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Changes in Consumer Vehicle Usage and the Impact on Automotive Repair

 Many significant changes in the environment in which we live have brought about changes in consumer vehicle usage and thus the automotive repair business. The pandemic, changes in retail shopping, inflation and recessionary trends and increased reliance on delivery are resulting changes in vehicle usage. Decreased business volume coupled with increased operating costs have resulted in challenging circumstances for the automotive repair industry. These conditions are a mix of temporary circumstances and long-term trends. Understanding the nature of our economic situation can assist in dealing with present conditions as well as plan for the future. Following are factors that contribute to the current business environment:

  1. The Pandemic Impact – The impact of the pandemic on people’s behavior cannot be overstated. From government-imposed shutdowns to self-imposed isolation people curtailed their driving habits significantly. This resulted in less miles driven – thus less wear on vehicles – thus less maintenance and repair requirements. As the pandemic transitions to an endemic (regularly found in the environment) condition the habits that people formed are slow to return to where they were. Some of the behavioral trends will most likely become an embedded part of our culture. Thus, there will be less demand for auto repair among consumers.
  2. Recessionary Trends and Inflation – The imposed shutdowns and subsequent supply chain disruptions brought about government as well as private infusion of money into the economy. This resulted in a massive increase in demand and coupled with the reduction in supply – high inflation rates were brought about. To counter the inflationary trends the Federal Reserve Bank enacted a series of interest rate hikes in order to reduce demand. This will continue until the desired rate of inflation is realized. Business costs have increased and will likely continue to increase for the foreseeable future.
  3. Increased Shopping and Delivery – Consumer shopping trends have moved to a much higher rate of purchasing for delivery. Online shopping has been steadily increasing for several years resulting in fewer and fewer brick and mortar retail shopping establishments. The pandemic as well as the current cost of travel accelerated this trend resulting in more and more purchasing for delivery. For the automotive repair industry this means a decrease in consumer business and an increase in commercial business (fleet). Profit margins are generally less on fleet than retail. But the difference can be offset with greater volume.

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