ImportCar’s 2004 Import Repair Specialist Study – UnderhoodService

ImportCar’s 2004 Import Repair Specialist Study

m in peak-operating condition. ImportCar recipients, who represent the repair network dedicated to servicing this specialized vehicle population, are reaping the benefits of the proliferating import marketplace through their dedication to professional, high-quality repairs. Their business data and shop status reports prove it.

Featuring the results of a recent random survey of ImportCar recipients, this article defines the scope of the import specialist repair market, as reflected through our readers’ businesses. This study gathered key information on shop owners and technicians, parts purchasing sources, buying criteria, brand preferences, shop operations statistics, including years in business, average total sales volume, and number of bays and technicians, average age of vehicles repaired, sources for technical information, the frequency of sales calls from the supplier network and more!

Owner/Employee Statistics. Survey respondents indicated that 70.4% of their shop’s total sales volume is attributed to service work on import vehicles. Vehicle longevity is evident on the nameplates they work on, with shop owners reporting that the average age of Asian vehicles repaired is 8.3 years, while the average age of European nameplates they repair is 8.9 years.

Survey respondents employ three technicians (including the owner) on average, yet 10% of them report they employ five to six techs and 3% indicated they employ between seven and eight. Paralleling the 2002 study, 76% of all shops responding to the survey have at least one ASE-certified technician.

Import specialist shop owners are very active in several facets of their business. This year’s study reveals that 83% of owners work on vehicles either daily or a few times a week. Yet they devote their time to performing both shop and front office responsibilities that include diagnosing and repairing vehicle problems, dealing with customers and suppliers, and managing their business. Illustrating the depth of involvement in the service side of their business, 29% of survey respondents classified their title as “owner/technician,” compared to 63% who indicated they were the “owner/president” of the shop.

Shop Statistics. The shops that were surveyed have been in business for an average of 22 years, up slightly from 21.2 years in the 2002 study, and their average annual sales volume was $352,872 (reflecting a slight decrease from last year’s annual sales volume number of $375,286). Half of shops in the survey have been in business for more than 20 years, and 32% of shops have been servicing imports for more than 25 years, documenting the viability, growth and success of the import market segment and its players.

Sales Volume. There is a direct correlation between annual sales volume and number of technicians employed at a shop. The higher the sales volume, the more technicians are employed. Shops reporting an annual sales volume of less than $201,000 have an average of 1.9 technicians, while shops with an average annual sales volume of more than $800,000 employ close to six technicians. Likewise, shops with an annual sales volume of between $401,000 to 600,000 employ an average of 3.6 techs.

The same proportional relationship is true with bays. Shops that bring in less than $201,000 annually have an average of 3.6 bays, while shops that bring in $800,000 have an average of 7.7 bays. The average number of bays among survey respondents is 4.7 (median is 4), which is in line with the five bays reported in the 2002 study.

Sourcing Parts. Import specialists report using several sources to obtain quality parts for import vehicle repairs. Topping the list is the import specialist network, including import specialist warehouse distributors/jobbers and parts expediters, with respondents indicating that they purchase 33% of their import vehicle parts from these sources (versus 39% in the 2002 study). Further, 92% of respondents indicated using the import specialist parts network as a source to buy parts, likely because of their nameplate-specific coverage, depth of inventory and proven brands, and the trusting business relationship that exists between this channel and independent repair facilities. Tapping into their market share, however, are domestic warehouse distributors/jobbers and new car dealerships, with 76% and 84% of respondents indicating that they use these sources to purchase import parts, respectively. (These numbers are up from 70% and 78%, respectively, in the 2002 study.)

Specifically, respondents reported that they purchase 28% of their import parts from domestic warehouse distributors/jobbers (up from 24% in the 2002 study) and 19% from new car dealerships (up from 17.8% in the 2002 study, and almost mirroring the 20% number from the 2000 study). It’s not surprising that parts purchases from these two channels increased. Afterall, domestic warehouse distributors/jobbers are broadening their coverage to include more import applications, and car maker wholesale parts programs continue to appeal to independent repair facilities that are in need of quality OEM parts that are readily available.

Other parts sources used by survey respondents include retails parts stores, importers and on-line suppliers. Interestingly, import specialist respondents said they deal with 4.2 jobbers in a typical week, on average, and they use a new car dealer 6.4 times a week when sourcing import parts.

OEM Parts. Import specialists purchase a number of bumper-to-bumper parts from their new car dealer sources, as they rely on the proper fit, function and performance to ensure quality repairs and eliminate comebacks. Parts considered to be the more “critical” underhood components topped the list among survey respondents. In fact, 74% of respondents indicated that they purchase engine management components/sensors from a new car dealer (up from 70% in the 2002 study). Yet, a significant percentage of chassis, brake, A/C and spark plugs/wires are also sourced from new car dealers and, therefore, also scored noteworthy dealer purchase percentages. Parts falling into the “other” category in the accompanying chart are “dealer only” or “captive” parts.

Factors Influencing Parts Purchasing Decision. When purchasing parts from a dealer, there are a number of factors that influence an import specialists’ decision to purchase an OEM part instead of an aftermarket part. Almost 70% of respondents indicated that an OEM part’s performance/fit/function characteristics were among the most important factors that influenced their decision (up from 65% in the 2002 study). Availability ranked second, with 62% of respondents indicating this factor was a major influence when selecting between OEM and aftermarket parts. This number is also up from the two-year-ago study, where 54% of respondents said availability was a primary determining factor in their OEM parts purchasing decision. Interestingly, for a small percentage of respondents (2%), the color/appearance of the OEM part affected their decision to purchase an OEM part over an aftermarket part.

Overall, whether buying an OEM or an aftermarket part, the primary factors influencing an import specialists’ decision (ranked on a scale of 1 to 5, with 1 being the most important factor in making a purchase decision and 5 being the least important factor), include product quality (1.2 rating), fast delivery (1.7), price (2.0), brand name (2.0), ease of returns (2.0), full-line coverage (2.1), lifetime warranty (2.4), technical training (2.9), tech hotline (3.0), catalogs (3.1), marketing support (3.2) and promotion/P.O.S. materials (3.6). As the sophistication of today’s vehicle systems continues to escalate, and as more of these vehicles enter the aftermarket for service, it’s no wonder that high-quality, precisely fitting parts that are readily available become the conduit for import specialists to achieve efficient, expert repairs.

Brand Preferences. Import specialists buy brands they trust – ones they know will produce proven performance results and will endure the test of time. They are very brand conscious and brand loyal. When ordering parts for import vehicles, 63% of respondents indicated that they “always” or “frequently” specify brand. And, 24% said they “sometimes” do. Conversely, only 2% said they “never” specify a brand. Oftentimes, when a brand is not specified, it’s because the shop owner/technician is familiar with the brands carried by their primary suppliers. In fact, 90% of survey respondents indicated that this was the case for them not specifying a certain brand when ordering parts from their vendors.

Import specialists’ customers trust them to make good decisions when buying parts to fix their vehicles. Fifty-one percent of respondents indicated that their customers “rarely” specify a brand and 15% said they “never” do.

Technical Information Sources. When obtaining technical information for repairing import vehicles, import specialists use a variety of sources to complement their skills and expertise. As was true with the previous two surveys, repair manuals (including electronic databases) and trade magazines were the most prominent sources. Ninety-one percent of shops use repair manuals as a source and 60% of shop owners said it was the most important source they use. Trade magazines came in second, with 72% of owners indicating that they use them as a source to obtain solid technical information. Other viable sources of technical information include on-line services, training schools, parts manufacturing bulletins and OEM service information websites.

Frequency of Sales Calls. Import specialists report that they get direct sales calls from jobber, new car dealer, warehouse distributor and retail parts store representatives, but in varying degrees of frequency. Although, there is evidence that more frequent contact with independent repair shops is on the rise.

In the last study, 55% of respondents said they got a direct sales call from a jobber within the past 30 days. This year, 64% said this was the case. Further, while only 12% said they got a sales call from a representative of a new car dealer within the same timeframe in the 2002 study, 26% said this was the case this year. The double-digit increase parallels the growth of OEM wholesale parts programs, aimed at delivering quality parts and support to independent repair facilities that perform the most significant amount of post-warranty repair work.

Overall, more frequent sales calls by jobber and new car dealer reps signals a greater emphasis on the “people coefficient” as a viable business-building tool. Although, this practice doesn’t span the entire supply chain spectrum. For example, 15% of survey respondents said the last time they got a direct visit from a jobber was “so long ago they can’t remember,” and 43% said it was that long since they were visited by a new car dealer rep.

The proliferating import vehicle fleet, with its accompanying technological advancements and repair challenges, also presents service opportunities for import specialists who read the market, chart their shop’s course, market their shop’s services and expertise, and arm themselves with the knowledge to tackle the vehicle repairs that enter their bays.

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