Automotive Repair & Maintenance Services pdf

INDUSTRY PROFILE Automotive Repair & Maintenance Services SIC CODES: 7532, 7536, 7538 NAICS CODES: 8111 11/21/2011 About First Research First Research, a D&B company, is the leading provider of Industry Intelligence Tools that help sales and marketing teams perform faster and smarter, open doors and close more deals. First Research performs the “heavy lifting” by analyzing hundreds of sources to create insightful and easy to digest Industry Intelligence that can be consumed very quickly to better understand a prospect’s or client’s business issues. Customers include leading companies in banking, accounting, insurance, technology, telecommunications, business process outsourcing and professional services such as ADP, Bank of America, Merrill Lynch and Sprint. Used by more than 60,000 sales professionals, First Research can benefit any organization which has prospects in multiple industries. Attention: This Industry Profile purchase is an individual license and is not to be distributed to additional individuals even within the same organization. For corporate or small business subscription information, visit www.firstresearch.com or call 866-788-9389. Industry Overview The US automotive repair and maintenance services industry includes about 165,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $85 billion. Major companies include Meineke (a division of Driven Brands), Midas, Monro Muffler Brake, Precision Auto Care, and Safelite Group. The industry is highly fragmented: the 50 largest companies generate less than 10 percent of revenue. Separate industry profiles cover Automotive Oil Change & Lubrication Services and Car Washes, which are included in the automotive repair and maintenance services industry. COMPETITIVE LANDSCAPE Demand depends on car usage and the number of cars on the road. The profitability of individual companies depends on convenient location and good marketing. Large companies can maximize use of expensive diagnostic equipment and have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by providing superior customer service or offering specialized services. The industry is labor-intensive: average annual revenue per worker is about $100,000. Competition includes other venues that provide automotive services, including some gas stations, car dealerships, and branches of chain stores, like Sears and Kmart. Auto repair shops perform an estimated 70 percent of repairs for out-of- warranty vehicles, according to the Automotive Service Association (ASA). PRODUCTS, OPERATIONS & TECHNOLOGY Major services include mechanical repair (about 60 percent of industry revenue), collision repair (25 percent) car washes (10 percent), and oil change and lube (5 percent). Mechanical jobs are classified as repairs to undercar systems (mufflers and exhausts, transmissions, brakes, and shock absorbers) or underhood systems (engines, electrical systems, radiators). Body work includes exterior and interior repair and glass replacement. Companies may also sell parts for do-it-yourselfers (DIY). The industry includes national and regional chains, franchises, and independent operators. The majority of auto repair shops are independently owned, although many are franchises of large companies. Car repair shops may specialize in a particular field of repair, such as brake jobs or collision repair, because of the specialized knowledge and equipment required. Most companies in the mechanical field provide generalized services, such as regular maintenance, in addition to specialty services. In auto repair shops, estimators review vehicles and give customers quotes on the approximate cost of a repair. Estimators may rely on car makers' recommendations or computer software to help develop an accurate estimate. Repairs sometimes uncover other problems, resulting in additional work and charges in excess of the estimate. Regardless of the cause of error, inaccurate estimates have resulted in unhappy customers and general mistrust of the industry. Mechanical repair shops deal mainly with deterioration of parts due to normal wear. Common repairs involve air conditioning, brake, transmission, and electrical systems. Because of the increased technological complexity of newer cars, most shops have specialized diagnostic equipment to identify and fix problems. Shops typically keep an inventory of replacement parts or have arrangements with quick delivery parts suppliers. Experienced, well-trained auto technicians are critical to quality repair work. Companies may also employ apprentice or entry-level technicians. Collision repair involves two distinct types of repair: body work and painting (or refinishing). In the body shop, technicians correct damaged car frames and panels. Each repair is unique and depends on the accident that caused damage. The painting process includes several standard steps and operates more like an assembly line. Paint preparation includes feathering (smoothing the surface) and priming. Paint application typically involves applying multiple coats. Finishing provides a protective clear coat. Collision repair jobs usually take four to eight days. Equipment includes welders, paint booths, frame machines, and plasma cutters. Key staff includes framers, technicians, and painters. A typical mechanical repair shop has seven service bays and handles 200 repairs a month, according to the Automotive Service Association (ASA). A typical body shop has 15 bays and handles about 100 repairs per month. Auto repair shops may buy replacement parts and supplies from full-line vendors, such as NAPA, or have supply arrangements with multiple distributors. Some large companies have purchasing contracts with specific suppliers. Chains of repair shops often maintain parts distribution centers to minimize the parts inventory needs at individual stores. With hundreds of parts needed for thousands of car models and production years, individual stores can't keep complete inventories. Shops may install OEM or aftermarket (rebuilt) parts. Many shops use computerized information systems to help manage point-of-sale, inventories, purchasing, accounting, and customer relations. Database programs give companies fast access to customer and vehicle information and repair histories. Electronic cataloging allows companies to research maintenance requirements and specific parts needed for a vehicle's particular make, model, and mileage. Diagnostic computer systems are essential equipment for mechanical repair shops because modern cars are filled with sensors and onboard diagnostics (OBD) - a vehicle's self-diagnostic system. Many shops have websites that communicate basic information, including hours of operation and services performed. Some companies allow customers to schedule appointments or obtain estimates online. SALES & MARKETING Almost 80 percent of mechanical repair shop and 50 percent of collision repair shop customers are repeat, according to the Automotive Service Association (ASA). Auto repair shops typically draw customers from a 20-mile radius. Marketing and promotional vehicles include phone directories; signage; local newspaper, TV, and radio ads; and direct mail. Because business related to insurance claims can be a large percentage of sales, relationships with insurance agents and companies are important for large body shops. About 30 percent of body shops report higher profits after affiliating with an insurance-sponsored direct repair program (DRPs), according to Body Shop Business. Because companies tend to rely on repeat business, maintaining customer satisfaction is crucial. A good reputation among customers can yield valuable word-of-mouth advertising. Recommendations and links from consumer ratings websites also can help generate referrals. FINANCE & REGULATION While cash flow is generally even, some mechanical repair shops have higher sales in summer (when consumers tend to drive more), and some collision repair shops have higher sales in winter (when more crashes occur). Most repair shops have low receivables, since payments are generally made when repairs are complete. However, shops that perform insurance-related work may carry some receivables as they wait for insurers to process payment. Companies may have large investments in tools and specialized equipment, such as lifts, compressors, painting systems, and computer diagnostics like gas analyzers, engine analyzers, scanning tools, and crash data retrieval systems. Some larger companies that service foreign cars may buy directly from foreign suppliers, and consequently have exposure to foreign currency fluctuations. Some large chains, such as Midas and Jiffy Lube, are mainly franchise operations. Owners of a franchise typically pay an initial franchise fee, monthly royalty payments, and advertising fees. The franchiser generally helps with operations systems, personnel training, and advertising; connects the franchisee to its centralized inventory management system; and sells parts and equipment at discounted prices. Franchisers may own the land and buildings of its locations and lease property to franchisees. Franchise agreements may run for up to 20 years and are often protected by strict state franchise laws. Because repair shops usually handle motor oil, gas, antifreeze, lubricants, paints, and solvents, companies must adhere to various state and federal environmental pollution regulations, mainly concerning toxic waste disposal, ground contamination, and underground storage tanks (USTs). In the case of body paint shops, government regulations try to minimize air emissions and worker exposure to hazardous fumes. Various state laws penalize repair shops for overcharging, performing needless repairs, and using poor-quality replacement parts. Shops that handle insurance business are subject to state insurance laws that focus on inflated claims estimates and other types of insurance fraud. REGIONAL HIGHLIGHTS The types of car repairs made and the types of cars that repair shops usually see vary by market. Undercarriage and collision repairs are more frequent in cold winter states, where snow, ice, and salt can increase accident rates and corrosion. States with high accident rates include Rhode Island, Georgia, Illinois , and Kentucky, according to Body Shop Business. HUMAN RESOURCES Owners and managers of repair shops are usually experienced mechanics who directly oversee the technicians who do most of the actual repair work. Technicians can receive various grades of certification from professional groups like the American Institute for Automotive Service Excellence (ASE). To gain experience, many workers start as apprentice technicians. Because average hourly industry wages are moderately lower than the national average, turnover, particularly among entry-level workers, can be high. The industry injury rate is about the same as the national average. Industry Employment Growth Bureau of Labor Statistics Average Hourly Earnings & Annual Wage Increase Bureau of Labor Statistics Recent Developments INDUSTRY INDICATORS US consumer spending on services, an indicator of auto repair shop sales, rose 2.1 percent in December 2011 compared to the same month in 2010. The average US retail price for diesel and regular gas, which influences consumers' use and wear of their automobiles, rose 11.6 percent and 12.2 percent respectively in the week ending February 13, 2012, compared to the same week in 2011. Total US revenue for automotive repair and maintenance rose 2.3 percent in the third quarter of 2011 compared to the same period in 2010. QUARTERLY INDUSTRY UPDATE Consumers Keeping Older Cars Longer - As prices for cars, gasoline, and tires keep rising, consumers are holding on to their older model cars longer, according to The Wall Street Journal. Post-recession concerns about the economy limit consumer spending, and many are opting to keep old cars running rather than buy a new vehicle. Monro Muffler Brake has said the average age of the cars coming into its repair shops has risen from between 6 and 10 years to about 12 years since the recession began in 2008. Monro's exhaust system business is growing again after 14 years of decline. In September 2011 Monro reported record sales and profits in its fiscal second-quarter 2012. Monro's sales rose 6.9 percent compared to the same period the year before; profits increased 14 percent. US Auto Sales Improve - US passenger car and light truck deliveries, an indicator of demand for automotive repair and maintenance services, improved in September 2011, according to Autodata. US deliveries of passenger cars rose 3.4 percent in September 2011 compared to the same month in 2010; light truck deliveries grew 16.1 percent. Year-to-date, passenger car deliveries were up 8.7 percent and light truck sales 12.2 percent. Volkswagen Group of America saw the largest gains in September 2011 with growth of 30.8 percent; Saab Cars of North America experienced the weakest delivery volume, with a drop of 61.9 percent. Business Challenges CRITICAL ISSUES Competition from Large Repair Shops and Chains - The greater operational and pricing efficiencies of large shops allow them to take business from smaller shops, despite some having less convenient locations. Franchise chains, dealerships, and large shops also have advantages in buying, managing inventory, and amortizing expensive equipment. Because of strong competition in local markets, repair shops have limited ability to raise prices. Public Mistrust - Because of the complexity of cars, consumers can't easily judge if a repair shop has treated them fairly. Polls consistently show that a high percentage of consumers believe that repair shops make unnecessary repairs, overcharge, or use inferior replacement parts. Media reports about repair shops engaged in unethical practices, including insurance fraud, are frequent. OTHER BUSINESS CHALLENGES Body Shops Depend on Insurance - Revenue generated by insurance direct repair programs (DRP) can account for a large portion of a shop's business. Large companies, such as Allstate, State Farm, Farmers, Nationwide, and Progressive, dominate the insurance industry. To maintain their insurance business, body shops must conform to insurance company demands about billable rates, replacement parts, and warranties. Some shops feel forced to agree with insurance suggestions, like overlooking auto damage or installing cheaper aftermarket parts. Car Makers Control Repair Information - Because of their control over repair information, especially information in onboard diagnostic (OBD) systems, car makers can hinder shops' ability to make appropriate repairs. Technicians must have specific information from car manufacturers about how to repair a part or problem, and, in some cases, must have special equipment. Car makers sometimes release such information first to their own dealers. Competition from Car Dealers - The parts and service centers of dealerships are often more profitable than the sales department. Many dealers offer evening and weekend hours to compensate for inconvenient locations. If dealers can perform initial warranty services to a customer's satisfaction, they increase the chances of customers returning for maintenance and repair business when warranties expire. Growing Car Complexity - As automobiles become more technologically complex, maintenance and repair services become more difficult and expensive. Shops may need to invest in special diagnostic equipment or other tools to make repairs to advanced systems. Service technicians may also require additional training to work on the latest model cars. New Materials Require Special Handling - The growing use of aluminum and other non-traditional materials in auto bodies has created new challenges for repair shops. The number of trained shop technicians lags the increasing use of the lightweight materials, such as magnesium and carbon fiber. Aluminum repairs require specially trained technicians, a separate bay, and special tools. Some auto manufacturers require certification for shops that repair vehicles with aluminum body parts. Trends & Opportunities BUSINESS TRENDS Driving Trends Evolving - Record high gas prices and a weak economy have affected driving habits and the number of cars in the US. After decades of growth, total traffic volume has leveled off in recent years. The US car fleet shrank by 2 percent in 2009, according to the Earth Policy Institute. The US fleet is shrinking because the number of cars scrapped each year is exceeding the number of cars sold. The trend of scrappage exceeding sales is expected to continue through at least 2020. Service Offerings Evolve - Because auto parts are more durable now, many mechanical shops have adapted service offerings to focus on light repair. Some newer engines require oil changes less frequently, reducing maintenance needs. However, increasing complexity of newer vehicles forces many DIYers to rely on repair shops. Anti-Steering Legislation - When insurers steer repair business to direct repair program (DRP) shops, smaller independent repairers lose revenue. Auto insurance companies increasingly control the flow of business to the auto repair industry, prompting some states to consider legislation that would prevent "steering." Because insurance companies refuse to pay more than the "prevailing rate" for labor in a particular market, many shops blame insurers for depressing labor rates and hindering the ability of small shops to turn a profit. Increasing Need for Certification - More insurance companies now require certification of body shop technicians, and certification is becoming more widespread among mechanical repair shops. The most common certification is Automotive Service Excellence (ASE). As more repair shops specialize, they're more likely to get certification from car manufacturers. INDUSTRY OPPORTUNITIES Servicing Nontraditional Vehicles - Auto repair shops can create a niche by developing expertise in nontraditional or specialized vehicles. Rapidly growing sales of fuel-efficient vehicles, including hybrids, electric cars, and cars that run on alternative fuels, have increased demand for specialized repair services. By offering restoration or custom paint jobs, shops can attract owners of vintage or classic cars. Hot rods and muscle cars may require nontraditional or "retro" engine parts and special attention. Owners of nontraditional vehicles can be passionate about their cars and are likely to spend more to keep them functional. Paintless Dent Repair - By providing paintless dent repair (PDR), repair shops can fix small dings and dents at a reasonable cost to the customer. Recognized by most major insurance companies, PDR is a growing segment of the collision repair market. Because the volume of PDR jobs can vary, many shops outsource PDR. Some companies use PDR as an add-on to an existing job. Alliances with Car Dealers - Owners of expensive cars are more likely to want to use the service department at their car dealer, but are often at an inconvenient distance. By allying with a car dealer and meeting quality standards, a local repair shop can be referred new business by a distant dealer in exchange for buying parts from the dealer. Collision repair is a key opportunity for shops because an increasing number of dealerships are opting out of providing body shop services. Older Vehicles Require Frequent Service - Older cars, which require more maintenance and repairs, are a major source of business for auto shops. To save money, many consumers are delaying new car purchases. The median age for light vehicles has steadily increased over the past decade, to more than 10 years old, according to RL Polk. The strong market for used cars also contributes to future growth in vehicle repair services. Service for Car Electronics - The proliferation of electronic devices in cars, such as cell phones, navigation systems, video systems, and Internet access devices, will provide greater opportunities for shops that develop repair expertise with these systems. Vehicle manufacturers are responding to consumer demand by increasing the number of car models with new, integrated electronic features. Executive Insight CHIEF EXECUTIVE OFFICER - CEO Determining Repair Specialties Car repair can be complex and require specialized skills or equipment. Advances in automotive technology have forced many companies to specialize in the types of repairs they make or the types of cars they service, because of the different knowledge and equipment required. Mechanical repair accounts for 60 percent of industry revenue, body work for 25 percent. Within the mechanical field, shops may do undercar or underhood work. Negotiating Referral Agreements with Insurers Most large body shops receive the majority of their business through direct repair programs (DRP) from insurance companies. To qualify for DRP, repair shops must meet various service and financial criteria, buy replacement parts from approved providers, and negotiate the labor rates and rate basis for repairs. Once qualified, insurers provide customers a list of approved shops. CHIEF FINANCIAL OFFICER - CFO Setting Pricing Strategy Because major car repair can be expensive, consumers may get multiple estimates to get the best price. To be competitive, shops typically set pricing according to prevailing local market rates. Some companies use estimation software to help standardize pricing. The rate at which labor is billed is the crucial element of pricing. Labor may be billed for actual time spent or according to guidelines published by car manufacturers for specific jobs. Buying Low-Cost Replacement Parts Both mechanical repair and body shops can use various sources of replacement parts when making repairs. Parts supplied by car manufacturers are usually the most expensive, and those made specifically for the replacement market by non-original manufacturers can be significantly cheaper. Some repair shops buy used parts from salvage yards. Depending on the customer's preference, shops buy from several parts distributors in their region. CHIEF INFORMATION OFFICER - CIO Installing Computerized Diagnostic Equipment Computer systems and microprocessors are an integral part of most modern vehicles. Diagnosing problems with engines and similar components requires special equipment to communicate with the on-board diagnostic (OBD) systems now installed in cars. Various devices can be connected to the OBD system, from handheld scan tools that read the trouble codes to expensive laptop computer models that can be connected to record large amounts of data during a test drive. Integrating Inventory Management with Suppliers Although repair shops hold an inventory of basic items, parts for a particular repair job are often ordered for same-day delivery from regional suppliers. Through computer access to a supplier's inventory, repair shops can find and order the specific parts they need electronically. Some supplier ordering systems can check orders for accuracy, confirm order receipt, and alert repair shops through instant messaging if a part is out of stock. HUMAN RESOURCES - HR Retaining Repair Technicians Retaining experienced technicians is difficult because the value of technicians is higher than their pay. Much of a shop's profit comes from the difference between the cost for labor and the customer charge for labor. Experienced technicians can fairly easily start a repair shop of their own. Offering full benefits packages, including vacation and health insurance, and training can help companies retain technicians. Training Technicians for New Model Repairs Because of annual changes in auto design, repair technicians must receive ongoing training to work on new car models. Car manufacturers supply repair manuals for new cars, codes for OBD systems, and training programs. Technicians receive the majority of training from parts suppliers, according to the Automotive Service Association (ASA). Time constraints limit the amount of training a technician can receive, especially in a typical mechanical repair shop that has only a half-dozen technicians. VP SALES/MARKETING - SALES Devising Customer Loyalty Plans Mechanical repair shops get most of their business from returning customers or through referrals from existing customers. To encourage repeat business, shops remind customers of routine maintenance schedules, mail them discount coupons for maintenance items, and award free services like a car wash or an oil change for frequent appointments. Free services are also awarded for referrals of new customers. Maximizing Internet Opportunities Internet sites are typically used to list services and provide directions, but advanced sites can make appointments, list prices, and provide customers with detailed information about their cars. Shops can link to third-party auto sites, like AllData, or business-related sites like chambers of commerce to generate referrals. Call Preparation Questions EXECUTIVE INSIGHT CEO: What types of repairs does the company specialize in? Within the mechanical field, shops may do undercar or underhood work. CEO: How important is DRP participation to the company's sales? Most large body shops receive the majority of their business through DRP from insurance companies. CFO: How does the company develop pricing strategies? Shops typically set pricing according to prevailing local market rates. Some companies use estimation software to help standardize pricing. CFO: What is the company's most important source of replacement parts? Parts supplied by car manufacturers are usually the most expensive, and those made specifically for the replacement market by non-original manufacturers can be significantly cheaper. CIO: What types of computerized diagnostic equipment does the company use? Various devices, from simple handheld scan tools to expensive laptop computer models, are used to diagnose and fix vehicles. CIO: How does the company integrate its inventory management systems with its suppliers? Through computer access to a supplier's inventory, repair shops can find and order the specific parts they need electronically. HR: How does the company retain skilled technicians? Offering full benefits packages, including vacation and health insurance, and training can help companies retain technicians. HR: What training does the company provide for technicians so that they can repair the newest vehicle models? Because of annual changes in auto design, repair technicians must receive ongoing training to work on new car models. Sales: How does the company promote customer loyalty? Shops can send reminders for routine maintenance, mail discount coupons, and award free services for frequent appointments. Sales: How has the Internet changed the way the company markets its services? Advanced websites can make appointments, list prices, and provide customers with detailed information about their cars. CONVERSATION STARTERS How does the company compete against large repair chains and car dealers? The greater operational and pricing efficiencies of large shops allow them to take business from smaller shops, despite some having less convenient locations. How does the company build trust with customers? Because of the complexity of cars, consumers can't easily judge if a repair shop has treated them fairly. What types of problems has the company experienced when dealing with insurance companies? Revenue generated by insurance direct repair programs (DRP) can account for a large portion of a shop's business. What specialized services does the company offer? Auto repair shops can create a niche by developing expertise in nontraditional or specialized vehicles. How does paintless dent repair fit into the company's service offerings? By providing paintless dent repair (PDR), repair shops can fix small dings and dents at a reasonable cost to the customer. How might relationships with car dealers help the company's business? Owners of expensive cars are more likely to want to use the service department at their car dealer, but are often at an inconvenient distance. QUARTERLY INDUSTRY UPDATE How, if at all, has the sluggish economy affected demand for the company's services? As prices for cars, gasoline and tires keep rising, consumers are holding on to their older model cars longer, according to The Wall Street Journal. OPERATIONS, PRODUCTS, AND FACILITIES What kinds of special equipment does the company use? Because of the increased technological complexity of newer cars, most shops have specialized diagnostic equipment to identify and fix problems. In body shops, common equipment includes welders, paint booths, frame machines, and plasma cutters. What does the company rely on to develop repair estimates? Estimators may rely on car makers' recommendations or computer software to help develop an accurate estimate. How often does a repair cost more than the estimate? Repairs sometimes uncover other problems, resulting in additional work and charges in excess of the estimate. Regardless of the cause of error, inaccurate estimates have resulted in unhappy customers and general mistrust of the auto repair industry. What are the company's most common repairs? Common repairs involve air conditioning, brake, transmission, and electrical systems. For body shops, each repair is unique and depends on the accident that caused damage. What types of commitments does the company have to its suppliers? Auto repair shops may purchase replacement parts and supplies from full-line vendors, such as NAPA, or have supply arrangements with multiple distributors. Some large companies have purchasing contracts with specific suppliers. How does the company manage replacement parts inventory? Chains of repair shops often maintain parts distribution centers to minimize the parts inventory needs at individual stores. Some shops keep a limited inventory of parts on hand or have arrangements with quick delivery parts suppliers. How often does the company use aftermarket parts? Shops may install original equipment manufacturer (OEM) parts or aftermarket parts (rebuilt). What products or services does the company offer in addition to repair work? Most companies in the mechanical field provide generalized services, such as regular maintenance, in addition to repair work. Other services include oil changes and car washes. Companies may sell parts for do-it-yourself (DIY) customers. What is the average number of repairs for the company's shops? A typical mechanical repair shop has seven service bays and handles 200 repairs a month, according to the Automotive Service Association (ASA). A typical body shop has 15 bays and handles about 100 repairs per month. CUSTOMERS, MARKETING, PRICING, COMPETITION How big is the company's geographical market area? Auto repair shops typically draw customers from a 20-mile radius. What are the company's most effective marketing and promotional vehicles? Marketing and promotional vehicles include phone directories; signage; local newspaper, TV, and radio advertising; and direct mail. How important is word-of-mouth for the company? Companies rely heavily on customer referrals. An honest reputation can generate positive word-of-mouth. What are the benefits of insurance-related sales? About 30 percent of body shops report higher profits after affiliating with an insurance-sponsored direct repair program (DRPs), according to Body Shop Business. What warranties does the company offer? Many shops offer warranties on repairs, in case problems arise. What is the company's primary competition? Competition includes other venues which provide automotive services, including some gas stations, car dealerships, and branches of chain stores, like Sears and Kmart. REGULATIONS, R&D, IMPORTS AND EXPORTS How do government environmental regulations affect the company's operations? Because repair shops usually handle motor oil, gasoline, antifreeze, lubricants, paints, and solvents, companies must adhere to various state and federal environmental pollution regulations, mainly concerning toxic waste disposal, ground contamination, and underground storage tanks (USTs). How have emissions and safety regulations affected the company's paint shops? In the case of body paint shops, governmental regulations attempt to minimize air emissions and worker exposure to hazardous fumes. How does the company avoid violating consumer protection laws? Various state laws penalize repair shops for overcharging, performing needless repairs, and using poor quality of replacement parts. How does insurance fraud affect the company? Shops that handle insurance business are subject to state insurance laws that focus on inflated claims estimates and other types of insurance fraud. ORGANIZATION AND MANAGEMENT What skills does the company's staff need? Mechanical repair shops typically employ skilled auto technicians. Body shops employ framers, technicians, and painters. What types of certification do the company's technicians have? Technicians can receive various grades of certification from professional groups like the American Institute for Automotive Service Excellence (ASE). How important are apprentice programs to the company's staff development? To gain experience, many workers start as apprentice technicians. How does the company minimize turnover? Because average hourly industry wages are moderately lower than the national average, turnover, particularly among entry-level workers, can be high. If the company is a chain or franchise, what is the company's relationship with the parent company? The industry includes national and regional chains, franchises, and independent operators. The majority of auto repair shops are independently owned, although many are franchises of large companies. FINANCIAL ANALYSIS How does seasonality affect sales? While cash flow is generally even, some mechanical repair shops experience higher sales in the summer (when consumers tend to drive more), and some collision repair shops have higher sales in the winter (when more crashes tend to happen). [...]... information, please either visit www.BVMarketData.com or call 888-287-8258 Industry Forecast The output of US automotive repair, maintenance, and services is forecast to grow at an annual compounded rate of 3 percent between 2011 and 2016 Data Published: October 2011 Automotive Repair and Maintenance Services Growth Flattens First Research forecasts are based on INFORUM forecasts that are licensed from the... and reviewed annually Consumer Spending: Change in overall level of consumer spending on goods and services Web Links & Acronyms INDUSTRY WEBSITES Automotive Body Repair News Industry news Automotive Industries Association of Canada News from Canadian trade association for the automotive aftermarket Automotive Service Association Industry news, trends and statistics from trade association Annual business... 900 industries (SIC & NAICS) and 13 sales size ranges 2010 data and historical data from 1998-2009 available by subscription or single report purchase at www.microbilt.com/firstresearch ECONOMIC STATISTICS AND INFORMATION Annual Construction Put into Place - Census Bureau Change in Consumer Prices - Bureau of Labor Statistics VALUATION MULTIPLES Automotive Repair & Maintenance Services Acquisition... certification organization for auto technicians Professional Tool & Equipment News Auto repair tool and equipment market news GLOSSARY OF ACRONYMS ASA - Automotive Service Association ASE - Automotive Service Excellence DIY - do-it-yourself DRP - direct repair program OBD - on-board diagnostics OEM - original equipment manufacturer PDR - paintless dent repair POS - point-of-sale UST - underground storage tank... Canadian Automotive Repair & Service Council News from Canadian trade association for auto technicians CollisionWeek Collision industry news INSIGHT Collision industry repair news National Automobile Dealers Association See "NADA Data" for details of parts and service department operations of car dealers National Highway Traffic Safety Administration Crash statistics and economics National Institute for Automotive. .. key information required for the repair process? Database programs give companies fast access to customer and vehicle information and repair histories Electronic cataloging allows companies to research maintenance requirements and specific parts needed for a vehicle's particular make, model, and mileage How has increased use of new body materials affected the collision repair business? The growing use... have affected driving habits and the number of cars in the US How has the collision repair market changed over the last few years? Increased vehicle safety, fewer miles driven, milder weather, and more "cash outs" (consumers opting out of repairs and spending insurance money elsewhere) have slowed demand for collision repair and caused many small body shops to struggle Financial Information COMPANY BENCHMARK... Gross Margin 91.1% 91.9% Officer Compensation 4.2% 5.1% Advertising & Sales 1.6% 1.6% Other Operating Expenses 82.6% 82.5% Operating Expenses 88.3% 89.2% Operating Income 2.8% 2.8% Net Income 0.6% 0.6% Balance Sheet Cash 8.7% 9.7% Accounts Receivable 10.4% 10.3% Inventory 8.1% 8.7% Total Current Assets 31.3% 32.7% Property, Plant & Equipment 48.3% 47.5% Other Non-Current Assets 20.4% 19.8% Total Assets...What are the company's average receivables? Most repair shops have low receivables, since payments are generally made when repairs are complete However, shops which perform insurance-related work may carry some receivables as they wait for insurers to process payment How does the company... equipment at discounted prices BUSINESS AND TECHNOLOGY STRATEGIES How have advances in auto technology affected the company's operations? Diagnostic computer systems are essential equipment for mechanical repair shops because modern cars are filled with sensors and onboard diagnostics (OBD) - a vehicle's self-diagnostic system How has information technology improved the company's basic business operations? . Separate industry profiles cover Automotive Oil Change & Lubrication Services and Car Washes, which are included in the automotive repair and maintenance services industry. COMPETITIVE LANDSCAPE Demand. of US automotive repair, maintenance, and services is forecast to grow at an annual compounded rate of 3 percent between 2011 and 2016. Data Published: October 2011 Automotive Repair and Maintenance. INDUSTRY PROFILE Automotive Repair & Maintenance Services SIC CODES: 7532, 7536, 7538 NAICS CODES: 8111 11/21/2011 About First Research First Research, a D&B company, is the