COVID-19 and Its Impact on the Auto Repair Industry

COVID-19 affected every single industry on the planet, from construction to agriculture. That includes the auto repair industry. The truth is that automotive shops were affected more than quite a few other businesses, and the repercussions are not yet finished. 

Understanding how the auto repair industry has been affected and how the ongoing complications of the pandemic will affect business owners, mechanics/technicians, and consumers is important. 

In this post, we will explore the many impacts of COVD-19 on the industry as a whole and how things are changing as the pandemic loosens its grip.

The Initial Impact of COVID-19

Like most industries, the auto repair industry hit the brakes hard with the initial onset of COVID-19. Repair shops across the country found themselves with little or nothing to do, at least in terms of consumer-facing work. That trend only accelerated as more and more businesses sent their employees home and more areas recommended limited travel.

  • Limited Travel – With most people working remotely and few people getting out and about beyond travel necessary for survival (grocery stores and the like), fewer people required service on their vehicles. This put an immediate halt to most maintenance-related services like oil changes, tire rotations, new tire sales, etc.
  • Limited Money – With more people out of work, money became tighter and people were less likely to spend on things like auto maintenance and repair. Many families were forced to hold onto as much money as they could to make ends meet while one or more of the earners were out of work, while others were forced to dip into what little money they had put aside. 
  • Limited Availability – The automotive repair shops that remained open were forced to institute strict limits in terms of the number of customers that could be in the waiting areas, on the service drive, or in the showroom. They were also forced to consider just how many mechanics/technicians could be in the shop at the same time, the number of service advisors on hand at any given time, and more. This created limited availability and affected each shop’s ability to serve customers.
  • Decreased Profitability – As the number of daily customers dwindled, automotive repair shops were forced to deal with a decrease in profitability. They met this challenge in several different ways, from reducing the number of employees on-site each day to furloughs and layoffs. In some cases, repair shops were forced to close their doors permanently as the owners sold to pay their debts.

However, while much about the pandemic was bleak, there were some bright spots. Many auto repair shops emerged largely unscathed, and others were able to grow their businesses during this unprecedented time. 

How did they manage such a feat? What changes were necessary to allow repair shops to not just stay afloat, but to improve their profitability? 

We will discuss that and more in the next section.

Less Maintenance and More Big Orders

With the decrease in driving, fewer people need regular automotive maintenance. However, many automotive repair shops found that they were able to sell larger orders and more expensive repairs than before. How does something like this happen in a time when more people are forced to pinch every penny?

Part of this trend has to do with reduced driving. Because people are driving less, they visit the repair shop fewer times per year. When they do come in, they’re trying to take care of multiple issues at the same time, rather than scheduling one service today, another next month, and so on.

So, rather than coming in for an oil change and a tire rotation this month, and then scheduling a brake service for next month, and then their 60,000-mile service the month after that, many consumers combined everything in one go. This resulted in larger service tickets and more work at one time.

Improved Sanitation and Cleanliness

Let’s face it – mechanic shops are never the cleanest of places. Brake dust, oil, exhaust particulates, transmission fluid…these are just the tip of the proverbial iceberg. How were businesses where grime was part of the everyday experience supposed to come to terms with the need to clean and sanitize everything to prevent the spread of the novel coronavirus? 

Despite the seemingly insurmountable challenge, many repair shops rose to meet it. How, though? Here are just a few of the ways that they were able to improve cleanliness, sanitation, and employee/customer safety.

  • Gloves – Gloves have been part and parcel of the mechanic/technician experience forever, but they are usually only worn in the garage while working on vehicles. Forward-thinking shops realized that gloves have a role to play throughout the rest of the business, too, from the parts counter to the service drive. 
  • Facemasks – Facemasks have been shown to reduce the spread of COVID-19, and shops that were able to enforce mask-wearing by employees were able to create safer environments while telling customers and employees that they valued their health. 
  • Contactless Drop-off and Pick-up – Enforcing social distancing rules was challenging, but many repair shops were able to institute contactless drop-off and pick-up procedures. This allowed customers to leave their vehicles for service and communicate their needs to service writers without ever having to speak to someone face to face. Pick-up was handled the same way.

Improved Technology and Better Transparency

Another factor in how some shops were able to improve their profitability lies in their steps to improve the technology available to their mechanics and customers, as well as the transparency with which they communicated with their customers. 

Touchless technology and processes became the rule with the pandemic. Almost every service was transformed – grocery stores began offering curbside pickup and at-home delivery. Warehouse stores like Sam’s Club and Costco began offering more and more items available for online ordering and at-home delivery. Food delivery services rolled out contactless delivery and payment options. 

Many shops were able to implement similar strategies with the help of digital technology. Remote kiosks, call-in service, remote pick-up, text message notifications of service completion – these are just a few of the ways that shops were able to harness technology to deliver safer customer service.

Technology also played a role in improving transparency and driving better sales for many shops. With many digital service offerings, it is possible to include images as well as text-based explanations of service recommendations and problem areas. For instance, it is possible to include pictures of worn rotors with an explanation of why resurfacing is needed. This increases transparency and improves the customer’s understanding of what is necessary, both of which feed into increased sales.

Community Outreach

Another reason for the success some repair shops have seen while others have not is a new focus on community outreach. By providing and promoting discounted or free service to essential workers, these shops were able to boost their branding and increase positive publicity. 

Hiring Experts

With some repair shops closing their doors and others laying off mechanics/technicians, it became possible for other shops to hire top-tier talent and deliver a better experience to their customers. 

The Ongoing Effects of the Pandemic on Automotive Repair Shops

Today, the pandemic has largely eased. Vaccines have been rolled out, different variants have arisen and then subsided, and we may be seeing the back end of things. Most regions in the US have begun relaxing their COVID requirements, too. 

However, while that’s good news, it does not necessarily mean that the impacts of the pandemic will vanish overnight. You only need to look at the increasing global inflation and ongoing supply chain problems to realize that it will take many years for things to begin returning to normal.

How is this situation affecting auto repair shops? There are several things to know here, including:

  • Parts Availability – As the world shut down to protect people against COVID-19, manufacturing also slowed and then stopped. The immediate effect was that replacement parts for vehicles were no longer being manufactured. While demand was low, this was not an issue, but demand has skyrocketed while production has only now begun to restart. The result is limited parts availability for many vehicles spanning everything from brake pads to catalytic converters.
  • Supplies Availability – Supplies are necessary for auto repair and service. We’re talking about things like oil and transmission fluid, but also washers and gaskets, brake cleaner, shop towels, and so much more. The same factors affecting the global availability of parts are affecting the availability of supplies, creating scarcity, and limiting availability to consumers and businesses.
  • Increasing Costs and Rising Prices – Rising prices go hand in hand with increased scarcity. This forces auto repair shops to raise their costs to customers, adding to the already problematic inflation that is affecting every country around the world.
  • Increasing Demand – Finally, some nations are experiencing dramatically increased demand, largely first-world nations like the US. However, other nations are still largely on lockdown because of a lack of access to vaccines and other treatments for COVID-19. Many of these countries are also responsible for manufacturing the parts and supplies required in the auto repair industry. The result is a huge spike in demand without an appreciable uptick in production. 

2021 and 2022: Explosions in Service Demand

As the pandemic loosened its grip and areas of the US let go of social distancing requirements, more people have felt comfortable getting out and about more. With the surge in road traffic also comes a dramatic increase in the need for automotive service. 2021 saw an initial spike in demand, and 2022 is expected to outstrip that by a significant margin.

However, auto repair shops must be prepared for the realities of the new world in which we live. There will be no large-scale return to the pre-pandemic “normal.” What does this mean moving forward?

  • Social Distancing Will Remain – While there may not be any official guidelines from the CDC or local/state governments regarding social distancing, you can expect a significant number of customers to remain wary of crowded waiting rooms and congested spaces. Auto repair shops that can provide ample personal space and limit the number of people on the service drive and in waiting areas will be able to ease these worries.
  • Masking – You can also expect many people to continue wearing masks and to feel more comfortable around others who wear them. Not only was masking effective at reducing the spread of COVID-19, but it played a significant role in reducing annual flu cases, as well as other airborne diseases. Because of this, many people will continue wearing masks long after the pandemic is finally beaten. Auto repair shops can welcome these customers and even ease their minds by ensuring that service writers and mechanics mask up while interacting with them.
  • Digital Technology – Digital technology, such as contactless drop-off and pick-up, will continue to play a role in this industry. Consumers have come to expect and value these options and they will gravitate toward businesses that retain them even after the pandemic wanes.

In Conclusion

The pandemic has cost the lives of millions of people. In the US alone, almost a million people have died at the time of this writing. It has also ushered in tremendous upheavals at all levels of society. The auto repair industry has been one of the hardest hit, with many businesses forced to lay off employees or even close their doors permanently. The global supply chain responsible for ensuring part and supply availability has also broken down. 

However, there is hope yet. Many automotive repair shops have not only remained open but found ways to thrive in this strange new world. And, as COVID retreats and we begin to reemerge into the world once more, demand for services and repairs will skyrocket very quickly. Auto repair shops must be prepared for the rise in demand, as well as the new expectations their customers will have regarding things like digital/touchless technology, masking, social distancing, and more. 

Source:

https://www.ratchetandwrench.com/articles/11381-how-has-covid-19-impacted-shop-productivity

https://ccautobody.net/how-has-covid-19-changed-driving-traffic-and-auto-repair/

https://www.integrity1auto.com/the-effects-of-covid-19-on-the-automotive-industry/

https://www.vehicleservicepros.com/service-repair/the-garage/blogs/blog/21232517/guest-blog-how-successful-auto-repair-shop-owners-adapted-to-covid19

https://www.ibisworld.com/united-states/market-research-reports/auto-mechanics-industry/

https://inrix.com/blog/impact-of-covid-on-the-auto-parts-repairs-and-insurance-industries/

https://www.tekmetric.com/blog-post/tm-500-one-year-later

https://blog.boltontechnology.com/auto-repair-shop-covid19-safety-precautions

https://www.tekmetric.com/blog-post/8-ways-to-adjust-your-auto-repair-business-strategy-for-covid-19 

Written by Strut Daddy's

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