By Carm Capriotto, podcast host, Remarkable Results Radio
Every single day, 12 billion miles are driven by consumers in the United States, 2.2 million cars are brought in for repair and 158,000 brakes jobs are performed.
The opportunities in the automotive aftermarket continue to be strong, yet because of the aging demographic of independent shop owners, and larger corporations and private equity money looking for market share and bay count, the automotive aftermarket is consolidating.
There are 280 million registered vehicles in the United States with an average age of 11.7 years. Last year, Americans drove over 3.2 trillion miles. These numbers demonstrate the large opportunity for automotive repair consolidation in the marketplace.
To address this trend, AAPEXedu will have a Service Professionals Summit, “Aftermarket 2030: Consolidation Trends, Opportunities and Challenges for the Independent Service Professional,” on Thursday, Nov. 7, from 1:30 p.m. – 3 p.m., in Mobility Garage, Titian Ballroom. The three diverse panel members are multishop owner Greg Bunch, president of Aspen Car Clinic and president of Transformers Institute; from the distribution/supplier side of the industry Jason Rainey, general manager of NAPA CarCare; and Rick Schwartz, co-founder and CEO of Schwartz Advisors LLC, a mergers and acquisition advisor and management consulting firm to the automotive and heavy-duty transportation industry. I have the honor of being the panel moderator as we look at the future of aftermarket consolidation from three distinctly different perspectives.
The industry is vibrant. In 2018, the automotive aftermarket generated over $392 billion in revenue and is forecast to hit $433 billion by 2021. The aftermarket employs over 4.6 million people in the United States. These numbers lend themselves to consolidation as a fact of life in the aftermarket.
The backbone of the industry – the technician turned shop owner – is now seeing retirement and succession. Many middle-aged shop owners are looking to grow and add stores. They recognize that economies of scale will help them grow their sales, profits and compete with the large national chains. Call it consolidation or succession, the opportunities for buyers and sellers will grow as independents, private equity and large corporate service chains look to grow their market share.
Consolidation is a win for the seller and buyer, yet business models will change as technology advances will predicate new ways to diagnose, market and train the workforce and engage with the customer.
The independent service professional will have big opportunities to grow their store count and scale their business model by becoming a smarter leader, marketer and staying on top of technology. Suppliers and coaching companies will support the independent’s growth and help them find access to capital.
As new technology is embraced, AAPEX is the place to stay on the cutting edge with the new tech that will shape the future like Embedded Software, Advanced Driver Assistance Systems (ADAS), Augmented Reality, Vehicle Connectivity and Autonomous Vehicles.
Some will not keep up and will be targeted for their location. Aggressive shops will find great opportunities to grow as long as their team, culture, processes and finances are in order.
To attend the Service Professionals Summit, make sure to register for AAPEX.
Data courtesy of Schwartz Advisors