Learn about trends in the Auto Repair industry and find more information on how to start an Auto Repair Business. Don’t forget you can receive free or low-cost training and free professional business advice, from your local Small Business Development Center!
View our related business reports here: Automotive Industry Research
Get a free Auto Repair business plan template on our Business Plan page.
Auto Repair Business Forecast
The auto repair industry continues to experience steady demand as consumers keep their vehicles on the road longer. In particular, the average age of vehicles in operation has continued to rise, creating an ongoing need for routine maintenance, mechanical repairs, and replacement parts. Additionally, higher prices for both new and used vehicles may encourage consumers to postpone purchasing another vehicle and, instead, invest in maintaining their existing vehicles. As a result, auto repair businesses benefit from a relatively stable and recurring customer base. Furthermore, shops that develop strong customer relationships and provide transparent recommendations may be better positioned to generate repeat business and retain customer over time.
Looking ahead, the industry is expected to continue evolving as repair shops respond to changing consumer behavior, vehicle technology, and operating costs. For example, increasing parts and labor expenses may lead some customers to weigh the cost of a repair against the overall value of their vehicle, particularly when major repairs approach or exceed the vehicle’s market value. At the same time, advances in vehicle technology are changing the nature of automotive repair. Modern vehicles increasing rely on driver-assistance technology and other electronic components. These developments can increase complexity and costs of diagnosis and repair while creating opportunities for shops to service these newer vehicles. Overall, the auto repair industry continues to benefit from the recurring need for vehicle maintenance and repairs. Therefore, shops that employ skilled technicians, maintain strong customer relationships, and adapt to changing vehicle technology may be well positioned as the industry continues to evolve.
Here are some additional business resources specific to the industry:
- Automotive Service Association – Industry Resources
- Automotive Maintenance & Repair Association – News
- Auto Care Association – Career Tools and Resources
Auto Repair Business Industry Overview & Trends
NAICS Code: 811111; SIC Code: 7536, 7538
This automotive repair & maintenance industry summary is from First Research which also sells a full version of this report.
- “Companies in this industry provide repair and maintenance services for passenger cars and light trucks. Major US companies include Firestone Complete Auto Care (a unit of Bridgestone), Jiffy Lube, Meineke, Midas International, Monro Auto Service and Tire Centers, and Safelite Group.
- The global automotive repair and maintenance services industry is forecast to grow at 7.6% by 2031, according to Allied Market Research, driven by increasing vehicle production and growing demand from emerging markets, notably China and India.
- The US automotive repair and maintenance services industry includes about 162,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $115 billion.
- Competitive Landscape: Demand depends on miles driven and the number of cars on the road. The increased complexity of vehicles, which makes it more difficult for vehicle owners to perform do-it-yourself repairs, is also driving demand. The profitability of individual companies depends on convenient location and good marketing. Large companies can maximize use of expensive diagnostic equipment and have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by providing superior customer service or offering specialized services. The US industry is highly fragmented: the fifty largest companies generate less than 10% of revenue.
- Competition includes other venues that provide automotive services, including some gas stations, car dealerships, and branches of mass merchandisers, like Sears and Kmart.”
Auto Repair Business Technology
Technology is reshaping the auto repair industry. What was once considered a futuristic concept is becoming a reality, with autonomous vehicles emerging as one of the automotive industry’s newest innovations. As repair shops adopt new technologies, and artificial intelligence to improve their service operations, they must also prepare to maintain and repair vehicles that increasingly rely on advanced systems. Here is information on technology usage in the auto repair shops:
- GenAI in the Automotive Industry – Deloitte
- The Revolution of Automotive Service Scheduling with AI – Digital Dealer
- Vehicle ADAS Technology – Body Shop Business
For more information on technology, visit our AI for small business Guide.
Auto Repair Business Customer Demographics
The auto repair industry services a large-scale consumer base, ranging from households and individuals to commercial fleets, courier services, and more. Major customer segments for Auto Mechanics are reported by IBISWorld which offers a full version of this report for purchase here.
- The Auto Mechanics industry to segmented by revenue.
- Individual Consumers and Households make up auto mechanics largest customer market at 61.7%. Within this group individuals between the ages 45 and 64 contribute the most to revenue because of their larger disposable income and spending power. Consumers under this age range are more likely to handle car maintenance at home. However, households continue to be a stable market.
- Businesses account for 28.6% of the market. Trucking, taxi, rental, delivery, and other business sectors rely heavily on industry services, especially companies that cannot perform repairs in-house. Demand has increased over the past five years as business activity, e-commerce, and delivery services have grown. This trend has placed greater demand for commercial vehicles, increasing the need for convenient mobile repair and maintenance services.
- Government and non-profit organizations account for 9.7% of industry revenue. This segment is made up of government agencies and nonprofit organizations that rely on vehicles. Its contribution to industry revenue has declined in recent years due to government budget cuts and reduced spending.
Additional information on auto repair demographics can be found in a variety of trade associations and publications, including:
- Traffic Safety Annual Reports – United States Department of Transportation
- Car Ownership Statistics – Forbes
- Vehicle Usage – Pew Research Center
Auto Repair Business Startup Costs
Opening an auto repair shop requires an understanding of the startup costs involved in order to develop a sound financial plan. Whether you’re purchasing an existing shop or selecting a site to build your own, there are many important costs to consider.
According to a cost breakdown reported by Profitable Venture, Automotive Mechanic Shop related costs are as follows:
- “The cost for start-up inventory (stocking with parts, engine oil, break fluid, gear oil and other related supplies that are used daily in an auto mechanic repair shop) – $35,000
- The cost for the purchase of storage hardware (bins, rack, shelves, case) – $3,720
- The cost for counter area equipment (counter top, receipt issuing machine, etc.) – $9,500
- The cost for store equipment (cash register, security, ventilation, signage) – $4,750
…
From the rough estimate as listed above, you would need a minimum of three hundred and fifty – six thousand and one hundred USD ($356,100) to establish a medium – scale but standard auto mechanic repair shop – business in any city in the United States of America.”
Additional auto repair business startup cost information can be found at:
- How to Start a Mobile Auto Mechanic Repair Business – Profitable Venture (1)
- Starting a standard and well equipped mobile auto mechanic repair business is not capital intensive especially if you choose to launch the business on a small scale and you are the only full-time employee on your payroll.
- Purchasing a truck/van (for easy movement of your tool box and equipment) and of course the purchase of tool box and equipment are part of what will consume a large chunk of your start-up capital. In essence, if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.”
Auto Repair Business Plans
The following are sample auto repair business plans for reference. For additional business plan samples, visit our Business Plan Guide.
- Auto Repair Service Business Plan – LivePlan
- Automotive Repair Shop Business Plan – The Finance Resource
- Auto Repair & Car Wash Business Plan – Profitable Venture (2)
- Auto Repair Shop Business Plan Template – Growthink
- Mobile Auto Mechanic Business Plan Template – Profitable Venture (3)
Auto Repair Business Associations
Trade associations often are excellent sources of information on an industry. Here are some relevant auto repair industry associations:
- Automotive Service Association
- Auto Care Association
- National Automobile Dealers Association
- International Automotive Technicians Network
- Automotive Maintenance & Repair Association
Auto Repair Business Publications & Resources
- Auto Inc.
- Body Shop Business
- Collision Week
- Fender Bender Magazine
- Shop Owner
- Motor Magazine
- Vehicle Service Pros
For resources to help market your auto repair business start up, visit our Digital Marketing Guide, Social Media Marketing Guide, and our Website Design Guide.
Auto Repair Business Employment Trends
Understanding employment trends in your industry is important when opening an auto repair business. Auto repair shops employ a variety of automotive technicians and mechanical specialists. The following are insights from the Bureau of Labor Statistics Occupational Outlook Handbook into one of the main occupations, technicians and mechanics. A more specific breakdown of other auto repair businesses’ occupations is available from the Bureau of Labor Statistics.
- “Pay: The median annual wage for automotive service technicians and mechanics was $49,670 in May 2024. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $33,660, and the highest 10 percent earned more than $80,850.
- Work Environment: Service technicians typically work in well-ventilated and well-lit repair shops. Although technicians often identify and fix automotive problems with computers, they commonly work with greasy parts and tools, sometimes in uncomfortable positions. They may need to lift and maneuver heavy objects, such as tires. These workers usually stand for most of the day. They may be exposed to fumes, chemicals, and noise. Occasionally, service technicians might need to work outdoors, in all types of weather.
- Job Outlook: Employment of automotive service technicians and mechanics is projected to grow 4 percent from 2024 to 2034, about as fast as the average for all occupations. About 70,000 openings for automotive service technicians and mechanics are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.”
Additional Resources
Already in business or thinking about starting your own small business? Check out our various small business resources:
- View more business reports here: Small Business Snapshots
- View small business help topics here: Small Business Information Center
- View industry-specific research here: Market Research Links
- View business plans samples here: Sample Business Plans
Remember, you can also receive free professional business advice and free or low-cost business training from your local Small Business Development Center!
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