How Big Is the Industry?

The worldwide leader in transmission repair prepares for the future

As the U.S. auto repair industry booms at $67 billion annually, the industry is experiencing its most dramatic shift in decades — and only AAMCO is prepared for it.

While consumers have warmed up to the technological enhancements in their cars, the auto repair industry is starting to panic. We live in an age when cars are more and more like computers — a point that Google proved when they sent a self-driving car across the country to provide better GPS navigation. While electric and hybrid vehicles were the punchlines for comedians a decade ago, they now are quickly becoming mainstream, with over 4 million on the road. As with anything, eventually, these cars need to be fixed.

In a revealing article published by The Chicago Tribune titled “Will Electric Vehicles Doom Your Neighborhood Auto Mechanic?” auto repair shops are not at all prepared to meet the next generation of cars, determining that, “they are not prepared for the end of gas-powered transportation.” This means that many brands are going to be scrambling to change their business models:

Independent auto shops — of which there are more than 160,000 in the United States — have always relied on minor repairs, such as oil changes and new tires, to get customers in the front door. To many a car owner’s surprise, one minor repair often leads to a series of others, giving auto shops a chance to make more money and establish a rapport with customers that can serve them for years. Electric vehicles threaten to upend this income stream.

The shift to electric and hybrid vehicles is happening faster than the experts predicted. According to an article published by The New York Times titled “When Will Electric Cars Go Mainstream? It May Be Sooner Than You Think,” the barriers that previously excluded the majority of Americans from buying electric and hybrid vehicles — limited battery life and the expensive price tag — are no longer there. The car industry, spurred by global governmental regulations, incentivizes electric and hybrid vehicles, and advancements in technology have reduced the costs for consumers significantly.

“There are signs of a shift. Tesla and Volkswagen each has plans to produce more than a million electric vehicles per year by 2025,”  the paper reports. “Volvo announced that it would phase out the traditional combustion engine and that all of its new models starting in 2019 would be either hybrids or entirely battery-powered.”

Why is AAMCO the one brand getting it right?

Unlike the majority of auto repair shops, AAMCO franchise owners have never relied on minor repairs. For over 50 years, AAMCO has been the worldwide leader in transmission repair, one of the most complicated and most expensive parts. Today, it costs between $2,800 to $3,800  for a rebuilt transmission and up to $8,000 for a transmission replacement, and AAMCO franchise owners enjoy the luxury of high tickets and the ability to thrive on a much lower car count than traditional auto repair shops.

While AAMCO will continue to dominate the transmission segment, we are doing the exact opposite of what our competition is doing: taking action to become the dominant brand for complex car repair.

“One of the benefits of being a leader in the auto repair aftermarket is that we have lead time to prepare for the cars on the road,” says Jim Gregory, President of AAMCO. “We service cars that are 10 or 11 years old. We know that while hybrid and electric vehicles make up only 2 percent of the cars on the road now, in five years there’s going to be explosive growth in hybrid and electric vehicles. As the industry leader in technical complexity and hard-to-fix repairs, we’re perfectly positioned to take advantage of that opportunity.”

Our franchisees are sending their technicians to AAMCO University, our state-of-the-art training facility in Newnan, Georgia, for hands-on training in electric and hybrid vehicles.

“AAMCO University is here for the benefit of our franchisees and their technicians, as we want them to be prepared to fix the most complex parts of the vehicle — including hybrid and electric vehicles, CVT transmissions and the entire powertrain,” says Bruce Chidsey, Vice President of Technical Support for AAMCO. “We’ve already provided hands-on training to hundreds of our technicians over the past few months. Other brands do not have the technology, the knowledge or the skill set to service these vehicles, and so they send them to the dealer. In many cases, AAMCO is better than the dealer. Today, there are 56 computers in a vehicle. And by 2022, one of every five vehicles will have some sort of electrical propulsion proponent. It’s essential that a consumer comes to a brand that understands the technology behind these vehicles and how to fix it.”

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