Lang Aftermarket iReport: Service Bays Soar in Product & Labor Volume
Service Bays Soar in Product & Labor Volume
”Car and light truck Do-It-For-Me (DIFM) product and labor (purchased service) volume has grown significantly over the past five years, despite the onslaught of COVID-19, which cut deeply into 2020 DIFM volume and slashed the number of repair outlets. Nevertheless, the reduced population of light vehicle repair outlets has been able to keep pace with the rising DIFM repair volume.”
“Service bay average repair volume has climbed faster than total DIFM product and service volume, with annual repair sales (products and labor) per bay surging by more than $20,000 between 2016 and 2021, at user-price.”
Growing DIFM Product Sales
Recovering from the impact of COVID-19, car and light truck 2021 DIFM product and labor volume topped $173 billion at user-price, up more than $16 billion from 2016.
As Do-It-For-Me (DIFM) product and labor sales rose at a 2.0% average annual pace over these five years, the population of car and light truck service bays in the U.S. fell sharply.
45,000 Fewer Service Bays
At mid-year 2021, there were approximately 45,000 fewer light vehicle service bays nationwide than five years earlier. This bay reduction ran contrary to the rise of vehicles in operation (VIO).
As the number of light vehicle service bays in the U.S. fell between 2016 and 2021, the VIO increased by nearly 7%, and DIFM product and labor sales climbed by over 10%, at user-price.
More Vehicles Per Bay
The average number of cars and light trucks per service bay in the U.S. continues to increase, reflecting a shrinking bay population that is challenged by the increasing number of cars and light trucks on U.S. roads.
The growing vehicle population and expanding DIFM sales should have triggered a surge in the nation’s bay population.
However, the opposite has occurred. As the car and light truck population increased and DIFM sales climbed between 2016 and 2021, the light vehicle service bay population fell, hit hard by the pandemic.
At mid-year 2021, the number of vehicles per service bay was nearly 10% higher than five years earlier. This trend of more vehicles per service bay in the U.S. will continue for the foreseeable future.
DIFM Market Solution
The solution to this DIFM market challenge (fewer service bays to handle greater repair volume) has been to increase product and service sales per bay.
Increased Service Bay Volume
Car and light truck bays averaged nearly $155,000 in annual product and service sales at user-price during 2021.
Despite the shrinking number of service bays across the U.S., the annual product and labor sales of the average car and light truck bay rose by 15% between 2016 and 2021, half again more than the total DIFM market.
Different Bay Performance by Type of Outlet
While the average service bay increased its product and service volume by 15% between 2016 and 2021, there were significant differences in the performance of bays by type of outlet.
Foreign Specialists led the way as their annual product and labor volume per bay soared by more than 25% between 2016 and 2021.
Repair Specialists and Service Stations & Garages also reported strong DIFM volume growth per bay over these five years.
Greater Bay Productivity
This growing production of service bays is testimony to the investments that outlets have made in technician training, tools & equipment, software and other resources to increase output per bay.
Together, the continued growth of DIFM volume and the decline of the bay population will make it more necessary than ever for outlets to make the investments required to increase bay productivity.
Opportunities for Productivity Providers
The growing necessity of repair outlets to increase their productivity (given their declining number and the growing repair market volume) provides great opportunities for companies that can develop and supply the means to improve productivity through training, tools and equipment, various types of software and other resources.
The growing numbers of electronic vehicles on the road will provide an additional impetus for even more training, tools and equipment, software and resources to increase bay productivity.
Six Major Takeaways
- The service bay population fell by 45,000 between 2016 and 2021 as the number of cars and light trucks on the road increased by nearly 7% and total DIFM sales climbed by over $16 billion.
- The number of cars and light trucks per service bay in the U.S. continued to soar between 2016 and 2021. This has provided the impetus for the average product and service volume per service bay to climb at a 50% faster pace than the total DIFM market growth between 2016 and 2021.
- The average car and light truck service bay in the U.S. rang up over $20,000 more in annual product sales between 2016 and 2021. There are significant differences in the rates of annual product growth per service bay among the major groups of repair outlets.
- Foreign Specialists achieved the greatest increase in annual volume per bay between 2016 and 2021, followed by Repair Specialists. Together, these two outlet groups expanded their product and service sales per bay by an average of approximately 23% during these years.
- This continued growth in DIFM volume and an expected decline in the bay population will make it more necessary than ever for outlets to invest in training, tools and equipment, software and other resources to maximize product per bay.
- The current DIFM market provides great opportunities for companies to develop and supply training, tools and equipment, software and resources to increase the productivity of outlets and enable them to meet the challenge of repairing the growing number of vehicles per service bay across the U.S.
NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.