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The Impact of Political Events on the Auto Repair Business

Political events can affect businesses at many levels. Elections, regulations and legislation can all impact business. The impact can be positive or negative depending on the circumstances. Elections can generate economic activity during the campaign process and changes in elected officials can affect business conditions. Regulations can result in changes in the way business is conducted and legislation can impact business positively or negatively.

  1. Election Years – Every four years in the United States presidential elections are held. These election years will generate the most activity during the campaign process and potentially have the greatest impact on businesses when the election is concluded. Along with the presidential election – candidates also seek election to various positions at the federal, state and local level. Generally, if an incumbent or the party of the incumbent stays in office the status quo can be expected. If a challenger wins office – change can be expected. This can be positive or negative for any given business depending on the circumstances. The key is to be aware of the potential impact and be prepared for it.
  2. Regulations – Regulations can directly impact the automotive repair industry. For example the federal Department of Transportation requires that when tires are sold their serial numbers and the consumer they were sold to are reported. The penalties for not reporting in the event of a recall and a failure in which damage or injury occur can be significant. In California the state instituted a regulation requiring that an auto repair shop perform a tire inspection on any vehicle they work on. Many shops were already doing this as part of a standard safety inspection but ended up modifying their processes in order to perform this inspection separately. There are numerous regulations that affect the auto repair business. The most significant point to recognize concerning regulations is that they’re issued by government departments and they don’t go through the legislative process.
  3. Legislation – In our federal, state and local governments laws are proposed, debated and voted on. If proposed legislation becomes law it can have an impact on businesses and can be either positive or negative. A recent example of legislation that failed was the Keystone Pipeline that passed the house and senate but was vetoed by the president. If approved there would have been positive effects for many. However because there is no pipeline the raw materials for oil are transported by rail and truck to the refineries in Texas. There are many automotive repair shops that benefit significantly from this as they’re located on the route the trucks travel and they repair and maintain the vehicles. Legislation can be positive or negative in its impact on any given business. The key is to anticipate the impact of legislation and prepare accordingly.

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