Americans have a deep-seated love for their cars. Beyond mere transportation, vehicles are woven into the fabric of American history and daily life. A simple drive through any town in the USA reveals the ubiquity of auto repair shops and dealerships, catering to everything from routine oil changes to complex diagnostics and bodywork. This raises a crucial question for anyone involved in or observing this sector: how big is the auto repair industry really? Let’s delve into the automotive statistics that reveal the impressive scale and scope of this essential industry.
Auto Repair Industry Market Size and Statistics
The auto repair industry is a significant economic force, and the numbers clearly illustrate its magnitude. In North America alone, the automotive repair market reached a staggering $78.4 billion in 2022, according to Allied Market Research. This substantial figure underscores the vital role the industry plays in keeping America moving.
Data from industry analysts at IBIS further emphasizes this point, showing that in 2021, 15 million new cars were registered in the U.S. While still below pre-pandemic figures, this number indicates a steady growth in the vehicle fleet requiring maintenance and repair services.
Nationwide, the auto repair industry is composed of a vast network of businesses. Currently, there are 282,637 automotive repair companies operating across the United States, employing 614,433 individuals across various specialized roles. Looking ahead, the industry is projected to maintain a robust growth trajectory, with a Compound Annual Growth Rate (CAGR) estimated at around 7% through 2030.
On a global scale, the automotive repair industry’s market share is even more impressive. In 2021, it reached $789.8 billion worldwide and is forecasted to skyrocket to $1.6 trillion by 2031. This global expansion represents a CAGR of 7.6% from 2022 to 2031, signifying the industry’s increasing importance in the global economy.
Factors Driving the Auto Repair Industry Growth
Several key factors are fueling the consistent growth of the auto repair industry, particularly in the U.S. market. These factors point towards sustained demand and expansion in the coming years.
One primary driver is the increasing number of motor vehicle registrations. As more people own vehicles, the demand for maintenance and repair services naturally rises. Vehicle registration in the US has been on an upward trend, increasing by 0.9% annually from 2017 to 2022. This ongoing trend is supported by population growth and rising income levels.
Rising disposable income per capita also plays a significant role. As incomes increase, families are more likely to invest in professional auto repair services rather than attempting DIY maintenance. This shift towards professional services benefits auto repair businesses and contributes to industry growth.
The increasing average age of vehicles on the road is another crucial factor. Due to improvements in vehicle quality and financial decisions influenced by events like the 2008 crisis and pandemic-related supply chain issues, people are holding onto their cars for longer periods. The average vehicle age now stands at 12.3 years and continues to climb. Older vehicles inherently require more frequent and extensive maintenance and repairs, directly boosting the demand for auto repair services.
Furthermore, declining new vehicle sales in certain periods can also contribute to auto repair industry growth. When new car sales decrease, people tend to keep their existing vehicles running longer, further increasing the need for repair and maintenance.
Finally, the increased average number of miles driven annually by vehicle owners directly correlates with wear and tear, leading to a greater need for auto repair and maintenance services.
Common Auto Repairs and Maintenance Services
Maintenance services form the backbone of the auto repair industry, addressing the normal wear and tear of vehicle components. These services are essential for extending vehicle lifespan and ensuring roadworthiness. They typically involve replacing Original Equipment Manufacturer (OEM) parts with aftermarket parts designed for longevity and performance.
The most frequently requested maintenance services include:
- Oil changes and filter replacements
- Wiper blade replacements
- Air filter replacements
- Scheduled maintenance services (e.g., 30k, 60k, 90k mile services)
- Tire replacements and rotations
- Battery replacements
- Brake pad replacements and rotor resurfacing
- Antifreeze and coolant services
- Engine tune-ups
- Wheel alignment and balancing
Among these, oil and filter changes are the most common service, projected to generate $9.9 billion in revenue in 2022 alone. The oil change service sector has experienced a 5.3% growth over the past five years and is expected to continue expanding in the coming decade, reflecting the consistent need for routine vehicle maintenance. With more vehicles on the road and the average vehicle age increasing, the demand for these essential maintenance services is poised for continued market growth.
The Cost of Auto Repair: Most Expensive Repairs
While routine maintenance constitutes a large volume of services, certain auto repairs can be significantly more expensive. Engine replacement stands out as the most costly type of automotive service. This high cost is attributed to both the price of engine parts and the extensive labor required for removal, replacement, and reassembly. Depending on the vehicle manufacturer and engine type, an engine replacement can range from $5,000 to upwards of $20,000. Although these major repairs are less frequent than routine maintenance, they represent a substantial part of the industry’s revenue.
Despite the high cost of major repairs, the consistent volume of routine services like oil changes and brake jobs ultimately generates more stable and predictable revenue streams for auto repair shops. These high-volume services are crucial for maintaining consistent business and effective inventory management for auto shops.
The Impact of Electric Vehicles on the Auto Repair Industry
The rise of electric vehicles (EVs) has sparked discussions about the future of the auto repair industry. Boston Consulting Group (BCG) forecasts that electric vehicles will become the dominant passenger vehicle type by 2028, significantly sooner than previously anticipated. This shift is driven by government incentives, expanding charging infrastructure, more affordable EV models, and advancements in battery technology offering greater range.
While the increasing popularity of EVs might raise concerns about the relevance of traditional auto repair shops, the reality is more nuanced. Electric vehicles still require many of the same services as internal combustion engine (ICE) vehicles. EVs need brake service, tire replacements, automotive glass repair, and collision repairs just like any other car.
Auto repair shops will need to adapt to the changing automotive landscape. This includes investing in specialized training and equipment to service EVs effectively. However, the transition to EVs also presents new opportunities for auto repair businesses. As the EV market grows, specialized EV repair services will become increasingly in demand, offering a new avenue for growth and specialization within the industry. The automotive industry is undergoing a significant transformation, but the need for skilled auto repair professionals will remain strong, albeit with evolving skill sets and service offerings.
Take the First Step to Better Auto Repair Marketing with Broadly
Understanding how big is the auto repair industry highlights the immense potential within this market. To thrive in this dynamic environment, auto repair businesses need effective marketing and operational tools. Broadly offers automotive repair tools and auto repair marketing solutions designed to enhance productivity and profitability.
Broadly helps businesses build a strong online reputation by simplifying review management from platforms like Google and Facebook into a single, user-friendly platform. Automated review requests encourage satisfied customers to share their positive experiences, and instant notifications ensure timely responses to all feedback.
Increase customer conversion with AI-powered web chat and centralize communications from various platforms into one unified Inbox. Broadly integrates seamlessly with over 500 shop management applications, enabling data-driven decisions that impact your bottom line.
Broadly streamlines marketing efforts with step-by-step tools to attract more customers. Payment processes are also simplified with automated invoices sent directly to customers’ phones and convenient mobile payment options. Running a successful auto repair business is challenging, and Broadly aims to alleviate some of these burdens.
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