Lang Aftermarket iReport: Dealer ‘Do-It-For-Me’ market surges

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“Hit hard by the Great Recession of 2008, the new car and light truck Dealer population in the U.S. fell by more than 3,200 over a five-year span, undercut by plunging new vehicle sales and franchise cancellations by carmakers.

“The falling number of Dealers and the reduction in vehicles under five years old (the traditional market for Dealer bays) prompted a sharp fall in the Dealer Do-It-For-Me (DIFM) market share. However, Dealers have rebounded over the past three years and will continue to strengthen their repair market position.”

— Jim Lang, publisher, Lang Aftermarket iReport

Steady Market Growth

For several decades, new car and light truck Dealers had steadily increased their share of the light vehicle DIFM market in the U.S.

Dealers held a strong second place share and had consistently narrowed the annual gap between themselves and Service Stations & Garages, which traditionally have captured the largest share of car and light truck repair.

Sharp DIFM Decline

All that changed abruptly in 2008, as the Great Recession sent new light vehicle sales in the U.S. down more than 35% between 2007 and 2009, forcing some Dealers out of business and prompting carmakers to cancel thousands of Dealer franchises across the U.S.

After climbing from 26% to more than 27% of DIFM product share between 2000 and 2007, Dealers suffered a sharp decline in DIFM strength, plunging below 24% of the 2010 DIFM market and bottoming at just over 21% of 2014 product volume.

New Dealer DIFM Strategy

Faced with falling new vehicle sales, many Dealers reacted to the 2008 Recession by reevaluating their repair market strategies. Traditionally, Dealers had concentrated on serving vehicles under 5 years of age, focusing almost entirely on the nameplates that they sold new.

Facing a historic decline in new vehicle sales and falling bay volume, many Dealers have adopted an all-years, all-nameplates service bay policy that has greatly expanded the number and range of vehicles to which they market their repair and maintenance services.

Many Dealers have also emphasized used vehicle sales, initially to supplement falling new car and light truck volume, but later as an additional profit center.

The sale of used vehicles has been linked by many Dealers to their bay business, encouraging used vehicle buyers to return to Dealer bays for service and maintenance.

Quick Service Lanes

In addition to adopting an all-makes, all-years bay strategy, many Dealers have added Quick Service Lanes that enable them to more effectively compete with Independent repair outlets and also expand the age and nameplate range of vehicles they service.

One major carmaker has stated that a significant portion of vehicles serviced in their Quick Lane bays are nameplates other than their own.

Dealer Market Share Gain

Bottoming at 21% DIFM product share during 2014, Dealers have achieved a steady increase in DIFM product strength over the past four years. Lang Marketing’s latest research shows Dealers have continued to increase their DIFM share during 2018.

DIFM product share of the six major groups of repair outlets (including Dealers) will be presented in detail in Lang Marketing’s 2020 Lang Aftermarket Annual Report, which is scheduled for release in the next two weeks.

Six Major Takeaways

  • For several decades prior to the 2008 Great Recession, Dealers had steadily increased their DIFM product share, closing the gap between themselves and Service Stations & Garages, which traditionally have captured the largest share of car and light truck repair volume.
  • Dealers were hit hard by the Great Recession, with over 3,200 outlets closing or converting to used vehicle outlets between 2007 and 2012.
  • Many Dealers that survived the 2008 Recession have reevaluated their DIFM strategy, with many promoting their bays to all-makes and all-years of vehicles as well as emphasizing used vehicle sales as both a profit center and a means of expanding their service bay activities.
  • Many Dealers that survived the 2008 Recession have reevaluated their DIFM strategy, with many promoting their bays to all-makes and all-years of vehicles as well as emphasizing used vehicle sales as both a profit center and a means of expanding their service bay activities.
  • After bottoming at just over 21% of the 2014 light vehicle DIFM market, Dealers have expanded their DIFM product share for four straight years.
  • 2018 Dealer share will be presented in detail in the 2020 Lang Aftermarket Annual Report, which is scheduled for release in approximately two weeks.

Copyright 2019 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.

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