What is the Business Outlook for Automotive Service Franchises?
Some people think it folly to try to predict the future. “Want to make god laugh,” begins an old witticism, “make plans”. There surely is some truth in this. But, in the world of business, it is an even greater folly to not even try to predict the future to some degree. For example, more and more businesspeople and entrepreneurs are turning towards franchising as way not only to make a (good) living but also to work in an environment where you are your own de facto boss.
If you think likewise, then you’re on the right track. But the question is, into which industry do you want to invest your money and time? It makes no sense putting your money into an industry that is struggling or is likely to struggle soon, so you need to figure what the outlook is for any industry in which you are interested. Given that this is a blog for an automotive service franchising company, this article will examine the business outlook for automotive service franchises.
Automotive Service Franchises
Before we get deep into the numbers, let us go over the superficial facts. First, what is an automotive service franchise? It’s a franchise of a larger company that services automobiles. An automotive service franchise performs maintenance, repairs, and service on automobiles. At first glance, there are several advantages this type of franchise has over franchises in other fields.
To begin with, the customer base for an automotive service franchise is huge because it basically includes everybody in each area who drives a vehicle. Not everybody hires an accountant, not everybody eats Mexican food, not everybody has a child who needs a tutor. But darn near everybody drives. Furthermore, vehicles don’t just need one repair over the course of their lifetimes. They need multiple repairs and regular service and maintenance. This means that if you impress a customer just once you can assure yourself of repeat business for years.
The Automotive Aftermarket
Getting a little more into the weeds, automotive service franchises belong under the umbrella of the automotive aftermarket. The automotive aftermarket is huge both in scope and in revenue. It consists of all the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts which take place after the vehicle’s initial sale. In 2016, the global automotive aftermarket was valued at $335.23 billion (USD). That is, obviously, a huge number. In the United States, the total revenue generated just by sales and installation of replacement parts in 2014 was $66.54 billion and $68.88 billion in 2015.
The Automotive Aftermarket Outlooks
Not only are these strong numbers, they are growing. The global automotive aftermarket is predicted to hit a valuation of over $700 billion by 2020. This remarkable growth owes itself to two main factors. First, there are more vehicles on the road than ever before and this number is continuously increasing. And second, the average American vehicle on the road is older than it has been in decades, perhaps ever. This is great news for automotive service franchises because older vehicles need more repairs and maintenance than do younger vehicles.
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