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3 Factors Affecting Auto Body Repair Shops Nationwide

3 Factors Affecting Auto Body Repair Shops Nationwide

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The automotive industry is a significant contributor to our nations’ economy. Likewise, auto body repair shops keep America driving and commuting to work daily. Lately, however, there have been several changes across the automotive industry that negatively impact the best Syracuse auto body shop and across the industry.

Energy Efficient Vehicles and Infrastructure Problems

Energy-efficient vehicles are being churned out more than ever before. While that's great for the average consumer and our environment, it has some pretty significant affects on other parts of the economy. The National Highway Trust Fund is about to run out of money.

This fund is what the nation uses to pay for repairs to roads, bridges, and highways across the U.S. Because a large part of it is funded by gas taxes, less money is being collected because energy-efficient vehicles have been made more affordable and available. Our roads continue to deteriorate, and people drive less in an effort to avoid traffic and pollution. Of course, this ends up affecting body shops. When fewer people drive, fewer cars need fixing.

New Vehicle Features

Energy-efficient and newer vehicles operate on complex computer and battery systems. Gone are the days of popping open the hood and simply replacing or rebuilding a part. Nowadays, vehicles are monitored by a computer diagnostics system that controls everything from gear-switching to back up cameras. If something goes wrong, an auto body shop employee has to be one part computer tech and two parts mechanic. Obviously, this creates a steep learning curve for some businesses. Hybrid cars need specialized knowledge and special parts, which body shops will have to keep up with if they want to succeed.

People Are Buying New Cars

Over the past two years, the auto sales industry had the highest figures in six years. People are buying new cars at an increasing rate, which has had a negative effect on the repair industry. Analysts have remarked that one reason for the slow growth of the repair industry is because people who bought new cars in the past two years aren't likely to need any repairs. Maintenance shops only grew an average of 1.7% in sales in 2013, while dealer sales increased 11.8%.

These three reasons only touch the surface of a complex, national trend. Like any business, it is important for the auto repair industry to be innovative. Strategic foresight requires experience with old ways and informed participation in the new technology coming to market.

Sources:

http://www.forbes.com/sites/sageworks/2014/01/26/auto-repair-shops-financial-analysis/

https://www.franchisehelp.com/industry-reports/automotive-franchise-industry-report/

http://www.transportation.gov/highway-trust-fund-ticker

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