What Is AAMCO Transmissions?
An iconic American brand for the past 50 years, AAMCO is entering a new era of leveraging expertise on transmissions into Total Car Care
For half a century, the American public imagination has linked the word “transmission” to AAMCO, and for good reason. Our proven expertise in fixing the most technically challenging part of a car is heralded far and wide, and as a result, we remain the leading brand for transmission work. To help our franchise owners get a bigger slice of the general automotive repair market, which generates $63 billion a year in sales according to IBISWorld research, 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.
AAMCO has spent the past half century as the worldwide leader in transmission repairs. Since our founding in 1962, we have serviced more than 45 million vehicles, and we have nearly 650 franchised locations in North America. Our legacy brand continues to thrive. Entrepreneur magazine has consistently ranked us as a top choice in its annual Franchise 500 rankings of franchise opportunities. We are also an iconic brand that customers know. We recently hired a marketing firm to measure how well the public knows our brand, and 73% of people surveyed recognized us as the leading brand for transmission repair. This is no accident: we’ve spent five decades building customer trust through our “Double-A-BEEP-BEEP-M-C-O” marketing campaigns.
AAMCO is the world’s largest and top-rated transmission repair franchise, and we offer Total Car Care at hundreds of top automotive franchises throughout North America. We have been an iconic brand for more than 50 years, and we are attracting new franchisees by simplifying the process of owning, staffing, and running an auto repair franchise.
A significant evolution in the transmission repair franchise business
One of the major benefits of having been an iconic brand for the past 50 years is that AAMCO has proven its ability to win over several generations of customers and adapt to the changing times. For instance, compared to past decades, it’s harder today to find skilled mechanics to work on transmissions. That’s a major challenge for many in the industry and a big reason that a lot of repair shops refer work to AAMCO. We’ve solved this problem.
To do that, we built a 200,000 square foot remanufacturing facility adjacent to our training center — AAMCO University. Rather than hiring a builder, our franchise owners can now purchase a high-quality remanufactured transmission from our state-of-the-art transmission remanufacturing facility. We can get a remanufactured transmission to over 70% of our franchisees the next day. This gives our franchisees immediate access to a vertically integrated supply chain with preferred pricing on our core transmission category, and helps our franchisees keep their costs low while they are focusing on increasing their profitability in the Total Car Care segment.
AAMCO franchisees can still hire builders at their locations, but many franchisees are finding success, while keeping costs lower, by utilizing our remanufacturing facility. The total time lapse for the customer repair is the same or faster, and doing it this way frees up space in the repair bay, allowing franchisees to serve more customers. It also allows franchisees to go builder-less, which frees up resources to reinvest in their in-store labor hours to hire certified general automotive mechanics and drive more growth from the Total Car Care categories.
Rise of Total Car Care and what it means to our transmission repair franchise owners
Up until the early 2000s, we focused exclusively on being a transmission repair franchise. Today, transmission repair still accounts for the majority of our revenue, but we are beginning to experience a sea of change with our expansion into providing Total Car Care. In 2016, 66% of our customers visited us for Total Car Care, up from 60% in 2014. We expect that number to rise as we continue to advertise in national and local markets.
By leveraging our expertise in transmission work to extend to Total Car Care, we believe we can win a significant piece of the overall market share. That’s important, given that in 2016, Statista reported that a record-setting 260 million cars are on U.S. roadways. And those cars are older. The same paper reported that the current average age of cars is 11.6 years, and trends indicate that the average age will just get older. It’s simple: the growing number of older cars means more opportunities for AAMCO franchise owners to make a profit.
Now is a great time to invest in an AAMCO franchise. We’ve developed a five-year plan that allows us to leverage our 50-year heritage and create lifelong customers for our AAMCO franchise owners. The average customer ticket for service with AAMCO is $855. Overall, the average consumer spends $790 a year per vehicle on repairs, according to Consumer Reports. With the average vehicle on the road more than 11.6 years and the average driver having six cars over their lifetime, that adds up to more than $54,000 in lifetime spending on vehicle repair. If you factor in the fact that most households have two vehicles and they generally take them to the same place for maintenance, the lifetime value of a customer balloons to about $105,000. We have core brand positioning for growing our transmission business, and we are having terrific results expanding into Total Car Care. We are confident that we are a brand with staying power.