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The Automotive Aftermarket Industry Maintains a Bright Spot in the Franchise Community
According to R. L. Polk & Co. in its annual vehicle population report, the median age of passenger cars in operation in the U.S. increased to 9.4 years in 2008, breaking the previous two-year record high. In fact, analysts from J.D. Power, Deutsche Bank Securities, and Wachovia Capital Markets all estimate that auto sales in the U.S. declined as much as 43 percent last month in comparison to sales in March of 2008. What does all this mean to prospective franchise owners? With the economy still in a rut and more consumers keeping and maintaining their vehicles versus buying new, the automotive repair industry is a smart business choice for those seeking a franchise to own.
“We’ve noticed that the trend to purchase a new vehicle when a major part needs to be replaced has quickly dropped off. Instead, consumers are choosing to purchase the new motor, etc. for their car,” commented Louis Kibler, Vice President of Franchise Development for All Tune and Lube (ATL), a Maryland-based automotive service franchisor.
The automotive service and parts industry will enjoy solid sales of well over $200 billion this year. According to the Automotive Aftermarket Industry Association (AAIA), vehicle repairs cost an average of 34% more at car dealerships than at independent repair shops. Today’s vehicles are complex and consumers are busy, so seeking a one stop total care center that they trust is integral, particularly when consumers are keeping their vehicles longer than ever before.
All Tune and Lube is a great example of a franchise in this booming category which offers prospective franchisees a rock-solid franchise opportunity. The brand’s franchise locations feature preventive maintenance, oil changes, engine maintenance, tune-ups, brake and transmission servicing, air conditioning servicing, field injections and combustion chamber cleaning, transmission replacement, engine servicing and replacement, and a complete line of tires and related services.
An Industry That Shines Bright Today and Tomorrow
“People are holding onto their vehicles much longer and therefore, there is lots of business going to automotive franchises such as All Tune and Lube. We’ve found that although in the earlier quarters of 2008, people were afraid to spend any money, even on maintaining their vehicles, that spending freeze has now dissipated. Because some people procrastinated on getting maintenance done, they are now having repairs done to their cars. Repairs cost consumers even more money, so businesses like ours are benefiting,” Kibler commented.
ATL continues to watch the nationwide market demand, and increase its consumer offerings, which has kept franchisees and consumers happy. This past year, the franchise brand introduced a tire program which has done incredibly well because as gas prices went up, people became educated about how important good car and tire maintenance was for their vehicle and for fuel economy. These lessons will probably stick with consumers forever, and bodes well for the franchise concept.
Industry Experience is Not Necessary
As is the case with most industries within the franchise community, you do not necessarily need industry or small business experience to own an automotive franchise. Kibler said, “We can teach anyone to do this business. We have franchisees from education backgrounds. We have retired mechanics that are franchisees. We have some franchisees with small business ownership experience and many without any prior business ownership experience at all.”
With the economy crumbling and Corporate America downsizing, many professionals are choosing to buy a proven franchise in an industry that will endure today and tomorrow. “We are really pleased by the high quality franchisee candidates who are currently exploring our concept. Mostly, individuals are coming from Corporate America, and looking for more control and stability over their careers. Individuals with middle management experience tend to do well with our concept. We have had many new franchisees that recently lost their job come and join us. You do not need industry experience to do well with this business. We’re really just looking for smart individuals that want to take advantage of how strong and steady the automotive repair industry is now and in the future,” explained Kibler.
ATL offers franchisees a total business package for around $160,000. The company is involved with the VetFran program, and maintains strong relationships with 3rd party financing companies and equipment leasing companies. Their training and ongoing support programs are unparalleled. After training, the company sends an Operations Director to the new franchisee’s location, where they will get assistance in setting up their business. The Operations Director will help recruit, hire, and train the technicians and service staff, so franchisees are ensured a high quality staff from the beginning.
The Advantages of Choosing a Franchise
“Franchises benefit the most when an industry does well because we know how to market and advertise a brand nationwide,” explained Kibler. ATL has locations nationwide, and is known for its high-quality, trusted, and complete line of automotive services.
Kibler went on to explain that as unlikely as it may seem, if you have the financial resources and the will to succeed and prosper, a down economy like we are currently experiencing can be an ideal time to purchase a franchise; “Rent is lower than it has been in years. Interest is at its lowest rate in years. Plus, the number of high quality employees is higher than we’ve ever seen because so many car dealerships have closed. The licensed, experienced employees that worked at the dealerships are readily available at an affordable rate.”
He concluded, “The automotive repair and maintenance industry offers a business that makes sense in this economy and in every economy. The need for maintenance and repair is not seasonal, it is a service that is required by vehicle owners many times a year.”
