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Predicting the Auto Repair Industry Trends for 2021

If we've learned anything this year, it's to expect the unexpected. Any plans or predictions we made for 2020 in 2019 were more or less dashed beginning in March of 2020 in the wake of COVID-19. So at this point, when we look to 2021, we may feel an understandable amount of wariness when it comes to making any new assumptions.

auto repair

It's true, at this moment we cannot fully understand how next year will unfold. If we follow current predictions from medical professionals, however, we have significant reason to believe that life will begin to return to a true normal at some point next year. Right now, we must do our best to focus on the opportunities and challenges that will eventually lie ahead next year so we can prepare for what's to come. 

COVID-19's Impact on business

With the wave of initial lockdowns that many states saw in spring of 2020, many businesses were impacted and forced to shutter. While auto repair was deemed essential business, and therefore allowed to continue operations under state and local public health guidelines, there was still a significant decrease in traffic. By early summer, the amount of Americans back on the road began to increase, and has steadily continued to do so. Even in the face of a resurgence in cases, another lockdown equal to the spring does not seem to be on the horizon. 

This bodes well for operations remaining more or less in the realm of normal in terms of consistent business. Especially because with the onset of COVID-19, owners are expected to hold onto their vehicles for even longer than the current average of 11 years. Older cars, more maintenance, great for shops.

However, until this is all over, this leaves owners and operators of all types with the need to maintain a safe and socially distant environment from showroom to bays for a number of months more. Understanding that we may be in the thick of this for an undetermined amount of time in 2021 means we should be implementing more permanent changes if we haven't already. Adding auto repair and dealership software as a result of COVID-19 can drastically help you not only cope with the new normal, but also thrive as a digital shop. 

dealership software

Increase in Used vehicles

City dwellers have historically opted out of vehicle ownership for a number of valid reasons. Lack of parking, easy access to public transportation, ride sharing apps, etc. But in a post COVID-19 world, many of these previous reasons aren't as strong of an argument against vehicle ownership as they once were. 

As such, those who live in urban centers are looking for options to better protect themselves from crowded settings. Even though public transportation systems are taking every precaution possible right now in terms of sanitation and social distancing, this very well may not be sufficient for everyone. In addition, ride share services may not provide any comfort to those rightfully spooked by the pandemic either, even with masks. 

As an alternative, previously car-less adults are now seeking out ownership to get around while our current public health situation persists. Though, it's likely that these new owners aren't dropping a lot of money buying brand-new vehicles. Knowing that while the pandemic is currently raging, and will continue to rage well into 2021, they also are aware that it will end in a relatively short time frame. They aren't looking to make the commitment of a new vehicle, and instead are likely choosing to invest in a cheap older vehicle that they just need to maintain until the new normal becomes the old normal once again. 

Less Vehicle Ownership

One emerging trend we're seeing is the increase in vehicle leases as opposed to ownership. In recent years, the number of leased vehicles has quadrupled, and there's reason to suspect that this may continue into the future. This apparent shift from ownership to leasing has the potential to create an equal shift within our industry when it comes to regular maintenance services. Dealerships will likely gain traction with these services, while standalone auto repair shops may see less of a demand as a result.  

Retiring Owners 

Our industry is on the brink of a significant shift in terms of shop ownership. Within the next 10 years, nearly half of all owners will be reaching retirement age. We foresee that this will create a significant issue for those looking to sell their shops. With so many of these shops coming up for sale in roughly the same timeframe, it is likely that the market will not be a friendly environment for those looking to sell. This increased competition should be worrisome for those nearing retirement, and we urge that those who do not already have a plan in place for retirement should consider putting one together as soon as possible. 

Related: Graying of the Garages 

Continued Shortage of Technicians 

Every year, the demand for quality techs becomes more and more valuable, and we don't believe this will slow down in 2021. The good news is that our industry is taking a proactive approach to reach out to the younger generation to jumpstart careers in the automotive repair industry by helping to develop educational programs for future technicians. Of course the change we need to see in order to remedy this shortage will likely take many years. In the meantime, however, there are effective ways our industry—and your shop in particular—can cope with the technician shortage.

Tags: COVID-19 , Auto Repair , Business Ownership

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