Why is the auto industry positioned for growth in the coming years ahead? Aspects of current trends touched upon in this year’s Auto Franchise Industry Report offer a detailed view of why automotive franchising is growing in demand across the nation.
What about the current auto market stands to benefit auto franchising? New vehicle sales rates in a recessionary economic climate. In recent years it’s no surprise that new vehicle purchases have steadily slowed due to consumers choosing to work with their current vehicle even longer, increasing the number of miles on the car and needed repairs instead of forking over additional funds for a new vehicle.
This necessity-based decision on the part of many US consumers, with what’s compulsory taking the focus rather than what may be preferred, obviously leads to fewer car sales and what’s more, these sales rates may not return to pre-recession status anytime soon. How the economic climate will affect car purchases cannot be known indefinitely, yet in the years ahead consumers appear even more likely to polish up their existing vehicle rather than move on to a new one.
In the coming years, the auto franchise industry focused on vehicle repair, maintenance, and performance will thus benefit from increased consumer interest in vehicle care rather than a replacement focused mentality. Other key drivers for auto franchising that are promising for further industry growth include favorable economic shifts that bolster employment rates and personal income available to consumers.
Even though recent technology has promoted production of vehicles that may require less frequent repairs, longer lasting vehicles means even more attention paid to any potential repairs that happen to come up, as they inevitably do as cars are driven month after month. Additionally, assets to any automotive franchise system are teams dedicated and regularly trained to work on newer technology built vehicles that may require more expertise to repair. If auto franchisors boost efforts to train and educate professionals at service locations they can better assist consumers seeking repairs for their newer designed vehicles. This may be one key consideration for potential auto franchisees when looking into certain franchise concepts.
Cars exceeding their warranties will need experienced and capable auto professionals to repair or maintain them as years pass. The auto mechanics industry is set to reach $54.7 annual revenue by 2017 according to IBIS World, with a recently published five year outlook report focused on positive growth for the auto world. Consumer “willingness to spend” is emphasized as a driving factor behind positive growth and increased consumer annual revenue is at the core of this shift.