How Big Is the Auto Repair Industry?

The Total Car Care aftermarket is experiencing tremendous growth, priming AAMCO franchise owners for success

According to IBISWorld’s “Auto Mechanics in the US” market research report, the auto repair industry generates $63 billion in annual sales. The fact that no single brand controls more than 10% of the market share means AAMCO car repair franchises have a lot of room to leverage our iconic brand into a bigger share of the Total Car Care market.

The Center for Economic Vitality at Western Washington University reports that the transmission repair industry makes up about 6% of the auto repair industry at large. The fact that our bread and butter comes from transmission repair work means that our owners will have two significant revenue streams by becoming competitive in the Total Car Care market.

How we plan to win market share in Total Car Care

Inside our automotive repair franchises

By diversifying our services and leveraging our expertise in transmissions into Total Car Care, we believe our automotive repair franchises can gain significant market share. The Total Car Care market is essential to our strategy for growth, and it meets the need indicated by industry trends. In 2016, Statista reported that there are a record-setting 260 million cars on U.S. roadways, and that Americans are keeping their cars longer. The same paper reported that the average age of cars is 11.6 years — and they’re just getting older. The growing number of older cars means more opportunities for AAMCO franchise owners to make a profit.

Buy an AAMCO franchise for sale!To help our franchise owners get a bigger slice of the $63 billion general automotive repair aftermarket, we recently launched our “Trust” campaign to expand the public’s perception of what we do. After all, if we are trusted to fix the most complicated part of a car, we can surely change our customers’ oil, fix their brakes, and rotate their tires.

We exclusively repaired transmissions until 2004, and transmissions still account for 65% of our business revenue, according to our internal data. Now that we have expanded our services to include Total Car Care, we are beginning to experience a sea of change. In 2016, we performed more TCC services than transmission repairs, and we expect that number to rise as we continue to advertise in national and local markets.

Our specialization in transmission repair works to our benefit

Transmissions are the most complicated part of a car to fix, and thus the most expensive, so customers come to us knowing they are going to be making a big purchase. Now that we have expanded our services to include Total Car Care, we hope to win our customers’ trust and perform all of their car maintenance.

The average customer ticket for service with AAMCO is $855, which is driven by the fact that a transmission repair typically costs about $2,500.

Because our iconic brand drives our transmission business, customers will almost certainly visit an AAMCO when their transmission acts up. Now that we offer Total Car Care, that customer can keep coming back — and those repeat visits can add up to substantial revenue for AAMCO franchisees.

Overall, the average consumer spends $790 a year per vehicle on repairs, according to Consumer Reports. Historically, much of that spending has gone to other brands. AAMCO only worked on transmissions until the mid-2000s, so customers were forced to look elsewhere for routine maintenance and other mechanical issues. To be frank, we were letting a lot of financial opportunity walk out our doors by sending customers elsewhere for other services. No more. Total Car Care is a fast-growing part of what AAMCO franchisees now offer — non-transmission revenue is growing at a double-digit rate, while transmission repair revenue has grown more slowly.

 

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