Trends In The Automotive Business.

[CoolBlueSS]

I've been in the automotive business now ending my 22nd year this month, and alot has changed over that time. Our business has been slow lately, due some to the economy, and some to competition. So, we've been actively calling on customers to try to get business back up. What we're finding is a bit interesting.

 

Number 1, DIYers are a dying breed. I'm talking as a whole. I know we have alot of DIYers on here, but we make up a small percetage of car owners/consumers out there. I learned alot from my dad, and grandfather, as I'm sure alot of you did. But I guess cars are getting more complicated. Let's face it, we are a dying breed, but let's keep it alive.

 

Number 2, car/trucks seem to require less routine maintainence. 100K mile plugs, no distributors, no fuel filters. Warranty repairs are alot less than they were 10-15 years ago, so believe it or not they are made better.

 

Number 3, too easy to buy a new car. with all the 0% deals, and employee pricing that was going on no one repairs their car. Alot of shops I've talked to have a hard time selling an A/C job, or even big brake jobs. People would rather trade it in than put $500-1000 in a 4 year old car, in parts of this market anyway. Kind of crazy, imo. Maybe some like to live in debt.

 

Anyway, sorry for the long post. Just bored at work and been doing some thinking/speculating lately. I know we have some parts people, and techs on here. What's up in your area? Thoughts/opinions?

[Tyler's Touch]

I observed the same thing when I was working FT at a Chevrolet dealership, definitely true!

[BOB47]

Something I've noticed over the last 10 years or so is that all the companies are almost making the cars too good. I know that sounds weird but for those of us that remember the cars of the 60's and 70's. They were mostly junk. Designed to only last 3-5 years. Bodies were made with cheap steel that rusted through in 2-3 years. Ziebart didn't help much. Sometimes made it worse. Engines were easy to work on but very inefficent and prone to major problems if they weren't maintained properly. 1 year, 12,000 mile warranty was the rule.

 

This was all very good for the Big 3 because you needed to replace your car every 3-5 years on average. As an example, I had a 1971 Mercury Comet that had a straight 6 and no power anything. Had an a/m radio with 1 speaker in the dashboard. Cost around $3000.00. By 1974 I had to open the hood and drop a screwdriver across the starter solenoid to get it to start. The rear wheel wells had rusted completed through so bad that my rear seat got wet when it was raining. I had to reset the points (which you could do with a matchbook cover) about once a month and replace them completely approx every 5-6 months. If you got 25,000 miles on a set of plugs you were doing great. Exhaust system rusted through at about 2 years. Front suspension was completely shot. Finally junked it in 1975 for $35.00. All this before the car was 5 years old.

 

My SSS is coming up on 5 years old. Not a spot of rust. Few minor engine/drivetrain problems. Original plugs. Other than oil changes and some performance mods, nothing has needed to be replaced. Still looks as good and runs as good (better) than the day I picked it up. Good for me, bad for the auto companies. No need to buy anything new.

 

Competition from foreign automakers made them step up, but it's really a double edged sword. Better, longer lasting cars = less new cars sold. I don't want to go back to the old ways by any means but it was better for the auto companies profit margin.

[hot rod truck]

I've been in the automotive parts field for 30+ years and boy has it changed. Cars are certainly made better than 30 years ago. They are technologically advanced to the point most people cannot do their own repairs. Most people are only able to perform basic maintenance such as an air filter change or oil change (some cars require a lift to access the oil filter) and appearance items such as waxing and detailing.

 

DIY havens like Autozone, Advance, O'Reilly are actively pursuing professional repair facilities as they will not survive on the DIY market alone. Unfortunately, there is a trend towards consumers wanting cheaper auto repair and the parts that are being sold are not necessarily OE or better parts. We own top of the line Chevy trucks that most of us will not settle for any inferior parts, but I can get you rotors for these trucks imported from China and sell them to you for just under $30.00 each. Brake pads front or rear for under $30.00 a set. Now if you want the Delco OE pad that the truck left the factory with, they'll be just north of $100.00.

Delco OE rotors are just south of $100.00 each.

 

Now most consumers are not going to pay for the higher priced parts and they have a decision to make. Repair the vehicle with the less expensive parts or trade the vehicle and get a new vehicle with a new bumper to bumper warranty and not have to deal with needed repairs. Now the repair facility, dealer or independent, loses another customer for a minimum of 3 years as the new vehicle will only need basic maintenance, oil changes or maybe warranty issues but not customer pay items.

 

A customer of mine , shop owner, summed it up pretty well in a discussion we had about the lack of business. Most shop labor rates are $70.00 per hour and up (depends where you live). If his customer can pay his shop labor rate, for most of them, they can afford a new car payment. The customer who can't pay the labor rate is not bringing their car to his shop.

He would like to be able to find the person that purchases the old car and get them to his shop. This rarely happens as so many vehicles are now sold by dealers at auction and sent to other parts of the country, never to be serviced locally again. Another issue he sees impacting repairs are the used car extended warranties. The warranty companies dictate the price they will pay for repairs, including the price of the part. The warranties don't pay for a lot of items that the consumer thinks it does cover. Now you have a customer who doesn't have the money to pay for a repair, but spent a nice chunk of change for a warranty that really is not that great. The shop now has to try to negotiate with the customer for the uncovered repair or the part of the repair that's not covered by the warranty. Imagine trying to get that customer to become a repeat customer at your shop.

 

The only part of the market that seems to remain strong is the accessory aftermarket. If you can bolt, glue, hang or double sided tape something to a vehicle that gives the owner the warm fuzzies, it sells.

 

Sorry for the long rant

Edited December 8, 2007 by hot rod truck (see edit history)

[CoolBlueSS]

Very good point, Brian. I have always used quality parts on my vehicles, because there is a difference. People in the know, know this. I've tried to explain that to customers for years. There raeely is a difference between an AC/Delco sensor, and a Niehoff besides price. Or that there is a difference between this $100 set of GM pads, and a "White Box" set for $20. Most people don't know, or don't care, about the diffent brands. They just want cheap.

 

I worked in the aftermarket at a mom and pop auto parts, and a short stint at O'reilly (hated that job, btw), as did a co-worker here at the dealer I work for. We've both been in the business the same amount of time, and during the same time period. He labels the Autozones, and O'reillys as selling "White Boxes". Selling the cheapest crap they can find. They still have the quality stuff, but the end consumer would rather not spend that kind of money. This has pretty much killed the good ol' mom and pop stores.

 

We've also started directing more of our business towards accessories on the retail side. We need to take it where we can get it.

Edited December 8, 2007 by CoolBlueSS (see edit history)

[hot rod truck]

Hey Dwain,

 

I remember when white box was only available to Sears, Car-X, Midas, K-mart etc, big box mass merchandisers only, their private label, made only for them

 

I chuckle when I've had shop owners tell me about the wonderful advantages of using the retailers because they have lifetime warranties on their parts. I sell products that also have lifetime warranties but they are nationally recognized brands. I really don't emphasize lifetime warranty on a product line. I'm in the parts business to sell parts and know parts don't last a lifetime. They weren't designed to last a lifetime.

 

Lifetime warranty is a piece of mind warranty, doesn't mean the part is any better, most times it's not. I always ask, when does the lifetime warranty lose its luster, 2nd, 3rd or 4th time that you had to change it out. My jab at the retailers so-called name brands

Edited December 8, 2007 by hot rod truck (see edit history)

[SSleepingbeauty]

This has pretty much killed the good ol' mom and pop stores.

 

We've also started directing more of our business towards accessories on the retail side. We need to take it where we can get it.

 

The only problem with the retail side is, that you are now competing against the internet. Now days even people who aren't to savy about cars have the sources of online searching for parts and service.

 

I have attended many seminars on network marketing. And something that I once heard a speaker say that made alot of sense is "Either your business has to be online or you will be out of business" So even if someone has a small Mom & Pop business, they need to be online with a website to generate business or they won't survive.

 

Times have changed, and the traditional way of doing businees no longer works. Heck why even buy a car from a dealer after a test drive. When you can just go home from the comfort of your chair and find the best deal across the country and make your purchase. JMO

[Radioshop]

The only problem with the retail side is, that you are now competing against the internet. Now days even people who aren't to savy about cars have the sources of online searching for parts and service.

 

I have attended many seminars on network marketing. And something that I once heard a speaker say that made alot of sense is "Either your business has to be online or you will be out of business" So even if someone has a small Mom & Pop business, they need to be online with a website to generate business or they won't survive.

 

Times have changed, and the traditional way of doing businees no longer works. Heck why even buy a car from a dealer after a test drive. When you can just go home from the comfort of your chair and find the best deal across the country and make your purchase. JMO

 

I'd rather deal with the mom and pop parts place, but around here there are none and the ones there are don't have what I'm looking for. They also stock cheap parts. I want the good stuff. Even the NAPA down the street here doesn't have squat. I have to go their warehouse ten miles away if I want anything.

 

For example U Joints for a 77 Corvette. The local NAPA didn't have it, barely knew what a U Joint was. Once I got to the NAPA warehouse, I still had go through the book and read off the number for the "Parts Robot" to pull. I don't buy anything from behind the counter at the big box auto parts places.

 

Frankly, if I can put it off, I prefer to order from Rock Auto. Less driving around for me, better selection. Not only do they have the ball joint, but you can have a TRW, Moog or, Cheapo one. Not to mention, I don't have to teach the Parts Robot what a ball joint is. Or tell the Parts Robot that the 77 Corvette only came with a 350/5.7 engine.

 

Dealer part counters are a little better, but oh my are they mighty proud of their parts.

[wody]

Number 3, too easy to buy a new car. with all the 0% deals, and employee pricing that was going on no one repairs their car. Alot of shops I've talked to have a hard time selling an A/C job, or even big brake jobs. People would rather trade it in than put $500-1000 in a 4 year old car, in parts of this market anyway. Kind of crazy, imo. Maybe some like to live in debt.

 

this is very true. mechanics would make a lot more money if it weren't for this. people would rather buy a new car than have their "old" car fixed.