.

The outlook for sales in 2003 is bright according to 80 percent of respondents who are expecting an increase. Seventeen percent are going to hold with no change and 3 percent expect a sales decrease in 2003.

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, 95 percent said they offer both a parts and labor warranty. Two percent offer only a parts warranty. One percent provides a labor warranty, and the remaining 2 percent offer no warranty at all.

Often consumers believe extended warranty repairs can only be completed at a dealership. According to survey results, 88 percent of businesses service vehicles covered by an extended warranty. That's up slightly from 86 percent in 2001.

Of the 249 repair orders per month, mechanical repair businesses experience five comebacks a month (2 percent). Of those five repairs, 55 percent are attributed to parts failure.

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Customer Demographics

Customer demographics have remained constant since ASA began performing its annual "How's Your Business?" survey. Currently, 80 percent of all customers coming into a mechanical business are repeat customers. This is similar to the 79 percent reported as repeats in 2000 and the 75 percent reported in 1996. With such a large percentage of a repeat business, it's essential for shops to meet the expectations of their customer base and be aware when customers are disappointed or elated. Customer satisfaction surveys keep 43 percent of shops in tune with their customers, their public image and their own work force.

In 2002, women have become the majority in the customer category. Fifty-three percent of customers are women. Since 1996 there has been an even percentage of male and female customers. For marketing purposes, the average customer base continues to extend 25 miles.

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Marketing and Advertising

Over time, the value of marketing and advertising for mechanical repair businesses has increased. Currently, 95 percent of businesses perform some form of advertising, up from the 75 percent who advertised in 1993.

In 1996, the "How's Your Business?" survey asked business owners how much they spent on advertising. The 1996 average was $12,701, which has increased to $17,641 in 2002.

Eighty-three percent of business owners use positive customer referrals and word of mouth as the best means of promoting their business. In 1993, the Yellow Pages were the primary source of advertising. Eighty percent still use the Yellow Pages.

Direct mail is the third element of advertising in the mix, according to 54 percent of respondents. Like Yellow Pages, direct mail has, over the past 10 years, been a majority choice for advertising. A big "wow" goes to the Internet. This year, 39 percent of respondents are using the Internet to advertise. This is a large increase from the 10 percent in 1996. Newspaper (34 percent), radio (28 percent) and the "neighborhood shopper" (18 percent) are also considered useful advertising media.

Branching outside of the typical advertising box, other forms of advertising such as event marketing, community involvement, church bulletins and local sports teams were cited to work best by 12 percent of business owners.

Currently, 20 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 (13 percent) and broadcast television (6 percent) showed an increase of a few percentage points each for their use as an advertising medium by mechanical repair businesses. Billboards continue to be the least likely form of advertising, turning in a 4 percent usage.

Internet sites are continuing to increase among mechanical repair businesses. Currently, 52 percent of mechanical repair businesses have a Web site. That's a notable increase from the 36 percent who had Web sites in 2000.

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Industry Issues

The final section covered in the 2002 "How's Your Business?" survey pertains to industry issues. Respondents were asked to select the top five 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 (60 percent). Coming in second is repair information availability (45 percent). We'll watch for a decrease here due to the passage of the repair information availability agreement spearheaded by ASA.

Recruiting good technicians holds the third spot at 40 percent, a decrease from 47 percent last year. The fourth issue is industry image (35 percent). Although 54 percent of business owners believe the image is improving, 39 percent feel it is staying the same and 8 percent noted a decrease.

Technical training rounded out the top five issues at 32 percent, up from the 26 percent reported in 2001. Retaining technicians was cited by 20 percent of business owners. AutoInc. often has management-related articles that may serve as tools in this area. The ASA Information Center also contains hundreds of business management articles that may help in the technician motivation and retention areas.

Aftermarket parts (18 percent), regulatory compliance (15 percent) and increased competition (14 percent) are also issues worth taking note of that impact independent mechanical repair business owners. Legislative issues (10 percent) doubled in importance in 2002, although legislative issues as a concern is down from 21 percent in 2000. Shop licensing grew from 1 percent in 2001 to 5 percent in 2002.

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