Several disruptive trends and automotive industry challenges are poised to transform the automotive and auto repair industry outlook for 2021 and beyond. Auto repair shops that want to ensure they will survive these disruptive trends and thrive in 2021 and going forward must begin to take steps now to prepare their shops and their staff for a future that will be dramatically different because new and transformative trends will drive it. They will require the acquisition of more technologically advanced tools, equipment, and machines. Many auto repair technicians will have to be retrained to ensure they have the right skill set to handle the changing auto repair needs in 2021 and beyond.
10 Major Auto Repair Industry Trends
New technology-driven trends are poised to disrupt and transform the auto repair industry. These trends will revolutionize the way automobiles are built, powered, and repaired. The key question is how auto repair industry shops will respond to the changing consumer needs for specific types of automobile repair, the technology that will be required to deliver it, and the ability to develop new types of partnerships with tools, equipment, and replacement parts manufacturers. The transformational automobile design changes are hastening the demise of the low-tech auto repair shop. The following are some of the trends crashing the modern auto repair industry.
1. More Reliable Vehicles
The cars, trucks, and SUVs being produced today are more reliable than ever before. Many of them can go years and tens of thousands of miles before they need to change their oil and oil filters. These were the types of maintenance services that brought automobiles into auto repair shops on a regular basis. With synthetic engine oils designed to last a very long time before it needs to be changed and other maintenance and repair services covered by the dealership for several years after the vehicle is purchased, these new, more reliable vehicles will change the auto repair shop’s role dramatically.
2. Increased Vehicle Leasing
Another growing automotive trend that will impact auto repair shops in 2021 and beyond is the increase in vehicle leasing rates. Between 2009 and 2016, vehicle lease originations skyrocketed from just over one million to almost 4.5 million. And that trend of consumers choosing leasing automobiles over buying them is expected to continue. That means significantly less maintenance and repair work for automobile repair shops unless they form partnerships with companies that lease automobiles.
3. Reduced Demand For Replacement Auto Parts
A reduction in the demand for replacement auto parts is another trend that’s anticipated to hurt the auto repair industry going into 2021. With the advancements being made in automotive technology, vehicle owners are finding it increasingly difficult to repair and maintain their vehicles themselves. As a result, shares in major auto parts stores like O’Reilly Automotive have fallen about 22%. Industry experts say the higher quality components being produced today last longer, and warrantless frequent need for automobile repairs and industry demand may continue to be soft in 2021 and beyond.
4. Growing Preference For Having Dealerships Handle Repairs
In recent years, automobile owners have shown a growing preference for their maintenance and repair services at automobile dealerships. This has led to a steady decrease in the number of people who take their vehicles to local auto repair shops. Some auto industry experts say this trend is related to the increase in the number of people who lease their automobiles from dealerships. The challenge for local auto repair shops is to find a way to tap into that market.
5. Digitization, Increasing Automation, And Electrification
The increasing use of these features in modern automobiles has revolutionized the auto repair industry and is putting pressure on auto repair shops to upgrade their technology to be able to provide maintenance and repair services for digitized, automated, and electric automobiles in 2021 and beyond. Owners of these cutting-edge vehicles must be confident local auto repair shops have the trained technicians and technology to properly repair these technologically advanced vehicles.
6. Enhanced Telematics And Connectivity
New vehicles increasingly have telematics embedded in them. Training in telematics is becoming critical. Consumers must know the local auto repair shops can handle these new technologically-advanced automobiles and have the right parts to do the repairs the vehicles need, whether it’s to their telematics, connectivity, or sophisticated computer, electrical and mechanical systems. They must also market the competency of their shops to properly deal with the telematics and connectivity of even the latest, most cutting-edge, newer vehicles. According to the Auto Care Association, being able to deal with this trend and determining who has access to the data is essential for auto repair shops and the industry’s success.
7. Shortage of Techs
Another trend the auto repair industry faces is the retirement of millions of shop techs. The concern is there are not properly enough trained automobile technicians to fill those millions of jobs now available. The Auto Care Association’s newly created job board is part of their proactive approach to addressing the auto repair tech shortage they will face in 2021 and ongoing. They are working with universities to teach STEM courses to aspiring automotive technicians and with automobile manufacturers to fill the job creation pipeline with millions of well-prepared automotive technicians.
New business models that combine and are driven by connectivity services, shared mobility, and feature upgrades are a new trend with the ability to expand the automotive revenue pool by more than 25%. That will significantly diversify and increase the on-demand, data-driven mobility services. It can increase the demand for aftermarket products and services by as much as 50%. The auto repair industry must be able to update and upgrade the autonomous technology platforms through the use of software-based systems on-demand in privately used vehicles to meet the personal needs of vehicle owners as technology advances.
9. Emerging Markets
Developments in emerging markets are triggering dramatic economic changes. This trend is accelerated by changing consumer ownership preferences and the rise of a number of new automotive technologies. Despite the upcoming shift toward shared mobility, global sales of automobiles will continue to grow, albeit by a lower 2% annual rate by 2030. It’s anticipated that beginning in 2021, e-hailing and car-sharing services will grow significantly in cities and suburbs in Europe, Asia, and North America. This higher utilization of shared vehicles will create more wear and tear and a greater need for the services of well-positioned automobile repair service chains.
10. Game-Changing Disruption
Most auto industry experts agree the automotive industry is faced with imminent, widespread, game-changing disruption. No one is certain what this trend will make the industry look like over the next 10 to 15 years. Some are calling it the “2030 automotive revolution”. And the automobile repair industry faces the challenge of positioning itself to take advantage of the type of changes coming to the automotive value chain that includes traditional vehicle manufacturers, suppliers, consumers, and markets.
Auto Repair Industry Stats and Growth Projections in 2021
The statistics on the latest automotive trends show the auto repair industry is in a good position going into 2021.
- Research shows in 2021; there will be an estimated 76 million vehicles aged 16 years or older in the United States.
- The number of vehicles 5 years old or less is predicted to increase by almost 25%.
- It’s estimated that by 2021, 18% of American households will use an auto repair service at least once a year.
- Automobiles that are age 12 years or older are anticipated to increase by 15%.
- In the past decade, the average length of time new and used automobiles are owned increased 60%.
A Bright Future
The future is very bright for the automobile repair industry. The key is for its members to position themselves properly. People in traditional and emerging markets are driving hundreds of millions of new and used automobiles that will need to be upgraded, repaired, serviced, and maintained. More importantly, independent auto repair shops perform 75% of the aftermarket automobile repair services for the auto repair industry. If automobile repair shops are diligent and proactive in investing in the latest and most-effective tools, equipment, and technology and make sure their service technicians are properly trained, they will continue to be profitable in 2021 and beyond.