Publisher’s Perspective: How’s Business? – UnderhoodService
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Publisher’s Perspective: How’s Business?

All the Indicators Look Good

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There are some very strong signs that business will be good in 2005. After a robust 2004, optimism among repair shop owners is at the second-highest level since we started tracking this data four years ago.

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During the first week of January, we faxed a survey to 3,000 automotive service and repair shop owners across the country to gauge their business performance for the fourth quarter of 2004. The following information allows you to compare your shop’s figures to this nationally representative sample.The fourth quarter 2004 results were very good compared to the fourth quarter of 2003. Forty-five percent of repair shop owners reported revenue to be above the levels of 2003, 28% said business was flat and 27% reported a decrease. Overall, much like 2002, 2004 proved to be a very strong year in terms of sales revenue.

Looking toward the first quarter of 2005, 52% of shop owners feel it will be better than the fourth quarter of 2004. Considering the strength of the results from the fourth quarter of 2004, this is a very high score and a sign that the market should be off to a fast start.

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Another positive sign that repair activity is increasing in the bays comes from the number of shops looking to hire technicians.

As you can see in the below chart, this metric had been on a steady decline since the first quarter of 2004. The recent data shows a seven-point jump in one quarter to the 42% level. When you consider the optimistic mindset as 2005 unfolds, the need to have qualified technicians to satisfy this increase in demand for service work is no surprise.

The fact that 2004 was a good year for the service business, and that 2005 also looks strong, should not be a surprise to anyone. When one examines the big-picture numbers, the next several years should be good. The overall number of vehicles on the road continues to increase; the number of total miles driven per year continues to rise; the number of new cars sold continues to increase; and the average age of vehicles on the road continues to increase. All of this translates to more cars and trucks that will need to be serviced.

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