Business Profile || Owner Profile || Staff Profile || Sales ||
Customer Profile || Marketing and Advertising || Industry Issues

For 2003 there are an estimated 79,711 independent general mechanical repair businesses. These independent businesses employ an estimated 318,154 individuals who provide service and repair for greater than 205 million motor vehicles. This estimate is based on the number of businesses noting a positive and negative change in overall profits from 2003 to 2002.

Currently, a projected total sales figure for general mechanical repair facilities in 2003 equals an ASA-estimated $34 billion. This figure is estimated from the Bureau of Economic Analysis figures on service annual sales and only reflects the revenue from general mechanical repair businesses. If you add in specialty repair facilities, oil change facilities and transmission shops, the figure moves closer to $45 billion.

These figures do not include the approximate 21,000 auto dealerships with service facilities that took in approximately $28 billion ($16 billion in labor and $12 billion in parts) in 2002, according to the National Automobile Dealership Association.

Business Profile

The number of bays and size of the mechanical repair facilities has remained fairly constant the past five years. According to the 2003 results, the average business has seven bays and is nearly 5,900 square feet in size. This year, the number of bays was also broken into categories. Although the average is seven bays, 18 percent have one to three bays and 38 percent have four to six bays. Twenty-two percent are in the seven- to nine-bay range and 14 percent have 10 to 12 bays. Eight percent are 13-plus bays facilities.

According to survey results, the mechanical repair industry is a secure one. The average facility has been in business 23 years and 89 percent of mechanical repair facilities are family owned. The amount of mechanical repair businesses owned by a consolidator has a notable increase from 2002 to 2003 from 1.4 percent to 4.8 percent.

Taking an extra step to profile the market, ASA looked into the market size of respondents in addition to annual sales. Over one quarter (27 percent) of the general repair business market can be found in cities with populations under 25,000. Thirty-one percent of respondents' businesses are located in cities of 25,000 to 100,000 people. Large cities with populations of 100,001 - 500,000 people provided 28 percent of the responses and the remaining 14 percent originated from businesses in cities larger than 500,000.

When comparing the percentage of business by population size to the 2002 How's Your Business survey, there is a notable change in the percentages with reductions in the under 10,000 and over 500,000 categories.

According to the latest survey results, annual sales percentages changed in 2002 compared to 2001. The size of the smallest annual sales group increased slightly more than 1 percent, with 2.5 percent reporting annual sales under $100,000 in 2002. This is an increase of 1 percent over the previous year's 1.4 percent. The percentage of businesses with sales of $100,000-$250,000 decreased from 12.2 percent in 2001 to 10.7 percent in 2002. Perhaps some of the shift is in relationship to increased sales, as 25.8 percent of businesses reported annual sales between $250,000-$500,000 for 2002, up 4.1 percent from 2001.

Nearly a quarter (24.7 percent) of businesses reported annual sales for 2002 in the $500,000-$750,000 category, up 1.2 percent from 2001 sales. Businesses with sales between $750,000-$1 million remained constant at 18 percent. The largest change in annual sales occurred in the $1 million-$1.5 million category with a drop of 4.5 percent from 15.25 percent in 2001 to 10.71 percent in 2002. There was an increase of 1.31 percent for those having annual sales between $1.5-$2.0 million to 3.9 percent. The remaining 3.9 percent of mechanical businesses are in the $2.0 million-$4.0 million category.

Access to the Internet at repair facilities continues to increase from 86 percent in 2002 to 88 percent in 2003. The type of access has shown some change with a reduction in the percentage of businesses using 56K dial-up access, dropping from 55 percent in 2002 to 35 percent in 2003. The most popular form of Internet access is DSL, increasing from 26 percent in 2002 to 43 percent in 2003. Cable (12 percent), 28K (6 percent) and ISDN (4 percent) make up the remaining access percentages.

Communication and information are key elements of the Internet. Seventy-three percent of mechanical business owners use the Internet for e-mail and 72 percent are accessing repair information. That's up from 65 percent in 2002. The Internet is also used for product research (64 percent), ordering parts (53 percent) and purchasing tools and equipment (46 percent). Forty percent use the Internet to advertise their business and gather industry news. This relates to the 49 percent who cite having a Web site or Web page.

Web-based training is occurring among 31 percent of business owners. The remaining Internet activities include transferring funds (27 percent), entertainment (21 percent), chat/discussions (20 percent), tracking packages (19 percent) and customer retention (13 percent). Respondents were allowed to select all applicable activities, therefore producing greater than 100 percent.

In a follow-up to the access to repair information, this year's survey asked business owners if they had workstations with Internet access available in the service bays. Thirty-eight percent responded "yes."

A trend that is occurring in the independent sector is being open Monday through Friday and Saturday. Currently 100 percent are open during the workweek and about a third (32 percent) are open Saturday. The opening on Saturdays may be a half day, a full day or by appointment.

Monday is cited by 33 percent of respondents to be the busiest day of the week. Running a close second is "all week," cited by 31 percent. Friday led a distant third at 12 percent. Although the other days were in the single digits, some respondents selected more than one day but not all week.

Summer continues to be cited as the busiest season by 59 percent of those surveyed. Although respondents were asked to select only one season, many respondents selected two or three seasons. Thirty-one percent of respondents are busy all year.

Back to Top

Owner Profile

Similar to previous years, the majority of responses to the 2003 How's Your Business survey were business owners (94 percent) who manage an average of 1.28 mechanical repair businesses. The number of facilities owned or managed is beginning to show an increase from one to multiple. Although the data is limited at present, it will be an area to note in the future. The remaining six percent of respondents 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 he or she comes to work with 27 years of experience. With the question of an industry shortage, the 2003 How's Your Business placed the age of business owners and industry experience into categories.

As for owner age, 5 percent are between 25-34, 27 percent are between 35-44, 43 percent are between 45-54, 20 percent are between 55-64, and 5 percent are 65 or older. Although the age distribution is fairly even, it is necessary to take note of possible retirement of 20 percent to 25 percent of the ownership population within the next 10 to 15 years and the large percentage of owners between 45 and 54.

As far as industry experience goes, 8 percent of owners have 10 years or less experience, 21 percent have between 11 and 20 years, 39 percent have between 21 and 30 years, 26 percent have between 31 and 40 years, and 6 percent have 41 or more years of experience.

These statistics serve as a reminder that today's technicians are tomorrow's business owners and it is necessary for the industry to prepare technicians for the role.

ASE certification among business owners saw a 2 percent dip in 2003 with 66 percent recording certification in 2003. A little over a third of business owners (37 percent) are continuing their management training by taking Automotive Management Institute (AMI) courses within the past 12 months. Last year, 48 percent of owners responded to taking AMI courses. This may seem like a large difference but the 12-month time period was added in 2003, accounting for some of the variation in the response. Consistent with last year, 12 percent of mechanical business owners have received their Accredited Automotive Manager (AAM) designation.

Mechanical business owners come from various educational backgrounds. Thirty-three percent of the owners are high school graduates. Twenty-one percent received training from a vocational or trade school. Forty-one percent of owners have a college education and 4 percent have a post-college education.

Time deficiency is affecting mechanical business owners' ability to participate in industry activities. This year's survey saw a 7 percent reduction in those participating on any secondary or post-secondary educational advisory committee; down to 21 percent.

Back to Top

Staff Profile

Benefits Provided to Employees - Click here to enlarge graph.

The staff profile of mechanical businesses has remained fairly constant the past few years. One of the complicating elements in determining the entire staff number is the ability of the business owner and the remaining staff to multitask. According to the 2003 How's Your Business survey, an average business has 1.3 apprentice technicians (less than 1 year experience), 1.3 entry-level technicians (1-5 years experience), 3.2 experienced technicians (5-plus years experience), 1.5 service writers, 1.5 office staff members and 1.4 managers. The inclusion of partial numbers to the whole accounts for the multitasking of business employees and the business owner.

During data entry, comments regarding an owner also performing the tasks of a manager and a service writer were noted.

ASE certification among technicians changed a bit this year from last with three technicians per facility having ASA certification, down from 3.3. This number may also include certification of the owner or manager who serves in a technician capacity on a limited basis.

To perform service and repair on nearly 70 percent of the off-warranty vehicles, technicians and other mechanical staff need to incorporate training into their schedules. Entry-level technicians receive an average of 29 hours of training annually while experienced technicians receive an average of 34 hours of training. Management staff is acquiring advanced learning at 31 hours a year.

The majority of educational funding continues to come from business owners. According to the 2003 How's Your Business results, 75 percent of employers fund the continuing education of their technicians. This is down from 82 percent in 2002. Nineteen percent of businesses ask for a partnership between business and employee for continuing education funding. Two percent of business owners require the technician to fund his or her own training. The remaining 4 percent supply no training.

This year, the survey asked how much was spent on training the staff. Owners reported an average of $869 was spent per entry-level technician, $1,271 was spent on experienced technicians and $1,802 on managers.

Seventy-nine percent of business owners allow their technicians to attend training during the workday.

Similar to years past, technicians garner a large portion of their training from parts manufacturers (70 percent), association seminars (63 percent), and industry seminars (54 percent). Equipment manufacturers (47 percent) and trade magazines (43 percent) round out the top five sources of technician training.

Jobbers are lending their training tips to 38 percent of technicians, and 32 percent of business owners offer in-house training programs. Community colleges and technical schools are being used by 29 percent of the population. Both original equipment manufacturer (OEM) training and Web-based training saw an increase from 2002 to 2003. OEM training went from 18 percent to 23 percent and Web-based training grew from 8 percent to 12 percent. Here, respondents were allowed to select all aspects of training that apply, thus creating a response total greater than 100 percent.

Although compensation of mechanical business staff members grew, the level was slight due to economic times. Apprentice pay averaged $21,034 annually. Entry-level technician salaries increased to $27,800 from $23,981 for 2002. In 2003, the apprentice position was added, creating a more accurate definition of entry-level and accounting for part of the increase in salary. Experienced technicians are now earning $47,948 annually. This is up from $45,111 in 2002. The average office staff member was paid $25,013 this year. Service writers earn an average salary of $39,382. Managers reported an average salary of $56,143.

An element to the salary section worth noting is that often the business owner acts as a manager and does not record his or her salary.

Flat rate is becoming the most popular form of payment for technicians according to survey results. Thirty-six percent of technicians receive a flat rate. This is followed by 29 percent receiving hourly wages and 18 percent receiving a percentage of hourly plus commission wages.

Employee benefits continue to be a big part of the independent mechanical repair sector. Standard benefits provided to employees include paid vacations (92 percent), uniforms (88 percent), paid holidays (84 percent), technical training (88 percent), and medical insurance (75 percent). Other business owners go even further by offering a yearly bonus (42 percent), 401(k)/simple IRA (38 percent), management training (32 percent), life insurance (26 percent), dental insurance (25 percent), eye care (17 percent), cafeteria 125 (16 percent) and tools (13 percent).

According to survey results, 52 percent of mechanical business owners are projecting they will have the most need for experienced technicians during the next year. This is followed by 24 percent having a full staff and no need for additional employees. Entry-level technicians will be needed by 12 percent of the population. Nine percent of facilities noted a need for service writers in the next year. The remaining 3 percent are looking for office staff and management.

A note here is that although businesses were asked to select only one option, some respondents selected more than one type.

Although 52 percent of businesses expect to have a need for experienced technicians in 2004, this could account for business expansion, position promotion and retirement along with a possible deficit in experienced technicians.

Questions to help clarify the need for technicians are ones of technicians promoted, technicians leaving and technicians hired within the previous year. The 2003 results showed one technician (.7) was promoted, one technician (.7) left and one technician (.8) was hired. From this it is possible to see the movement of technicians along with the desire of business owners to increase their staff size.

An effect of the lessened economy, increased unemployment and low interest rates for vehicles are elements contributing to a reduction in the amount of staff leaving and being hired compared to 2002 results. The numbers for 2003 were rounded up to reach a whole technician while the numbers in 2002 were not rounded.

The primary source for locating new technicians still comes from referrals and word of mouth (61 percent). Classified advertising saw a rise of 10 percent to 21 percent this year. Vocational schools as a source of technicians dropped from 13 percent in 2002 to 8 percent in 2003. Six percent of new hires are attracted from other businesses and 3 percent come from apprenticeship and industry programs. Infrequently used sources of technician recruitment include school to work (2 percent), the Internet (1 percent) and local high school recruits (1 percent).

Back to Top

Sales

Gross Sales - Click here to enlarge graph.

For the 2003 How's Your Business survey, respondents were asked to give their average ticket price in 2002. The results showed a reduction from $331 in 2001 for the 2002 survey to $305.75 in 2002 for the 2003 survey.

placing the average ticket into categories, it is a bit easier to see where the majority of respondents' repair order amounts lie. Two percent of businesses reported having an average ticket up to $100. Twenty-three percent recorded an average ticket from $101-$200. The largest percentage (37 percent) reported an average ticket from $201-$300. Although $305.75 is the average, 26 percent had repair orders from $301-$400. Six percent cited a repair order average from $401-$500. Getting higher, 2 percent acknowledged an average ticket from $501-$600 and 1 percent averaged $601-$700. The remaining 3 percent have repair orders averaging $700 or more.

The average repair order is broken down into 47 percent parts and 53 percent labor. Overall, a business uses 30 percent OEM parts and 70 percent aftermarket parts. The use of recycled parts was less than 1 percent.

Similar to last year's results, an average of 250 repair orders were completed monthly by mechanical repair businesses. Looking at this in categories adds clarity to the number. One quarter of businesses have between one and 100 repairs monthly. Thirty-six percent have from 101-200 repairs monthly. There are 201-300 repair orders completed monthly by 17 percent and 12 percent report 301-400 repair orders. Four percent of businesses completed 401-500 repair orders. A large number of repair orders completed monthly, 501-1,000, was noted by 4 percent. And finally, 3 percent of businesses averaged more than 1,000 repair orders monthly. The total is greater than 100 due to rounding.

The lackluster economy is still affecting the sales and repair orders of mechanical businesses. The 2003 How's Your Business survey asked business owners to compare sales in 2002 to 2003. Forty-eight percent cited an increase averaging 14.5 percent in 2003. Twenty-four percent found no change from the sales in 2002 and 28 percent felt a decrease of an average of 13 percent in 2003.

The top three reasons for a sales increase included customer service (55 percent), marketing and advertising (42 percent), and technician proficiency (39 percent). Services provided (36 percent) and labor rates (27 percent) round out the top five.

Percent of parts profit and use of a management system both received 23 percent of the respondents' attribution to increased sales. Closing out the reasons for increased sales are weather conditions (9 percent) and acquiring new accounts (7 percent).

The survey also collected reasons from the 28 percent who saw a 13 percent decrease. A strong voice of 90 percent cited economic conditions. All other reasons trailed a great distance. Technician proficiency was cited by 17 percent. Weather conditions (14 percent), loss of a major account (10 percent), marketing/advertising (9 percent), percent of parts profit (8 percent), use of a management system (5 percent) and customer service (3 percent) round out the reasons for a sales decrease.

Businesses were asked to select areas where the sales increase occurred. Fifty-eight percent noted an increase in profit, 56 percent saw growth in their customer base and 47 percent had an increase in monthly repair orders. Decreases in profits were experienced by 24 percent. Sixteen percent cited a decrease in customers. And 25 percent had a decrease in monthly repair orders.

The outlook for sales in 2004 is projected to be on the positive side for 85 percent of the shop owners. This is up from 80 percent expecting better times in 2003. Thirteen percent are planning to hold steady in 2004 and 2 percent have expectations of a sales decrease in 2004.

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, 100 percent of business owners indicated they offer a warranty. Ninety-six percent offer a warranty on both parts and labor. Two percent offer just a parts warranty, and 2 percent offer a labor-only warranty. With such a large percentage of businesses offering warranties, ASA membership continues to stand above the rest in the quality of repairs provided to consumers.

Often consumers believe extended warranty repairs can only be completed at a dealership. Well, say it isn't so. According to survey results, 88 percent of businesses service vehicles covered by an extended warranty.

Although 88 percent are repairing vehicles under an extended warranty, the offering of such a product still belongs to the dealership. A slight 6 percent of independent mechanical shop owners are currently selling an extended warranty to their customer base.

With an average of 250 repair orders per month, six result in a customer comeback. Of those six, four comebacks were attributed to defective parts.

Back to Top

Customer Profile

This year's customer base resembles those of past years. Currently, 81 percent of mechanical business customers are repeat customers. This speaks to the loyalty of established customers and the need for a successful business to focus on strong customer service and relations.

A way of remaining in contact with customers after the repair is the use of customer satisfaction surveys. Presently, 40 percent of businesses perform satisfaction surveys.

The percentage of women requesting vehicle service and repair retained a slight majority (52 percent).

Both the type of customer and the distance a customer travels are important aspects in creating a successful marketing plan. According to survey results, the average repair facility's customer base extends 19 miles.

Back to Top

Marketing and Advertising

As noted earlier, marketing and advertising continue to be a source of increased sales. Currently, 91 percent of businesses perform some form of advertising. Top advertising media includes the Yellow Pages (85 percent), word of mouth (79 percent), direct mail (54 percent) and the Internet (40 percent).

Community involvement was recognized by 38 percent of respondents as a form of advertising in which they participated. This was followed by newspaper (30 percent), radio (23 percent) and advertising in a church bulletin (19 percent). The church bulletin option was added this year due to a large number of respondents writing it in as an option in previous years.

Using a neighborhood shopper (17 percent), cable television (11 percent), broadcast television (5 percent) and billboards (4 percent) finish out the options for advertising.

This year saw a reduction in facilities involved in "customer know how" programs from 20 percent in 2002 to 16 percent in 2003. These programs continue to provide education to consumers, enhance the public's perception of auto repair and increase an individual's customer base.

During tough economic times, businesses have a propensity to cut advertising budgets. This action is often counter-intuitive to their business goals. Mechanical business owners presented an average advertising budget of $17,170 for 2003. This is down a bit from $17,641 in 2002.

Back to Top

Industry Issues

This year's How's Your Business survey took a different angle in determining what issues currently have the largest impact on the independent repair industry.

largest percentage of business owners and managers, 83 percent, cited the issue of keeping up with technology as having a strong impact on their business. As vehicles continue to progress from gasoline combustible engines to hybrid combinations and hydrogen powered fuel cells, this issue will continue to have a strong impact on the industry.

One of the accomplishments of 2002 was the successfully implemented agreement between vehicle manufacturers and ASA to provide the same service repair information to the independent repair sector as was being supplied to dealership repair facilities. According to survey results, 73 percent of those responding cited repair information availability as having a strong impact on their business.

Parts profitability followed a close third at 69 percent citing a strong impact on their business. Retaining technicians, technician training and the industry's image all received 62 percent for strong impact. Also indicating strong impact were aftermarket parts availability (54 percent) and recruiting technicians (52 percent).

Issues holding to the middle of the road on their impact include regulatory compliance (55 percent average impact), legislative issues (50 percent average impact), shop licensing (45 percent) and increased competition (45 percent).

The issue selected the most often for having a weak impact on the industry was recycled parts quality (48 percent). Remember that on average less than 1 percent of parts used in repair are recycled.

Going along with the 62 percent who cited industry image as having a strong impact on their business, 48 percent noted that the public's image of automotive repair is improving. Forty-three percent report that the public's image is staying the same. The remaining 8 percent feel the public's image of automotive repair is declining.

Back to Top

RATE THIS ARTICLE What do you think of this article? Your input will help AutoInc. develop additional articles on this subject. Share your thoughts! Your name Your e-mail address

MOST ACCESSED ARTICLES Fuel Injection Service, Not Just Cleaning The Art of Extraction EGR Systems: Operation and Diagnosis Proactive Target Marketing:_Rethinking Your Business Strategy Engine Performance: HO2S Diagnostics MOST E-MAILED ARTICLES Developing Employee Potential How Critical Thinking Can Help Your Business How to Diagnose the Ford Glow Plug What to Look for When Shopping for the Right Shop Management Software Putting a Price Tag on Complaints

AutoInc. Web Site | ASA Web Site | Insurance Regulations: State vs. Federal Debate Continues | "How's Your Business?" ASA's Annual Survey Results | CARS 2003 Recap | Thinking of Rehiring a Technician Who Worked for You in the Past? | Guest Editorial | Tech to Tech | Tech Tips | Shop Profile | Net Worth | Stat Corner | Chairman's Message