The latest issue of CARS magazine tries to pull back the curtain on how technicians and service advisors in your shops are feeling and what they’re thinking in their day-to-day activities.

The cover feature takes the pulse of those on the front lines as they balance the needs of the customers with the business and how they do their jobs. Technicians and service advisors share their thoughts on this rapidly changing field in a candid manner. Some of the answers may surprise you.

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We also have insights from Greg Aguilera who looks at the challenge of trying to do everything yourself and explores the powers of delegation and other ways to minimize the stress.

Erin Vaughan continues her series on the road to acquiring another shop. She looks at making sure your shop can run without you being there. Your attention will be divided with a second location so she explores how to make sure things continue to run smoothly.

Talent challenges are all prevalent in the automotive aftermarket but Zakari Krieger looks at proactive measures you can take to try and get ahead of the challenges before they become overwhelming.

We were On the Road for Automechankia in Frankfurt, Germany, and the AARO Trade Show and Symposium. We have highlights from both events.

And we have our usual sections, including Letters, News, Class Act By the Numbers and more. So grab your copy or hit this link for the digital edition.

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A new survey found just how important honesty is in the workplace and why it’s essential for success and loyalty.

The Harris Poll Job Insights survey revealed that 96 per cent of job seekers believe that it’s important to be honest with new managers, with 36 per cent considering open communication essential.

Furthermore, seven in 10 (69 per cent) of respondents feel that employees should comfortably discuss personal issues with their managers if it impacts their work. And nine out of 10 (89 per cent) of job seekers agreed that an environment where employees and managers can be honest is crucial for a company’s success. Almost the same number (87 per cent) said they believe that honesty between employees and managers is key for a productive workforce. Promoting honesty may also result in lower employee turnover and increased retention, the results found.

The survey also noted that 82 per cent of job seekers would be more loyal to a company where they feel they can be candid with their managers.

Impact on morale, productivity,  loyalty

Hiring managers agreed, with more than half linking honesty to higher employee morale (58 per cent), productivity (53 per cent) and loyalty (51 per cent). Conversely, when honesty is lacking, employee morale (58 per cent), turnover (49 per cent), productivity (48 per cent) and burnout (48 per cent) suffer.

Honesty is critical in manager-employee relationships, with 61 per cent of hiring managers stating it’s essential for being a good manager. Around 90 per cent of managers believe that employees who can be honest with their leaders are more loyal and productive.

Training needed

Recognizing the importance of honesty, 91 per cent of job seekers value companies that provide managers with training on handling employees’ personal issues. A significant number (86 per cent) believe employees should receive training on managing personal issues to prevent work interference.

Most companies feel they’ve created a space for honesty, with 86 per cent stating they’ve fostered a safe and trusting environment and 80 per cent having systems for constructive criticism. Almost all (95 per cent) of hiring managers believe employees can speak honestly with anyone in the company about their concerns.

Image credit: Depositphotos.com

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Receiving notice of an upcoming audit can be intimidating. Even planned internal reviews are often a stressful undertaking for auto shops, but shop owners can streamline and reduce hiccups by following a few preparatory steps.

Taking the time to get ready in advance can yield significant savings down the line once the review begins.

1. Review applicable regulations

The first step in audit preparation is to review what regulations apply to the shop. National tax compliance is the most obvious area to address, but it isn’t the only one. Automotive businesses may also need to comply with rules from the Workplace Safety and Insurance Board, OEM warranty audits or other standards.

Recognizing what rules a shop must abide by makes it easier to know what information to compile or what changes may be necessary. Be sure to review provincial regulations, too. For example, Ontario repair facilities must follow the Consumer Protection Act, which includes steps that may not apply in other provinces.

2. Train staff thoroughly

Regardless of what standards a shop must meet, employee training is crucial. Safety regulations, proper financial reporting and compliance with customer rights all rely on following set procedures accurately. Consequently, any inadequate training can produce errors that complicate the audit at best and result in fines or other penalties at worst.

Owners should ensure their onboarding process meets all legal training requirements and leaves little room for confusion for workers. It’s also best to perform regular reassessments and refresher training to avoid mistakes from complacency or forgetfulness. Notifying staff of upcoming audits to remind them of best practices is likewise a good idea.

3. Stay organized

Any audit will also require extensive documentation. The same goes for general compliance, as errors like failing to report certain income can result in fines of $10,000 in some cases. Auto shops can prevent such mistakes and ease the process by becoming more organized in their paperwork.

Make filing proper forms a standard part of the workflow every employee learns about in training. Store files in a dedicated space, ideally with folders to sort them by type and data for easier retrieval. When it comes time for an audit, look through these documents for relevant files and set them aside for faster information sharing with the auditor.

4. Go digital

All this necessary documentation is easier if businesses switch to a digital system. Filling out and storing paperwork is faster on a computer, making staff more likely to perform these crucial tasks. Similarly, it’s easier to organize, retrieve and share files electronically.

Backing up mission-critical information to the cloud is also an important step in preventing data loss, which prevents compliance-affecting mistakes. There are also industry-specific programs available that can automate some documentation and reporting tasks. Automating wherever possible will minimize errors and reduce the workload on workers.

5. Consider Professional Assistance

In some cases, it’s best to turn to an audit professional for help. Business owners who have not followed these best practices in the past, have particularly disorganized paperwork or feel overloaded with repetitive work benefit from hiring a third party to manage compliance and reporting for them.

Organizations may understandably be hesitant about paying for such a service. However, CRA penalties can be as high as $24,000 for some forms of noncompliance, so it may be more affordable to seek professional guidance before risking fines. Third-party help is certainly not always necessary, but it is worth consideration.

Audits don’t have to be a headache

When auto shops prepare ahead of time, they can ensure the audit process is relatively painless. Following these five steps will help any entity in this industry get ready for a smoother, more compliant review. Doing so ensures minimal disruption to normal work and can prevent significant losses.

Devin Partida is the editor-in-chief of ReHack.com and a freelance writer. Devin covers business technology, Fintech and auto tech

Image credit: Depositphotos.com

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Whether it’s cost of living, desire for more space or the slower pace, people moving out of cities and into suburban communities has benefits for the automotive aftermarket. However, those living in cities are still key clients for the industry, an industry expert observed.

During the Three Dragons session at this year’s MEMA Aftermarket Suppliers Conference in Detroit, Greg Melich, senior managing director at Evercore ISI, provided the Wall Street perspective of trends taking place in the auto care sector. One of the trends he highlighted was the one that accelerated over the COVID-19 pandemic and saw people leave large urban centres for smaller suburban ones.

To Melich, whether people are driving their personal vehicle or using a ridesharing problem like Uber or Lyft, there’s a vehicle still accumulating mileage and that vehicle still needs to be maintained and repaired. However, people moving to the suburbs means more of a need for a vehicle as consumers generally have to travel farther per trip, be it for work or errands. So customer makeup could be different.

That said, while vehicle usage increases in suburban areas, Melich noted that incomes are generally lower than in urban areas. That means households with more vehicles in their driveways actually have less income than those in urban centres with fewer cars — so lower-income families are spending more on vehicle repair.

“This is one of those unique consumer categories where consumption of units doesn’t go up where incomes are higher in these more densely populated markets,” Melich observed. “So this is an area where having affordable cars that people can drive to get to work is such a key part of the equation.”

As for a tail risk, he pointed to electric vehicles. He noted investors are nervous when it comes to investing in the aftermarket because of the uncertainty of EV lifespan — making these essentially disposable vehicles — and issues around right to repair and if the industry will even be able to repair EVs.

“Because if we can’t fix the electric cars, and we don’t find a way to rebuild them … there’s a risk in 10 years that this industry,” could shrink.

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You’re in the people business. You just happen to fix cars, a shop coach told a room full of shop owners, technicians and advisors.

“You are not at the shop to fix cars. The purpose of any business is to create and keep a client,” said Rick White, president of 180Biz, during the presentation Business Boss Leader: From Creeper to Leader at this year’s Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo.

And it doesn’t matter what the business is — everyone has the same purpose. And for this industry, it’s done by fixing vehicles.

He noted that the average shop loses 17-21 per cent of its clients every year. Reasons can vary from a customer buying a new vehicle to death to a family member opening a shop and the business going there.

Nevertheless, if a shop isn’t measuring how many clients they’re losing compared to how much they’re bringing in, it could spell trouble.

You want to get to know your client. White said to have “discovery conversations” with clients. You do this by making them feel seen, heard and appreciated — the ingredients of connection, according to professor and author Brené Brown.

So advisors have to learn to connect to the client by having a real conversation with them. “It’s about them, not about me,” he said.

He also advised to always have your antenna up and be able to read the room quickly.

“So it’s teaching them to always be looking and listening. And it takes time. It takes commitment and dedication,” White said.

And the function of any business is to run without needing the owner present. Think of it as raising a child. You birthed it, you helped it grow, you put it on the right path and you one day watch your child become their own person and live life without you watching over them.

“That is what a business is set to do. You are there to teach it and give it values and show it how to do things, and then you let that business go,” White said. “But we don’t do that.”

He brought it back to the fact that your business is there to create relationships.

“What I’m doing is using cars to create relationships. Because I’m in the relationship business, not the car business. And the sooner we understand that, the healthier our business becomes,” White said. “Because when you have a relationship with somebody, they’re not going to go to another shop to save $50.”

Image credit: Depositphotos.com

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When debating if you should sell the assets of your business compared to bringing a new buyer to buy shares in the existing company, there’s one clear answer for accountant business advisor Hunt Demarest: Do an asset sale.

“For every 500 asset sales we see, we see one stock sale. Really, we never ever, ever see stock sales,” he said at this year’s Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

In a stock sale, the buyer acquires the selling company’s stocks, thereby taking over ownership of the company, including all its assets and liabilities. This means the buyer assumes all obligations, including debts and legal risks associated with the company.

On the other hand, in an asset sale, the buyer purchases individual assets and liabilities of the company, such as equipment, inventory and property, without buying the company’s stock or assuming its legal entity. This allows the buyer to select specific assets and liabilities they wish to acquire, potentially avoiding unwanted obligations.

So the buyer of an auto repair shop will purchase the shop’s equipment, inventory and goodwill and set up their own legal entity. They don’t get the shop’s cash, debt or liabilities.

“Even though from a customer standpoint it’s going look like the same exact business, there is a clear line: This is my corporation; this was his corporation,” Demarest said during the session Transitioning Your Business.

There are two big reasons: Taxation and liability. The taxation end has to do with write-offs and is different than buying stocks of, say, Apple. Most people are buying an auto shop and holding it for many years, even many decades. So any taxation benefits won’t be seen until further down the road. Whereas, if you have Apple stock, you can sell at any time in case of financial need or desire and recoup those benefits.

As far as liability of concerned, if you take over the existing legal entity, you are liable for anything that company has done in the past. Say the taxman comes calling — you as the owner of that entity are responsible, not the previous owner who is no longer involved in the business.

Or if the shop made a mistake on a customer’s vehicle and sues the shop, you as the new owner would be responsible. Demarest noted that comebacks and warranties aren’t technically your responsibility if you’ve set up a separate company, even if you keep the business’ name.

“But it’s going to be probably a bad introduction to the community,” he advised if you turn away such claims.

“You get into those weird areas where it’s like, legally, I don’t have to cover this. But hey … pro bono replacing this water pump is probably better than my first introduction in that community is, ‘Hey, this guy came in and doesn’t stand behind his work.”

Image credit: Depositphotos.com

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Building a strong team is essential in a jobber store because you can’t manage everything on your own. Here’s how to ensure success…

The true secret to success of a jobber store lies not in the parts we sell, but in the people who sell them.

When I was managing jobber stores, staffing was always my primary concern and focus on a day-to-day basis. The jobber business is highly competitive, requiring prompt phone responses, excellent service to support shop scheduling and workflow and consistent, accurate delivery of parts. All of these functions depend on the operations of the staff you rely on.

As the leader of the business, many operational aspects are beyond your direct control, with you relying on your staff to ensure the business’s sustainability and growth.

Many people ask how to develop staff to maximize their performance and provide the best service for clients, how to handle personal issues and recurring retention problems and how to avoid the pitfalls of running shorthanded.

Over a decade of running the jobber business, I found that the key to success in developing and driving staff performance was rooted in the business’s vision, mission, and values. On a daily basis, I consistently aligned actions with these guiding principles. Over time, this consistency resonated with the staff, fostering an understanding of our unwavering commitment to our clients and the crucial role our service played in maintaining client loyalty in a highly competitive market.

For jobbers and those in the automotive aftermarket, I always emphasized industry trends and market dynamics. Through effective communication, we cultivated a culture of accountability, where effort, actions and the business’s reputation reflected our staff’s performance.

My staff were crucial in executing for our clients, so I recommend that jobbers and owners maintain an open-door policy and encourage positive communication.

I advise today’s jobbers that as the industry consolidates and competition intensifies, the advantage entrepreneurs and jobbers have over corporate competitors is their passion for building a strong culture with their staff — one that resonates with clients.

On a more practical level, we invested heavily in staff training to ensure that our team was up to date on new products, supplier training refreshers, and operational processes. This commitment to continuous learning became part of our culture and enhanced our business execution and customer service.

Regarding recruitment and retention, given the competitive nature of the automotive aftermarket and parts distribution, we proactively focused on retaining our staff and recruiting individuals who fit the business culture and could deliver for the business and its clients. If issues arose, such as compensation disputes or interpersonal conflicts, they were personally addressed promptly, along with our HR functions. In a store environment, staff may leave for a difference of just  a dollar or two, given the general salary ranges and affordability challenges in Canada. I generally overpaid for driver and warehouse positions and addressed staff concerns on a case-by-case basis to minimize turnover and its impact on operations.

My staff were crucial in executing for our clients, so I recommend that jobbers and owners maintain an open-door policy and encourage positive communication. This approach helps prevent staff from seeking alternative employment and avoids the costly impacts of turnover.

Overall, these strategies were key to my success in managing staff and delivering exceptional service.

Zakari Krieger is the Fix Network, Canadian vice president of Prime CarCare, responsible for the Canadian retail business, encompassing the Speedy Auto Service and Novus Auto Glass business lines

This article originally appeared in the September issue of CARS magazine

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There has been a surge in promo codes and discounts offered by online retailers in recent times, a new survey has found.

The study by SimplyCodes found a substantial increase in the issuance of promo codes by online retailers and brands, indicating a growing reliance on discounts as a strategy to attract customers. The study, which analyzed data from nearly 400,000 retailers January and June 2024, found a 31 per cent increase in the number of unique promo codes issued compared to the same period in 2023.

The study also showed that promo codes are not only more abundant but offer larger discounts. This year, the average discount provided by promo codes is 17.6 per cent, up from 17.17 per cent last year, a 2.6 per cent increase. Additionally, the average dollar amount off per promo code has risen by 22 per cent, increasing from $27.26 to $33.25.

A notable trend identified in the study is the rise of single-use promo codes, which are unique codes provided directly to customers, often via email, and can only be redeemed once. The number of retailers offering these single-use codes has jumped by 47 per cent compared to last year, indicating that merchants are increasingly tailoring their promotional strategies to individual customers.

The suggestion from the study is that there’s a growing reliance on promotional codes by both consumers and retailers, driven by competitive pressures and economic factors such as inflation and the rising cost of living. Nearly 70 per cent of respondents reported that having a promotional code makes them more likely to complete a purchase, while 62 per cent actively seek out and use promo codes when shopping online.

This suggests that promo codes have become an essential tool for retailers looking to boost sales and customer engagement in a challenging economic environment.

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If a customer calls Jeremy O’Neal in search of a quick oil change, he will politely ask them to move on.

It’s not that the shop owner and coach with AdvisorFix won’t do an oil change — he’s just not interested in only doing an oil change. He’s interested in larger-picture vehicle maintenance that includes oil changes as part of keeping his customers’ vehicles healthy and running for a long time.

So when the customer calls with the simple request, he will tell them that he helps them maintain their investment in the vehicle and will complete a whole vehicle inspection. But to properly service the vehicle, it will need to be in his shop for four hours. And then gives them options for what time to come in.

“The customer who wants a quick oil change is not my target market for my business,” he said at the Worldpac Supplier and Training Expo in Nashville. “I love repairs.”

The way he sees it, his customers — and yours — should be adhering to a repair and maintenance schedule that has been created specifically for them. So when they come in for their next service, there’s a series of items that need to be completed. And an oil change can be on that list.

It’s the same reason why he won’t expand into mobile services. During his session, he played a commercial from Ford that touted its mobile vans that can do an oil change, battery service, health checks and more wherever the customer is located. It’s a strategy that baffles O’Neal. He’s sure the company has done its homework and found people want this service. But that doesn’t mean it’s good business.

Doing the small stuff means you’re missing out on the big stuff, he said during the session, The Essential Laws of The Profitable Shop Manager. And oftentimes, a vehicle’s issue can’t be figured out in the owner’s driveway. That’s why he wants his customers to bring their vehicles into his shop for a proper, full inspection.

“They’ll start on a car, can’t figure it out and leave it undone. I’m dead serious. Happens all the time,” he said about mobile service providers in his area.

Image credit: Depositphotos.com

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There are four generations in any given workplace in the automotive aftermarket, creating a widely varying dynamic when it comes to getting business done.

You have the Baby Boomers, (born from 1946-1964), Generation X (1965-1980), Generation Y, or Millennials (1981-1996) and Generation Z (1997-2012), many of whom are just getting their feet wet in the working world but making big impacts.

Each group prioritizes different things in the workplace — you can read more about it here and read the full study results here.

And you can tune into the latest episode of Auto Service World Conversations to hear from Jeff O’Hara, chair of the Modern Industry eXpertise (MiX) Council, a leadership council for the next generation of aftermarket leaders that is part of MEMA Aftermarket Suppliers.

He dives into the survey results, key takeaways for employers to work with the four generations and how each generation can help the other grow and succeed.

“People are willing to stay and grow within an organization, but people are craving that path — what is it going to look like for me?” O’Hara said on the podcast. “And how can companies, especially larger ones, how can you help provide that path to folks with the understanding that you can’t always get everything from an employer — and there are many different paths. But how can you get, especially the younger generation on board with growing within a company?

Tune into the conversation by clicking the banner above or choose your platform of choice below to hear this episode and find the full Auto Service World Conversations library.

Choose your preferred platform:

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If you’re hiring a technician, advisor or counter person in the hopes they will get better at the job, you may be in for a world of hurt, a shop coach warned.

It’s tough to find talent, yes, but when you bring someone on and it’s clear that it’s not working out, the onus falls on you to challenge them and get the best of their abilities to shine through, urged coach Rick White, president of 180Biz.

It’s not about what you hope for them to do, it’s about whether they want to get better at the job and you push them to reach their goals, he explained.

“One of the mistakes we make is we hire people and wait for them to get better. You have to be the catalyst to making them better — your expectations, your belief and confidence in them,” White said during the presentation Business Boss Leader: From Creeper to Leader at the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo in Kansas City.

Think about this this way: Be the person in their life who, when they look back 50 years from now, point you out and say you’re one of the five people who made them what they are today.

“How many of you have people in your life that have done that? That ‘I see something in you that nobody else saw’ and they demanded it from you?” White asked the audience. “It’s your turn to be that person. See things for others.”

You can help staff accelerate their growth by giving them higher targets. If you aim higher, you’ll hit them harder. He gave the example of a boxer. They are trained to not aim directly for their oppoent’s face when they punch — they aim for six inches behind their target. They end up hitting their actual target harder.

Think of that when setting goals for your staff. Put them a little higher — if they hit, great. If they miss, they still hit a pretty high goal. So you can set a goal of 10 per cent growth and hit eight per cent or go for 20 per cent growth and hit 15 per cent.

“So go big or go home,” White urged. “Dream big as if you could not fail. Because again, failure is not an option here.”

Image credit: Depositphotos.com

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Burnout is a widespread issue affecting nearly half of workers globally, according to a new report from Boston Consulting Group (BCG).

The report, titled Four Keys to Boosting Inclusion and Beating Burnout, revealed that 48 per cent of employees in eight countries are currently experiencing burnout. This study surveyed 11,000 desk-based and frontline workers from Australia, Canada, France, Germany, India, Japan, the UK, and the US.

BCG’s findings highlight a crucial link between workplace inclusion and burnout. The report shows that when employees feel included, their chances of experiencing burnout are cut in half. Inclusion, in this context, means employees feel valued, respected, supported, and that they belong.

The research utilized BCG’s BLISS Index to measure workplace inclusion. This statistically rigorous tool identifies the factors that most strongly influence employees’ feelings of inclusion. The survey pinpointed four key sentiments that significantly impact employees’ sense of inclusion:

1. Good access to resources: When employees have the necessary tools and support, they feel more included and less stressed.
2. Senior managerial support: Employees who receive backing from senior management feel more valued and less likely to experience burnout.
3. Psychological safety with direct managers: A safe and open relationship with direct managers reduces stress and enhances feelings of inclusion.
4. Fair and equal opportunity for success: Ensuring all employees have equal chances for success fosters a more inclusive and less stressful work environment.

Despite the importance of these sentiments, the survey respondents reported low satisfaction levels in these areas. Addressing these issues is critical, as burnout is notably higher among certain subgroups. Women, members of the LGBTQ+ community, people with disabilities, and deskless workers face burnout rates up to 26 per cent higher than their counterparts. These groups also report feeling less included in the workplace.

Building a more inclusive work environment can seem daunting, but focusing on these four key areas provides a clear starting point. Employers need to listen to their employees continuously, addressing their pain points to improve inclusion and reduce burnout.

“Inclusion doesn’t end at recruitment. It requires ongoing dialogue with employees and addressing their daily challenges,” said Gabrielle Novacek, managing director and partner at BCG and co-author of the report. “By focusing on these key areas, companies can identify where to invest and innovate to improve inclusion and reduce burnout. This not only helps in avoiding the costs associated with burnout but also in attracting and retaining talent, ultimately leading to a thriving workforce.”

Image credit: Depositphotos.com

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Tesla’s dominance in the EV market has been a double-edged sword for the company: On one hand, they have the top market share in North America; on the other, their vehicle owners are plagued by long wait times and dissatisfied customer service.

That means the automotive aftermarket has a chance to swoop in and take some of their business, noted Carolyn Coquillette, owner of Earthling Automotive in San Francisco and founder of Shop-Ware.

It’s helpful that Tesla has such dominance. The overwhelming number of EVs being Teslas means “it gives us room to actually learn one specific platform, and then be able to drive a market around that,” she said at Worldpac STX this year.

She pulled out her crystal ball and figured it’ll be around 2030 when you see EVs outpace hybrids in sales, pushing the need for the aftermarket to be on the ball and prepared.

“And this, of course, assumes that the cars are going to sell the way they think they’re going to sell them,” Coquillette added.

Nevertheless, many EVs are a decade old, such as the Tesla Model S. While that model hasn’t sold as well as the Model 3 and Model Y, both are also aging, creating a growing aftermarket demand.

“But even the 3 and the Y are now five-plus years old. So obviously, that’s when the aftermarket kicks in,” Coquillette said.

But Tesla has been a victim of its success, in a way. While Tesla has been pumping cars out of its dealerships, it hasn’t been as on the ball when it comes to service and maintenance requests from customers.

The dissatisfaction among Tesla owners with dealership services is palpable, presenting an opportunity for the aftermarket.

“They haven’t been very good at fixing cars, which means the dealership experience is terrible,” Coquillette highlighted. “Basically, you can’t get a hold of them, it takes forever to get in there, their parts are not available.”

It’s part of a trend from dealers of all stripes. There’s a reason the automotive aftermarket is a flourishing industry.

“If the dealerships could have put us out of business, they would have put us out of business already,” Coquillette said. “They obviously haven’t. They keep screwing it up, they’re going to keep screwing it up, including Tesla. So that’s great.”

Image credit: Depositphotos.com

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Success hinges on a deep understanding of financial health in an industry as dynamic as automotive services. This involves looking at various metrics to derive actionable insights about the business’s ability to meet its current and future obligations.

Knowing what indicators to track and what they mean is critical to making informed business decisions.

Key financial metrics

These are the most crucial financial signals to monitor in auto servicing for enhanced business profitability and operational efficiency.

Revenue: Service shops’ revenues generally span three primary sources: Labour, parts and add-ons. The average repair order (ARO) is one of the best metrics for tracking these figures from a single viewpoint. This indicator represents the dollar amount of services and products sold over a specified period. Industry data shows the average ARO was just over $470 in 2021, with the Pacific West and Northeastern regions recording the highest figures.

Closely related to the ARO is the hours per repair order (HRO), which measures the technicians’ average time per repair or service order. Calculate it by dividing the hours worked in a week by the number of repair orders in that period. Experts recommend following the HRO rule of three — a technician should complete three service orders within three billable hours in one shift. 

Cost of goods sold (COGS): COGS is the cost of doing business. In the auto service context, it includes primary expenses incurred in purchasing parts necessary for repairs and supplies expenditures for consumables, such as oil and fluids.

Analyzing COGS helps determine how much business revenue goes to direct costs. For example, if a shop generates $100,000 in revenue but incurs $40,000 in COGS, 40% of the income is spent on parts and supplies. The goal is to keep the value low while maintaining output quality.

Gross profit: Gross profit is calculated as revenue minus COGS and is a critical metric for assessing financial performance. This margin indicates how well the auto shop converts sales into earnings before accounting for operating expenses.

Improving gross profit margins often involves optimizing supplier relationships to reduce parts costs and implementing effective labour pricing to reflect the service value offered. These measures lead to greater financial stability, allowing the company more flexibility in adapting to industry changes.

Operating expenses: This includes all costs related to running the business that are not directly tied to COGS. Key components include rent and utilities, wages, marketing costs, insurance and other relevant day-to-day obligations.

Operating expense issues represent one of the biggest reasons that 45 per cent of businesses fail in the first five years. When a company struggles to meet current expenditures necessary to enable production, everything else suffers, from labour and inventory to cash flow.

Net income: Calculate net income or profit by deducting all expenses from total revenue. This indicator reflects the business’s overall profitability over time. It also represents the portion the company can afford to reinvest to sustain growth and competitiveness. The Automotive Industries Association of Canada has pegged the average net income between 6.3% and 8.8 % yearly. That means anything above this is a strong sign that the service is doing well.

Customer acquisition cost (CAC): CAC measures the cost associated with acquiring a new customer. This metric includes marketing expenses divided by the number of new customers gained during a specific period.

Auto service providers must prepare for a new class of customers as autonomous vehicles become more prevalent, which will impact CAC moving forward. For example, diagnosing and repairing driverless cars will require advanced knowledge of interconnected automation systems, which often necessitates additional spending on training programs.

Customer lifetime value (CLTV): CLTV estimates the total revenue expected from a customer over their entire relationship with the business. Failing to retain clients after the first few repair or replacement orders can signify dissatisfaction with the service rendered or a failure of the company’s retention strategy.

Utilizing financial metrics

Understanding what these metrics mean is the key to making data-backed decisions. Many financial system tools offer simple dashboards with streamlined commands for generating indicator reports based on operations data.

These insights are vital for comparing performance against set benchmarks. For example, a decrease in ARO could indicate reduced upselling or longer service times, prompting management to investigate those specific areas instead of wasting resources on general audits.

Financial metrics empower managers to make the best decisions to drive success and profitability. Relying on these signals rather than mindlessly implementing broad or misplaced strategies reduces inefficiencies and promotes agility in an evolving business landscape.

Devin Partida is the editor-in-chief of ReHack.com and a freelance writer. Devin covers business technology, Fintech and auto tech

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Automotive repair has long had a stereotype of technicians purposely looking for work in a vehicle to sell to the customer. But when done for the right reasons, it’s what every shop should be doing.

Jay Huh, a business coach at Shop Fix Academy and owner of CarMedix in North Carolina, encourages all shops to have their techs thoroughly inspect each vehicle that comes in so that both the shop and customer know of anything that could need work down the road.

He used his wife as an example — the only maintenance she does on her car is gassing it up. He would rather his shop be the one that is looking over that car top to bottom and ensuring it’s in proper, safe working order than the one that only does the oil change and moves to the next vehicle. The risk with the latter is that you could have an angry customer a week later when their vehicle suffers a failure and they give you an earful about how you didn’t catch a particular problem earlier.

It’s not about making more money — it’s about ensuring any vehicle that goes back on the road from your shop is safe.

“I want my wife to go to a shop that checks over the car and tries to sell her on the repair because I want my wife to be safe. I want my kids, my five-year-old and seven-year-old, to be safe,” he said during the session How to Run your Shop Stress-Free in Kansas City at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo.

That’s the mentality he pushes in his own shop and wants every shop owner to have in theirs. This isn’t about pushing a sale, especially one that isn’t needed.

“Just look over the car to make sure it’s safe for the customer,” he emphasized. “So stop putting words in our mouths and saying it’s unethical business. We’re looking over the car.”

Yes, there is money to be made by going through this process. It’s secondary but also important for your business. As many shop coaches have repeated, Huh told attendees that profit is not a dirty word.

“Every one of us here should be in business to make a profit or otherwise we’ll open up a nonprofit,” he said. “We’re here to make money.”

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With car manufacturers packing more technology into vehicles than ever before, a recent survey highlights which features drivers can’t live without — and which ones they’re willing to pay extra for.

Car manufacturers are increasingly incorporating advanced technology features into modern vehicles to enhance safety and convenience. A recent survey conducted by Uswitch aimed to identify the tech features that car owners find most useful and those that would influence them to pay more for a vehicle.

The survey revealed that parking sensors are the most popular tech feature, with 62 per cent of respondents considering them useful, and more than half (53 per cent) using them regularly. Parking sensors use radar technology to audibly alert drivers of obstacles when parking. Respondents cited safety (82 per cent), convenience (50 per cent) and efficiency (40 per cent) as the main reasons they find parking sensors useful.

Parking cameras are also favoured by nearly three in five (57 per cent) car owners, with respondents highlighting safety (82 per cent), convenience (48 per cent) and security (40 per cent) as key benefits.

Defrosters on sideview mirrors ranked third, with 40 per cent of respondents considering them useful for safety (59 per cent), convenience (59 per cent) and efficiency (38 per cent).

The survey also found that car tech features play a significant role in purchase decisions. Among drivers with built-in tech features, 38 per cent reported that these features influence their decision to buy a vehicle. Specifically, 35 per cent of respondents indicated they would pay more for a car with parking cameras or parking sensors, noting the potential cost savings of having these features pre-installed.

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According to a recent survey, the priorities of those working in the automotive aftermarket vary widely by generation.

The Defining Culture Survey shed light on what each generation in the auto care sector prioritizes, what they want to see in the work environment and how they view their peers.

The study was conducted by the Modern Industry Expertise (MiX) Council. It’s a group of industry leaders dedicated to working with the future generation of automotive aftermarket professionals. It was designed to find out how different generations in the industry view the workplace and asked how they view rewards and recognition, diversity and inclusion, technology and more.

Baby Boomers place the highest value on rewards and recognition, and by a wide margin. Almost a quarter (24 per cent) of respondents picked this as their top category, with just 10 per cent of Millennials, 11 per cent of Gen Xers and 4 per cent of Gen Z agreeing.

But Gen Z did put collaboration and teamwork as their top pick (29 per cent) with one in five Gen Xers and 19 per cent of Boomers choosing it. Only 15 per cent of Millennials agreed.

There’s more to come! Stay tuned for a podcast episode dedicated to this topic with Jeff O’Hara, chair of the MiX Council

The Millennials’ top choice was a supportive environment (23 per cent) but even that was lower Gen X (30 per cent) which also picked this as their top category. Even though 19 per cent of Gen Zers picked this category, it was the second highest for them.

But Where Millennials came out ahead of everyone was in the growth and innovation category, though just 13 per cent chose this one. They were followed by Gen Z (10 per cent) and Boomers (5 per cent) No Gen Xers picked this.

Gen Xers were tops for flexibility and adaptability (20 per cent). While 15 per cent of Millennials and 6 per cenf of Gen Zers agreed, no Boomer did at all.

Comments

When asked to comment about the impact other generations have on the workplace, there weren’t many compliments, if any, to go around.

For example, one Boomer comment blasted younger generations’ worth ethic, saying the older cohort is better.

“Seems like younger workers don’t want to get their hands dirty and only want a paycheque,” one Boomer wrote.

Something similar was noted by Gen X. “Younger generation wants the reward but [not] willing to put in the risk and time needed for overall success,” one commented.

Another Gen X noted that hiring bas become difficult because “some younger generations have different thoughts on long-term careers.”

For Millennials, they called out the older generation for being stuck in their ways. It was bought up multiple times that older workers cling to a “things are done this way because this is how we’ve always done it” mentality.

For Gen Z, they noted the need to move towards a different workplace environment. “Getting back to employee-centric is what upcoming generations are trying to do,” one commented.

While another Gen Zer appreciated the in-person work experience, they noted that “Millennials have streamlined the workplace with a heavy focus on technology making work faster and more efficient.”

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In the automotive service industry, versatility and skill diversification are vital for meeting immediate customer demands or else you can easily lose business to the competition.

One area that offers immense potential for growth and customer satisfaction is locksmithing.

By mastering key locksmith skills such as key cutting and duplication, computer and module programming, lock picking, decoding and lockout services and transponder and electronic key repair, auto service professionals can provide invaluable assistance to their clients on the fly.

These helpful skills will be instrumental in unlocking new opportunities for your business.

Skill 1: Key cutting and duplication

While a relatively accessible service elsewhere, key cutting and duplication can be useful services to customers at your shop who are in a bind. People frequently lose their keys. Being able to offer new keys quickly can greatly increase customer satisfaction. This is a simple add-on to services when drivers are already waiting to get other work done on their car.

To cut and duplicate keys, you need a professional key-cutting machine. The upfront cost of the machinery may be a hefty expense, however, these machines often pay for themselves as the fee for cutting car keys is sustainably larger than that of, say, house keys.

Skill 2: Computer and module programming

A crucial skill for an automotive locksmith is the ability to safely and efficiently remove modules and computers from vehicles for programming. This requires a deep understanding of vehicle electronics, wiring systems and the specific procedures for each make and model.

Mastery of this skill ensures that the locksmith can perform advanced tasks like reprogramming keys, updating software, and restoring vehicle functionality without damaging sensitive components.

Skill 3: Lock picking, decoding and lockout services

Being able to unlock a customer’s car without a key can be a huge asset to you and draw people in search of these services. Most drivers have locked their keys in their car at least once in their lifetime. The ability to get in and retrieve them quickly and easily can be an invaluable skill and absolutely essential if you are providing roadside assistance.

Most tubular lock picks come with a “decoder,” which lets the locksmith know at what depths the pins break the shear plane. By using the decoding key after the lock has been picked, the locksmith can cut a tubular key to the correct pin depths and thus avoid having to replace the lock.

You can approach this skill in a few different ways. Consider purchasing auto-entry kits online or keeping lockpicking kits on hand to gain entry for older models. Spending the time to teach yourself or receive training on these tools is worthwhile in the long run, considering this is a helpful service that will undoubtedly be needed at some point.

Skill 4: Transponder and electronic key repair

In recent years, it’s become much more common to have a transponder or electronic key fob for your car. These keys can range from the ability to lock and unlock vehicles remotely to more advanced capabilities like moving the car forward and back in a parking space while the keyholder is outside the vehicle.

Much like learning different types of locks, learning different programming procedures for transponders and electronic keys takes time. However, the positive impacts this will have on your business are seemingly limitless.

Learning how to program, troubleshoot, replace the battery, and sync electronic keys means you can offer additional services to improve your bottom line and customer satisfaction.

Unlocking new opportunities

Mastering essential locksmith skills for a range of vehicles can significantly enhance your auto service offerings. Each of these skills provides unique benefits that cater to common customer needs, from losing keys to dealing with complex locking mechanisms.

By investing time in learning and perfecting these skills, you not only expand your service capabilities but also increase customer satisfaction and loyalty. Embracing these competencies can quite literally unlock new opportunities, positioning you as a versatile and invaluable resource in the automotive service industry.

Tomer Ruderman is the founder of Car Keys Ottawa, an automotive locksmith service. He is been an automotive, residential and commercial locksmith for, working on small- to large-scale projects across Canada. He specializes in all areas of car locksmithing, specifically car key replication, duplication and ignition repair.

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It’s not often, perhaps even rare, these days that a technician sets off on their own to open their own shop.

But that’s the plunge Rui Silvestre has taken, opening My Neighbourhood Mechanic in Toronto’s west end.

The 2017 Canadian Technician of the Year from CARS magazine was the lead tech at Master Mechanic High Park, the 2021 Shop of the Year. But after the shop was forced to close, Silvestre set out to be on his own, rather than work for another shop.

It was important for him to stay in the community — after years of searching, he found a location just a couple of kilometres north of his old shop. And he was able to bring the entire team from his previous shop to his new one.

But things are different. He went from working at a location that was highly visible at the corner of Dundas St. West and Howard Park Ave, just north of Roncesvalles to being smack dab in the middle of a residential area at the top end of the West Toronto Railpath.

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He opened the doors on August 1 and took some time to chat in this episode of Auto Service World Conversations. Silvestre talks about his journey to being a shop owner, the changes he’s faced, how he’s staying connected with the community and how he’s looking to grow both his shop and the profession.

“It’s not as mainstream as we once were before, but I don’t think it matters,” Silvestre said of once being at a major intersection to now being in the middle of a neighbourhood. “The whole focus is community. So why not right in the middle of one? To us, that’s perfect. It’s right where we want to be.”

Tune into the conversation by clicking the banner above or choose your platform of choice below to hear this episode and find the full Auto Service World Conversations library.

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Oil changes are the top maintenance procedure ignored by many drivers.

The Automotive Industries Association of Canada’s latest Consumer Behaviour Series report, Canadian vehicle owner’s attitudes towards maintenance and repair, found that the most ignored maintenance item was related to engine oil with 25 per cent of respondents saying they let oil changes, flushes and checks slide.

Many individuals feel they are too busy, that oil changes are too expensive or that it doesn’t affect their car’s performance. As auto industry professionals, it’s important to reiterate the importance of regular oil changes to consumers. The risk being that, if they don’t, they may run into more time-consuming and expensive problems with their cars down the road.

Below are a few tips on how to drive home messaging to ensure your customers are not overlooking their oil changes.

Educate Consumers

Education and awareness are key when it comes to convincing customers to not delay oil changes. Lack of knowledge on when to change oil and the cost of actually getting an oil change are two of the main reasons why this service goes ignored.

Spreading awareness to your customers through visual aids, demonstrating how to check their engine oil level and breaking down the cost of an oil change compared to the cost of fixing major engine damage due to ignored oil changes can be great tools to encourage customers to come in for regular changes.

Getting back to the basics of understanding a vehicle can also be a great way to educate customers. Breaking down why oil is actually necessary for an engine as well as how fresh oil reduces friction and prevents engine wear and tear can be a helpful tool in spreading awareness on not ignoring oil changes. Many people are also unaware of what each light on their dashboard means, so they may not even realize their car needs maintenance.

Hanging signs with descriptions of what each dashboard light means can be an extremely helpful resource for customers to recognize when it might be time for maintenance.

If the experience is unpleasant and a burdensome task, the more likely the customer is to delay getting their oil changed — or go elsewhere when they finally decide to get the work done.

Be Transparent

Every vehicle make and model is different and it is important that customers understand how often their oil should be changed based on the car they drive. Clearly breaking down all of the factors that go into the frequency of oil changes helps to reiterate why it is important to not delay an oil change.

When meeting with customers, provide personalized recommendations based on the make and model of their vehicle, their driving habits and their environment. Sending them emails with personalized breakdowns of what their specific oil change routine should look like can also serve as a friendly reminder.

This won’t only help the customer understand how often they need to get an oil change, but it will help to strengthen your relationship with them.

Positive Customer Experience

There is often a stigma around the auto care industry. Delivering exceptional customer service during each oil change, ensuring your staff is well-equipped with knowledge to answer any questions and are attentive, will motivate customers to continue coming back for oil changes.

If the experience is unpleasant and a burdensome task, the more likely the customer is to delay getting their oil changed — or go elsewhere when they finally decide to get the work done. Investing in high-quality tools and technology to make the oil change process more efficient will also encourage customers to continue coming in routinely.

Staying engaged with your customers after their visit is another way to ensure they don’t delay their next oil change. After each oil change, it’s a basic practice to place a sticker on the car’s windshield with the mileage that they should come in for their next change.

But there’s more you can do. Sending out reminders via text message or email isn’t only a friendly way for customers to be aware of when their next oil change is coming up but can help keep them engaged with your business.

Motivating customers to make routine oil changes part of their regular car upkeep can help enhance the performance of their vehicles and ultimately extend their vehicle’s life. It can also help to strengthen the trust that they have in you, their auto care professional.

By embracing education, transparent communication and the enhancement of the customer experience, ignored oil changes can become a thing of the past.

Brian Michel is the vice president of operations at Grease Monkey

This article originally appeared in the August issue of CARS magazine

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As business evolves, shop members of the Automotive Aftermarket Retailers of Ontario got up close to the latest changes and challenges taking place.

They gathered in Mississauga, Ontario, at the Hilton Garden Inn Toronto Airport West for the AARO Trade Show & Training Event to hear from industry leaders and get both business management and technical training.

The three-day event starting on Sept. 12 kicked off with Alan Beech from Beech Consulting and an occasional contributor to CARS magazine. He gave a training course on handling the busy season and the chaos that comes with it. He dove into strategies to improve your business and be better prepared for the fall and winter by offering strategies for better inspections, tire sales, customer service, labour rate and more.

After lunch, Murray Voth from RPM Training talked about the management process shop owners need to undertake. He gave insights during the program into how to take a measured approach and ensure processes are in place to meet customer expectations, including 14 points for management to run the business successfully. He outlined expectations for techs and service advisors — but also what they expect from their boss.

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Once that wrapped up, it was on to the tradeshow, which featured Cam Capriotto of Remarkable Results Radio as the opening speaker. Attendees then got to visit the booths exhibiting and take in the latest in products and offers.

The next two days featured Lindertech training. Scott Shotten gave two sessions, one on engine mechanical diagnosis with electronic equipment and a second on efficient and effective network diagnosis.

The final day on Sept. 14 featured Brenden Steckler, whose presentations included a focus on a streamlined approach to diagnostic dilemmas.

Many attendees commended the training program with some noting it was some of the best they’ve received in some time.

Check out the Instagram reel highlight above and the photo gallery below.

AARO Training & Trade Show 2024

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Unlocking the secret to hiring the perfect candidate

In the fast-paced world of automotive repair, finding the right candidate for your shop can feel like searching for a needle in a haystack.

The key lies not only in the qualifications on paper but also in the intangible qualities that make someone a great fit for your team. Let’s delve into the art of hiring the perfect candidate, one who not only possesses the necessary skills but also embodies the values and culture of your shop.

A compelling advertisement

In the words of Steve Jobs, “The only way to do great work is to love what you do.” When drafting your job advertisement, remember that it’s not just about listing qualifications. It’s an opportunity to paint a picture of what makes your shop special in order to draw forward people with an affinity for the unique culture of your shop as well as the role itself.

Therefore, take your time to craft an ad that showcases the unique opportunities and supportive environment your shop offers.

Consider this approach: “Join our team at XYZ Auto Repair, where we’re not just fixing cars; we’re building relationships. Our shop is a place where teamwork thrives and every team member plays a vital role in delivering top-notch service to our customers. If you’re passionate about cars and value a supportive work environment where growth and development are encouraged, we want to hear from you.”

By highlighting the positive aspects of your shop and appealing to candidates who share your values, you can increase the likelihood of attracting the right talent.

Hiring the perfect candidate for your automotive shop requires time, effort and careful consideration.

Structured selection process

Once you’ve received responses to your job advertisement, it’s time to put your selection process into action. Remember, hiring is not just about finding someone with the right skills; it’s about finding someone who will fit in seamlessly with your team and contribute positively to your shop’s culture.

As the famous quote goes, “Slow to hire, quick to fire.” So, take your time to evaluate candidates thoroughly before making a decision.

Consider the following factors:

1. Personal Connection: During the interview process, pay attention to how the candidate makes you feel. The interview is a microcosm of their interpersonal skills and demeanour in general. Would you want to be reliant on this individual if you found yourself in a crisis because your vehicle unexpectedly broke down? Do they exhibit qualities that align with your shop’s values? Imagine how they would interact not only with customers but also with other team members. You are not just hiring a new employee, you are inviting a new member into your existing “work family.” If possible, schedule a trial day to observe their performance in a real-world setting.
2. Reference checks: Don’t underestimate the power of checking references. Reach out to previous employers and ask a simple yet insightful question: “Would you rehire this candidate?” Their response can provide valuable insights into the candidate’s work ethic, reliability and suitability for the role.
3. Personality profile testing: Consider incorporating personality profile testing into your hiring process to gain deeper insights into the candidate’s personality traits and characteristics. These tests can uncover valuable information that may not be immediately apparent during an interview.

Final Steps

Before extending an offer to a candidate, ensure that you have an employment contract in place. This document outlines the terms of employment, including job responsibilities, compensation and other important details. Having a clear contract not only protects both parties but also sets expectations from the outset.

Hiring the perfect candidate for your automotive shop requires time, effort and careful consideration. While the process may be challenging, finding the right person can transform both your business and your life for the better.

This article originally appeared in the August issue of CARS magazine

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As consumers express increasing optimism about their current lives, a new EY study highlighted the crucial role of loyalty programs in navigating economic challenges.

The 14th edition of the EY Future Consumer Index (FCI), a global study surveying 23,000 consumers across 30 countries, including 1,500 in the U.S., indicated that American consumers are optimistic about the future.

More than three-quarters (77 per cent) of consumers noted that they think their lives are the same or better now than three to four months ago. Despite easing inflation, the act of saving has become an ingrained consumer behaviour across demographics, with shoppers turning to loyalty programs, private labels, and discounts to cut costs on items they want and need.

Loyalty programs have become more critical than ever. For the past few years, consumers have been balancing a tightrope between brand loyalty and savings. Many consumers have foregone brand affiliation in favour of savings. In the U.S., 49 per cent of consumers noted they’d be willing to download a brand’s app just to receive loyalty promotions or exclusive deals, and 70 per cent would join a company’s loyalty program for free shipping perks. Additionally, 45 per cent used a discount code or voucher while online shopping in the last six months.

“Sales have gone from specific moments in time, like Black Friday and back-to-school, to consistent opportunities for deals — and strong loyalty programs elevate that culture of consistent savings even further,” said Kathy Gramling, EY Americas consumer industry leader. “At the same time, loyalty programs provide brands and retailers with invaluable consumer data to better inform products, programs, and personalized experiences. Winning brands are those that use the data found in loyalty programs to not only attract new customers but also retain and reward existing ones.”

Despite the shift towards online shopping during the pandemic, there’s still significant value in going to the store. The report noted that EY is seeing a notable pivot away from online-first shopping behaviour today. When asked about the main drivers to in-store shopping, 59 per cent of consumers said they make the trip in-store to see, touch, and try items before making a purchase, while 57 per cent noted a desire to bypass shipping.

Consumers have also begun to increasingly value human interaction during their post-purchase journey. More than half (56 per cent) of U.S. consumers noted that interacting with humans is extremely important during product returns and refunds, and an additional 55 per cent found it extremely important when looking to discuss questions or concerns about a product they already bought.

Security remains a significant concern that brands need to address. While consumers continue to shop online, brands must create a sense of security, especially as feelings of distrust rise among consumers. In the U.S., 63 per cent of consumers express extreme concern around online ID fraud and theft, and 60 per cent note extreme fear when it comes to data breaches.

“We are seeing an ongoing juxtaposition between the data consumers are now willing to share online and their concern around data privacy and security,” says Isaac Krakovsky, EY Americas retail leader. “This divide becomes even more evident when there are incentives and deals in play. For brands, this means security and communication around security is a must-have in driving long-term trust.”

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If a shop owner considers themselves integral to the daily operation of their business, they will have a tough time finding a buyer, warned an industry advisor.

Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, couldn’t stress this point enough while speaking at a recent conference.

“If you have a day-to-day job in the business — you are a service advisor, you are a technician — there is going to be a group of people looking to buy a shop that will no longer be interested in your shop,” he said during the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City. “Period, end of story.”

Those looking to buy a shop are looking for an investment. They want a turnkey operation. Otherwise, from their point of view, they’re not buying a business. They’re buying a job.

If the shop’s owner is working the front desk, has built a relationship for decades with customers and has decided to retire and sell, that could greatly alter the dynamic of the shop with that person gone. The success of the shop may be heavily tied to the shop owner being in the shop all the time.

After they leave, buyers will wonder if the shop will maintain the same level of excellence.

“So when you leave and you retire, I have to hire someone else or try and find someone on this, is this [level of success] going to be anything similar?” Demarest said, posing as a prospective buyer in this scenario. “You have 30 years of trust. You are probably the most trustworthy person here because these people have been dealing with you coming back here — am I going to have the same value of trust when you leave? Probably not.”

That’s why the owner removing himself from the day-to-day — and even the business entirely — is so important, he added. By not being there, the owner has put the business in a position to be sold. But that doesn’t mean they have to.

“If you get your business to a state where it’s profitable enough and you’re building this business to sell, it doesn’t mean that you have to sell,” Demarest pointed out. “The magic dream is … get your kids to run it, make them make all your profit, and you can just ride off into the sunset and live in Florida or whatever.”

If the kids aren’t an option, apply that thought process to a general manager, he added.

“If you can work yourself out of the business … then you can truly be in a position where someone comes to you” looking to buy rather than you searching for someone, Demarest said. “You can say, ‘Hey, everything’s for sale for the right price.’”

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If you want to take your auto repair business and life to the next level and if you’re eager to learn how to make significant changes, rest assured that it can be done. But I’m not going to tell you the path to getting there is easy.

In the May/June issue, we explored the concept of expansion to reduce stress and boost profitability in your business. This idea might resonate differently with various readers. Some of you might be completely satisfied with your current situation and that’s wonderful. I’m genuinely happy for you.

Others will feel that I don’t understand their struggles. They will feel the sentiments in the article are great but they simply don’t have time for this — life is just a constant struggle that you must put up with and nothing can be done. For you, I hope you take something out of this piece.

But for those I mentioned off the top, I understand the frustration of feeling like your efforts aren’t yielding the desired rewards or profits. This can be soul-crushing and quickly lead to a negative spiral, impacting multiple areas of your life.

It’s a tough reality. But the good news is that it’s not permanent. You can choose to change your situation, either on your own or with the help of coaching.

Here are the crucial questions to ask yourself:

1. What kind of business do I want to own? Will it be a community-serving business catering to all makes and models, or will you specialize in a specific type of vehicle?
2. What kind of services will we offer? Will you provide air conditioning, alignments or other specialized services?

Once you have clear answers to these questions, you’ve taken a significant step toward defining your future.

To build a scalable and repeatable business that grows, you’ll need to put in hard work in the short term. This might mean working evenings and weekends, working to reshape how you operate, rather than finishing jobs in the bay. This effort is about implementing measures to reduce unpaid work, increase productivity and build a sustainable business for the future. It’s about creating a legacy that will hold value when you retire.

There will be aspects of your business that you’re doing right, but there will also be gaps that need attention. Some areas might need immediate improvement, while others might be causing significant longer-term issues.

This is where the role of a coach becomes invaluable. A coach helps you see your business from a macro perspective, identifying what’s missing and providing tools and systems to get you moving forward. Remember, business change isn’t just about planning; it’s about taking action. It’s not about knowing what needs to be done, it’s doing it that is the hard part. That’s why sometimes we need a bit of a kick from an external source.

To illustrate, let’s go through several questions to ask yourself to assess where proactive changes can make a significant difference in your shop. One of the first steps to boosting productivity is evaluating your current processes.

It’s not about knowing what needs to be done, it’s doing it that is the hard part. That’s why sometimes we need a bit of a kick from an external source.

Improving Efficiency

• Are there tasks that can be automated or streamlined?
• What does your re-booking process and scheduling system look like?
• How are you preparing for the arrival of vehicles into your shop?

Enhancing Customer Experience

• Are you consistently receiving feedback from your customers with the sole intention of making your business better?
• Are you chasing a Google score but doing nothing to implement change inside your operation?

Expanding Services

• Are you offering additional services to add value and increase your revenue streams?
• Are you currently focusing only on mechanical repairs without considering adding services like detailing or sublets?

Training And Development

• Are you equally investing in both hard and soft skills for the team?
• Are you investing in strategic learning for yourself?
• Are you more ‘employee’ than ‘leader’ in your business?

Marketing and outreach

• What marketing are you carrying out?
• Does your daily process lead you toward or away from captive marketing with your existing customers?
• Are you involved in the local community?
• Are you ensuring that your marketing messages highlight what sets you apart from the competition?

Adapting to change

• The business landscape is continually evolving. How are you staying up to date with trends in the industry?
• How are you planning for upcoming new technology?
• What is your investment plan for the next three years?

Opening new locations

• Are you looking to expand into new locations?
• Can your existing location run without you for a week or two with no intervention? If the answer is no, then you should seek advice on your gaps.

Expanding your business involves a combination of strategic planning and proactive actions. You can create a thriving, profitable business by addressing the areas that need improvement and capitalizing on your strengths.

Whether you choose to do this on your own or seek the guidance of a coach, the key is to start making changes today. The journey might be challenging, but the rewards are well worth the effort.

Greg Aguilera is a director of IAC Canada, an organization dedicated to the management development of repair shops in Canada. He can be reached at greg@intautoconsulting.com.

This article originally appeared in the August issue of CARS magazine

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Canadian small business owners are showing “uncommon confidence” in the face of economic uncertainty, according to a recent survey.

The survey from Toronto-based Zensurance.com gathered responses from 1,000 small business owners, entrepreneurs and self-employed people from various industries, including retail, hospitality, consulting, construction and health and wellness. It found that a significant majority of businesses have experienced positive financial trends in 2024.

According to the survey, 58.5 per cent of respondents reported improved revenues compared to the first half of 2023, with nearly 20 per cent stating their revenues “soared to new heights.”

The positive signs may mean economic normalcy is building and that’s good news for the automotive aftermarket.

This optimism extends to future plans, with one-third of small businesses planning to hire additional staff in the next six months. Moreover, 24 per cent of respondents indicated plans to open a second workplace or office, and 30 per cent plan to introduce new services or products.

Confidence in business success remains high, with about seven in 10 small business owners expressing confidence in their prospects over the next six months. Among these, 36 per cent are “very confident,” while 33 per cent are “somewhat confident.” Despite ongoing economic challenges, 21 per cent of small businesses reported experiencing a “significantly positive impact” from the current state of the economy.

However, the survey also highlighted several concerns that continue to weigh on entrepreneurs. Cybersecurity emerged as the top issue, with 32 per cent of respondents citing the risk of a cyber-attack or data breach as a significant concern. Other major worries include theft and shoplifting (31 per cent), non-payment by customers (30.5 per cent), vandalism (26 per cent) and the risk of being sued (24.4 per cent).

“It’s encouraging to see such positivity among Canadian small businesses, even as they navigate numerous potential challenges,” said Danish Yusuf, founder and CEO of Zensurance.com. “Having a comprehensive insurance plan can help business owners maintain their confidence and success.”

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If you’re trying to better understand your customers and you know they’re into smart home technology, then they may be interested in an electric vehicle.

As electric vehicles continue to gain traction, a recent study from research and consulting firm Parks Associates found a growing trend among EV owners: A strong inclination toward adopting smart home technologies.

According to Parks Associates’ study, EV Charging at Home: User Demand and Preferences, 72 per cent of EV owners have integrated at least one smart home device into their households, significantly outpacing the 44 per cent adoption rate among non-EV households.

The study also looked at EV ownership, including charging locations, equipment preferences, user experience and future expansion plans.

Daniel Holcomb, Senior Research Analyst at Parks Associates, noted that while charging can be a stress point for EV owners, they are increasingly interested in tech solutions that coordinate energy usage, reduce costs, and conserve resources.

“The majority of EV owners find it highly valuable to have EVs coordinating with other devices for charging,” Holcomb said, “and 34 per cent are even willing to allow utilities to adjust charging times during peak energy demand.”

Some companies have developed home energy management systems that integrate EV charging with other home appliances. Some products are designed to work within a complete home energy management ecosystem, offering a solution for managing household energy.

Partnerships are also playing a key role in advancing this trend. In December, Resideo and Ford announced the EV-Home Power Partnership, which integrates EV charging with smart home systems. This collaboration aims to synchronize energy usage across various home devices, enhancing efficiency and cost management.

Holcomb believes that the future of home energy will be characterized by coordinated and orchestrated systems that leverage demand response technologies, with EVs playing a central role.

“Smart home device manufacturers and EV companies should explore partnerships that create linkages within the home and simplify the management of household energy,” he said.

Image credit: Depositphotos.com

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When a corporate entity acquires an entrepreneurial jobber business, the most profound impact on shops often stems from the shift in accountability and the loss of the personal, entrepreneur-to-entrepreneur relationships that once thrived.

The pressures facing jobbers today are certainly real. Parts proliferating requires more and more working capital for inventory, high capital expenditure costs with constant requirements for fleet replacement and high servicing costs eating into profitability from fuel to fleet maintenance. Generational jobber businesses more and more are looking for exit strategies and to capitalize on the demand from consolidators.

My family’s journey in the automotive parts business began in 1953 when my great-grandfather founded an independent jobber business. Through three generations of family leadership until, fresh out of university, I assumed leadership, acquired the business and eventually divested it. With over a decade at the helm, I’ve navigated the challenges of owning and operating an auto parts business. Running and owning the business made me aware of just how tough it is for my peers.

And now I have experience in selling a generational family business to a large corporation. Drawing from this, it’s clear that understanding these transitions is crucial for the industry.

In my executive role at Fix Network, overseeing our franchise network with mechanical and auto glass services, I’ve witnessed the profitability and growth opportunities for small business owners. This comes as changing trends emerged during the pandemic, forcing a decline in the number of shops in the Canadian market and reduced profitability among service centres in recent years. Shops employing strategic management techniques have been able to thrive, even amid macroeconomic challenges that impacted OEM vehicle sales like supply chain disruptions, inflation and rising interest rates.

As such, there has not been a consolidation within the service side of the business with the mechanical or glass service in comparison to what we have seen on the parts and distribution side of the automotive aftermarket in Canada.

However, industry consolidation of legacy businesses and jobbers on the distribution side of things is not at all a bad thing. Shops often benefit from increased inventory at the store level, access to more aggressive pricing programs in some cases and benefits that go with economies of scale.

The owners of the shops who were our best clients became great personal friends and those bonds went well beyond the walls of the parts stores and the shops. This cannot be taken lightly for shops.

The biggest impact from the shop perspective that I have experienced is the transition of accountability when a corporate entity does buy an entrepreneurial business. There is a real aftershock that takes place in the relationship the corporate staff then have with the shop compared to the entrepreneur-to-entrepreneur relationship the shops and jobbers often build in their respective markets.

The owners of the shops who were our best clients became great personal friends and those bonds went well beyond the walls of the parts stores and the shops. This cannot be taken lightly for shops. These relationships can’t be modelled into a business plan after a jobber has been purchased by one of the big distribution corporations.

In other words, these relationships can’t be easily replicated by corporate integration plans. While merger and acquisition growth delivers shareholder value and revenue targets, it sometimes drives shops to switch to another local jobber rather than endure the changes brought by a corporate acquisition.

So while the acquiring company believed the current clientele would stay with the new ownership, some shops may no longer consider the jobber their first call anymore and will move others up the list instead.

Overall, there is great value for shops in the power of the entrepreneur-to-entrepreneur relationship. The model of the traditional jobber store in Canada is certainly changing with the continued evolution of the industry landscape. However, there is a great opportunity for shops to build experience within their business seeing both the positive and negatives of these industry changes and providing perspective on how they perceive value out of their parts supplier.

Zakari Krieger is the Fix Network, Canadian vice president of Prime CarCare, responsible for the Canadian retail business, encompassing the Speedy Auto Service and Novus Auto Glass business lines

This article originally appeared in the August issue of CARS magazine

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With a more complex supply chain due to more players and reduced reliance on China, the question was asked of supplier leaders if customers would be willing to pay more if it led to a stronger supply chain that was more reliable.

The question was tackled by Gino Amador, president of Snap-on Equipment, and Eric Sills, CEO of Standard Motor Products during the MEMA Aftermarket Suppliers Vision Conference. They emphasized the critical balance between cost and resilience, highlighting the lingering impacts of past supply chain crises and the evolving expectations of customers during the session The Race to Mexico … and Beyond.

“Nobody will pay for theoretical resilience. But everyone will pay for actual resilience when the other guy can’t show,” Amador asserted, capturing the practical reality of customer expectations.

He then impressed upon the industry to build strong resiliency measures by paraphrasing an old proverb: “The people that are resilient don’t pray for an easier time, they pray for stronger shoulders.”

Sills empathized with consumers, understanding why supply chain resilience is a hot topic.

“I think it’s because there continues to be a certain amount of PTSD still coming out of [how] the supply chain was in the last couple of years,” he said, referring to the pandemic that left the aftermarket with empty shelves at times.

This ongoing concern drives customers to seek assurances from suppliers about their ability to withstand future disruptions, Sills added.

Customers, he further noted, are increasingly wary of relying too heavily on China.

“They’re expecting us to reduce our reliance on China. We’ve been talking a lot about supply chain diversification, the ultimate source of supply, so on and so forth. And so it’s clearly top of mind for them,” he explained.

This presents an opportunity for suppliers to demonstrate their supply chain strategies.

“We do satisfy a lot of what you’re expecting,” Sills said.

However, Sills acknowledged the challenge of balancing resilience with cost competitiveness.

“As the shelves get replenished … they may be willing to pay a little bit more, but not a lot more,” he said.

Customers expect suppliers to remain competitive while mitigating risks associated with low-cost products from China.

“It’s an ongoing dialogue with all of our customers. And I think that there’s receptivity to it. But it’s still going up against the low-cost product and people will take some risks with that,” Sills said.

Image credit: Depositphotos.com

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E-commerce auto parts market has experienced phenomenal growth, with sales exceeding $35 billion in 2023 in the United States — a 50 per cent increase over 2020 and more than triple the 2016 volume, according to Lang Marketing’s report, “E-commerce Auto Parts Sales Triple.”

Lang Marketing’s analysis divides the e-commerce auto parts market into three major categories: do-it-yourself (DIY), business-to-business (B2B), and online-to-offline (o2o).

DIY e-commerce involves auto parts purchases made by individuals rather than professional technicians or businesses. B2B e-commerce includes transactions between businesses such as distributors, retailers and installers. Online-to-Offline e-commerce covers the online purchase of auto parts that are then installed offline by authorized repair shops.

The report found big shifts in the e-commerce shares of these segments. DIY, which dominated nearly three-quarters of the e-commerce market in 2016, has seen its share decline to less than 60 per cent by 2023. In contrast, o2o volume has grown significantly, expanding its share by about two-thirds over the past seven years. Meanwhile, B2B transactions, though still representing the smallest share of the e-commerce auto parts market, have doubled in size since 2016.

Growth dynamics also vary widely among the three categories. While DIY sales captured the largest share of e-commerce product growth over the past seven years, their overall market share has diminished. Transactions in the o2o space, however, have taken a larger share of the total e-commerce aftermarket growth between 2016 and 2023 than their current market share reflects. B2B sales have similarly outpaced their market share in contributing to e-commerce growth during the same period.

The report also noted a shift in the sales channels for e-commerce auto parts, particularly between platforms and e-sellers. The shares of first-party (1P) and third-party (3P) segments of e-commerce auto parts sales have changed over the past seven years, reflecting broader trends in the marketplace.

Image credit: Depositphotos.com

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Tire pressure monitoring systems (TPMS) have been on the market for close to two decades, but the ‘new’ technology continues to pose challenges for several shops and tire stores.

So much so that several TPMS manufacturers have come together to urge shops across North America to make sure their tools are up to date. At AAPEX 2023, representatives from Continental, Schrader TPMS Solutions, Bartec TPMS and ATEQ TPMS Tools held a press conference to raise awareness about the lack of software updates being performed by shops. The urgency behind the call revolved around ensuring vehicle safety, maintaining vehicle performance and boosting a shop’s bottom line.

As Yanick Leduc, head of training and tech support at Schrader, pointed out, current TPMS technology is becoming quite advanced, offering Bluetooth low energy (BLE) transmission capabilities, high-pressure and high-temperature warnings and even tire burst detection warnings.

“These advancements are crucial because maintaining proper tire air pressure is directly linked to vehicle handling and braking performance,” said Leduc. “The more sophisticated our TPMS systems are, the safer our roads become.”

Scot Holloway, CEO of Bartec, said that although the introduction of TPMS presented significant challenges to tire service companies, it is vital that shops do what they can to maximize their return on investment.

“If your TPMS tool is not up to date, you are certainly missing out on vehicle coverage which leads to lost sales,” said Holloway. “If you use programmable sensors, you could be missing sensor coverage as well. If you don’t have the coverage, you cannot fix the vehicle and that is a lost sale, or worse, a TPMS that is not functional.”

One of the keys to ensuring shops are getting the most out of their TPMS tools is making sure the software is up to date.

“The best-case scenario is to have the tool update itself during off-hours so as not to interfere with business,” said Holloway, adding that his company will soon be launching the ability for its TPMS tools to power on, download the update over Wi-Fi and automatically install the update. “This new feature will go a long way in making sure our customers are always up to date and enjoying the latest features and best coverage.”

Mike Rose, OEM and industrial TPMS sales manager with ATEQ, says most shops and owners don’t realize how simple it is to keep their TPMS software up to date — the latest generation of tools have Wi-Fi included for easier updating.

“Some users think TPMS doesn’t change, and don’t understand the importance of proper coverage until they can’t fix the car and end up calling support, only for it to be fixed by updating the tool,” said Rose. “If you are not updating regularly, you are missing out on features and coverage, and that could be costing you money in vehicles you could service or having to update while the vehicle is tying up a bay.”

Leduc also stressed the importance of not just having a TPMS tool with Wi-Fi connectivity, but for manufacturers to improve the updating process, making it faster and more efficient.

“Unfortunately, we see too many times users having to repeat the update multiple times because the Wi-Fi connection was lost or the update process failed at 70 or 80 per cent completion,” he said. “Getting notifications on tools when new software is available, or even a push software update, which is already available in some cases, would be the next step.”

Leduc says cost is rarely a factor when it comes to shops updating their TPMS tools, as many offer free software updates for three to five years. Instead, he says it’s a combination of factors.

“Not knowing how to do it or not receiving the training, being unaware that updates are available, not finding the time to do it, not registering the tool, or not downloading the computer program needed to execute the tool’s software updates, which again comes down to time,” said Leduc.

“Proper tire pressure has always played a role in stopping distance and other traction-related issues and is critical to having all the systems around braking to work as well as they were designed.”

Holloway agrees that awareness plays a role when it comes to software updates, but added that the notion of “free software” can be misguided.

“Tool software development is complicated and costly. Tool software development is engineering and research, it is vehicle and sensor testing and validation,” he said. “All of this is a huge undertaking that must be done in order to make sure the tool, the sensor and the vehicle are working according to specifications.

“My advice is always to be wary of ‘free software.’ If it’s free, do they really owe you anything? Bartec TPMS charges for software, and as a result, we produce three to five updates per year.”

Although he doubted that a standardized relearn procedure across all vehicle manufacturers will happen in his lifetime, Leduc noted that BLE technology looks promising.

“BLE TPMS offers so much more: Stronger communication between the vehicle and the sensors, more flexibility for advanced security features and more data can be exchanged between the vehicle and the sensors through bidirectional communication,” he said. “This allows the sensor to be updated with new software and features without the need to dismount the tire or reprogram the sensor with a TPMS tool.”

While TPMS tools continue to evolve and shops try to keep up with recurrent changes and updates, the importance of maintaining correct tire pressure cannot be overlooked, from both an efficiency standpoint and safety.

“Proper tire pressure has always played a role in stopping distance and other traction-related issues,” said Rose, “and is critical to having all the systems around braking to work as well as they were designed.”

This article originally appeared in the August issue of CARS magazine

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With the rising prices of new vehicles, car owners are placing greater emphasis on maintaining their current vehicles. To help, they’re reaching for premium brand products, according to a recent survey.

A survey of 2,000 American car owners, conducted by Talker Research on behalf of Pennzoil, found that 73 percent of respondents are taking better care of their vehicles as new car prices continue to climb. This trend is driving a significant preference for brand-name products in vehicle maintenance, with 57 per cent of car owners opting for well-known brands over private-label alternatives, which only garnered 34 per cent of the preference.

Nathan Shipley, executive director of industry analysis in automotive at Circana, showed data at AAPEX 2023 from the last three years and it all suggested that numbers are flat in the private label area.

“But there’s not some major shift to private label like I think a lot of us would expect as we have gotten into a little bit tougher economic times this year,” he said during his session, Aftermarket Outlook 2024.

He noted that higher-income consumers are frequenting the aftermarket more often. Retailers, he said, need to account for that when thinking about their product offerings.

The survey noted that vehicle maintenance products are among the most regretted private-label purchases, ranking in the top three across all product categories in the past month. This finding further underscores the importance consumers place on trusted, high-quality brands for maintaining their vehicles.

Motor oil, in particular, is a key focus for many car owners, especially those who rely on professionals for maintenance services, known as DIFM (do-it-for-me) consumers. Nearly two-thirds of these consumers are willing to spend more on motor oil to protect their vehicle’s value over time. Brand familiarity plays a critical role in their decisions, with nearly 60 percent of DIFM consumers stating that it influences their purchasing choices.

The survey also found that consumers believe premium brands perform better over time and are more trustworthy compared to private-label products.

“Consumers are recognizing the long-term benefits of investing in premium products for their vehicles,” said Amanda Luce, Pennzoil Brand Manager. “This survey underscores that consumers see the tangible benefits of choosing premium brands … knowing that their investment will help to drive value for their vehicle over time.”

Image credit: Depositphotos.com

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Image credit: Depositphotos.com

As e-commerce heats up, a new study shows that high delivery costs and complicated checkout processes are driving shoppers to abandon their carts, underscoring the critical need for retailers to perfect their delivery game.

A new consumer study conducted by Retail Week in partnership with nShift highlighted the critical role of delivery in the success of e-commerce retailers. The study, Shopper Unlocked: Inside the Minds of 1,000 Consumers, found that 95 per cent of shoppers have abandoned a shopping basket at some point. High delivery costs are the leading cause, with 62 per cent of shoppers citing this as their reason.

Complicated checkout processes were blamed by nearly a quarter (23 per cent) of shoppers, while around 20 per cent pointed to poor delivery timeframes and unsatisfactory return policies as key issues.

Customers highly value convenience in their shopping experience, with nearly two-thirds (63 per cent) of respondents indicating that the ability to choose the time and date of delivery is very important. Additionally, 62 per cent of shoppers stated they would not purchase again from a retailer after a single bad delivery experience.

David Carey, senior vice president of customer experience at nShift, emphasized the importance of flawless delivery experiences.

“These results hammer home just how little patience most consumers have for bad delivery experiences — and how important it is for retailers to get deliveries right every time,” he said in the announcement about the survey findings. “As we move into the second half of the year and the peak shopping season, the most successful retailers are likely going to be those that focus on delivery and experience management as a business-critical point of difference.”

To help retailers prepare, nShift offered five key tips:

1. Offer a broad range of delivery choices: Retailers must provide a variety of fulfillment options, including different delivery costs, times, and locations. Doing so can increase conversions by 20 per cent.
2. Clearly communicate on returns: While free returns are popular among shoppers, they may not be feasible for all retailers. Regardless of the policy, it must be clearly communicated and prominently displayed on the website.
3. Use returns to your advantage: Returns are inevitable during peak periods, but with efficient processes, retailers can convert up to 30 per cent of returns-related refunds into exchanges and repeat business.
4. Take ownership of the post-purchase experience: The relationship with the customer does not end at checkout. Personalized communications, branded messaging, and real-time tracking can enhance the post-purchase experience, fostering customer loyalty and repeat purchases.
5. Ensure your core delivery management capability is up to scratch: Retailers need multi-carrier capabilities to ensure transport capacity during busy periods and offer the range of delivery options that shoppers seek, including local pick-up points.

“Customers expect delivery to be sculpted around their lifestyle,” Carey said. “It will be no different as peak season draws near. Being match-fit for peak season depends on taking the right steps now, so retailers can truly differentiate through deliveries.”

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A new report found that job candidates are frustrated with long waiting times and poor communication in the hiring processes.

Insights from Cronofy’s annual Candidate Expectations report revealed the increasing psychological burdens candidates face due to prolonged interview scheduling and lack of communication.

Cronofy, an embedded scheduler for teams, surveyed 12,000 candidates across seven countries in Europe and North America, to gain insights into what candidates want out of the hiring experience.

Candidates from the U.K., France, Germany, USA, Spain, Canada and the Netherlands shared that long wait times to schedule interviews, ghosting and a lack of communication are placing higher psychological burdens on candidates than ever before.

The most frustrating issue in recruiting, according to 28 per cent of candidates, is lack of responsiveness and poor communication. Neurodiverse candidates feel the effects of inefficient interview processes even more keenly, reporting higher levels of stress at 56 per cent, compared to the global population’s 38 per cent.

Amidst layoffs, candidates reported feeling that the market is starkly less stable compared to previous years. In 2024, a higher proportion (36 per cent) of candidates are waiting a month or more before disengaging from an interview scheduling process, up 12 per cent from last year. Just 12 per cent of candidates would disengage after one week, which is less than half compared to 2023.

The percentage of candidates expecting to wait a month or more for their first interview has nearly tripled from last year, rising from 5 per cent to 14 per cent. The largest proportion of candidates (31 per cent) report that their first interview took as long as 2-3 weeks to schedule, presenting a missed opportunity for recruiters looking to recruit top candidates, the company observed.

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Worldpac executive vice president Bob Cushing speaks during Worldpac STX 2024 in Nashville

The future of Worldpac is now clearer following the long-awaited announcement about its next owner.

Advance Auto Parts announced on Aug. 22 that it has agreed to sell Worldpac for $1.5 billion in cash to funds managed by global investment firm Carlyle. The transaction is expected to close before the end of the year.

Worldpac was put on the block in November last year after Advance president and CEO Shane O’Kelly said he’s been working with the board and management in reviewing the business.

Read more: Experts offer their thoughts on the sale

Advance’s Canadian business, Carquest, was also said to be for sale though no announcement or updates about it have been provided.

“The sale enables our team to sharpen their focus on decisive actions to turn around the Advance blended box business,” O’Kelly said in an announcement. “Proceeds from the transaction will provide greater financial flexibility as we continue our strategic and operational review to improve the productivity of the company’s remaining assets and better position the company for future growth and value creation.”

He went on to thank the 5,000-plus members of the Worldpac team over the last 10 years, when Advance acquired Worldpac.

Carlyle is no stranger to the aftermarket and automotive as its portfolio includes the likes of Axalta, specialty chemicals company Nouryon and Allison Transmission.

“We are excited to partner with Worldpac, a great business operating in attractive markets,” said Wes Bieligk, a partner, and Katherine Barasch, a senior member of Carlyle’s Global Industrials investing team. “Our proven track record in executing complex carve-outs position us uniquely to support Worldpac and its team as an independent company.”

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There are two ways to draw clients into your auto repair shop: You can hunt them down or farm them, according to a shop coach.

Hunting would be akin to reactive marketing. Shops were busy during the pandemic — but what happens as business levels off? You’re looking at your schedule and realizing you don’t have the same business you did the last few years.

“And then we scramble,” observed Rick White, president of 180Biz. “And here’s the problem with that: I call that reactive marketing. It is the most expensive and least effective marketing you’re ever going to do. It’s dialling for dollars. This is where you’re calling declined repairs, you’re doing this, you’re doing that to just try to get something in that day.”

And it doesn’t often work successfully. It’s the hunting mentality where, to use a caveman example, the hunter goes out in the morning and hunts down food or else they’ll starve. To use an example in the auto repair world, someone comes in with their vehicle and the service advisor tells them they need $4,000 worth of repairs. The client walks out and the shop forgets about them.

The industry needs to get better at farming where the seeds are planted for tomorrow’s harvest.

“So we’ve got to get really good at follow up where someone says no,” White said during the presentation Business Boss Leader: From Creeper to Leader at the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo in Kansas City.

He pushed for greater exit scheduling.

“Nobody should walk out of your shop without their next appointment,” he urged. “Sometimes two: One for the repair they need in two weeks and then the service in six months. But they’re going to have appointments every time.”

Because when there’s nothing on the docket for the day, the fear builds up. White called it “fear stack,” which happens when the shop owner worries about the lack of cars coming in, then the lack of money to make payroll, then fearing staff are going to leave, the shop will shut down and so on.

“And it’s because we want to plant the seeds today and we want to reap the harvest today — and nature doesn’t work that way,” White said.

He suggested this solution: Keep a panic button at a set number of days out. Don’t wait until you’re zero days booked out to panic — do it at five days out, or whatever set number makes sense for you.

That means marketing and doing things to attract customers all the time. Send mailers. Make calls to those you haven’t seen in a while. Do something to keep business constantly churning.

“If you do that you’ll never be slow a day in your life,” White said.

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Image credit: Depositphotos.com

In the fast-paced world of automotive service, trust and timeliness are two keys to customer satisfaction, an industry coach emphasized.

Those were just a couple of key items a customer wants out of their automotive service experience, Greg Bunch, a trainer with Transformers Institute and a multi-shop owner explained at the recent Worldpac Supplier and Training Expo. During the session, Superior Service Advising: The Art of Trust-Based Selling, he outlined that service centres need to focus on trust, timeliness and quality of service when a customer enters the shop.

Bunch stressed the importance of defect-free service.

“Service with no defects,” he explained, highlighting the anxiety customers feel about the quality of repairs.

“When they bring the car into a shop, they have anxiety that their car is not going to be fixed right. Most of them have had a bad experience somewhere,” Bunch said, adding that simply getting the job done right is an expectation, not a bonus to the customer.

Bunch underscored the role of service advisors as project managers once a sale is made.

“Service advisors, are we not the project manager once that sale was made? Now I know some shops have a dispatch person. [But] at the end of the day, if I’m promising Miss Jones that the car’s fixed correctly, I’m owning that. When that car is not fixed right, who is she going to blame: The guy in the back or you?” he asked, stressing the importance of accountability.

Timeliness, Bunch noted, is both a perception and a reality that needs careful management. Customers who drop their cars off early often expect immediate attention. In their mind, being at the shop right when it opens at 8 a.m. means their vehicle is being pulled through the bay doors at 8:05 a.m.

“Unless you ask them what their expectation is — and then manage it with what the reality of the situation is — you may have an irked customer on your hands,” he observed. “It’s on the shop to set the expectations of timeliness.”

Transformers Institute’s Greg Bunch speaks during a class at Worldpac STX 2024 in Nashville.

Bunch further pointed out that the perception of how long tasks should take has been skewed, with many customers conditioned to expect very short wait times for an oil changes thanks to quick-job facilities.

To manage these expectations, Bunch advised clear communication.

“Now if I reset that expectation and say, ‘Hey, Mr. Jones, we think [the job will take] an hour, an hour 15 minutes, but here’s why we do it: We have an ASE certified technician inspect your vehicle from bumper to bumper. We’re going to give you a complete health report. We are not just a place to change his oil. We look at the whole car.’”

This approach allows customers to decide if the service fits their needs and if they are willing to wait, he added.

Another critical aspect Bunch highlighted was the importance of customer service: Someone who is nice to them.

“Can you believe that? The gall of some people — they want people to be nice to them. Unbelievable,” he said tongue-in-cheek, underlining that being personable and kind is a top priority for customers.

“People buy from people that they know like and trust,” he added.

Bunch also emphasized the value of building long-term relationships with customers.

“People that know you are going to come back to you. They’re going to give you repeat business. Hopefully, nobody here works in a shop where their policy [calls for] a one-hit-wonder — cars come in, hit them as hard as they can and we don’t care if they ever come back,” he said.

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Despite the abundance of job openings, many workers are choosing to stay put.

A new report from business consulting firm Robert Half found that only 35 per cent of workers plan to look for a new job in the second half of 2024. That’s way down from the 49 per cent who sad so during the same period last year.

The trend, dubbed “The Big Stay,” is evident across all generations. The survey found that job search plans have decreased year-over-year, with Gen Z seeing the most significant decline from 74 per cent in 2023 to 44 per cent this year. Millennials followed with a drop from 63 per cent to 45 per cent, Gen X from 44 per cent to 26 per cent, and Baby Boomers from 23 per cent to 13 per cent.

A key factor contributing to this trend is high job satisfaction. The research reported that 77 per cent of workers are generally happy in their roles, and 85 per cent report having a good work-life balance. The top reasons for this satisfaction include competitive salaries with regular merit increases, flexible work locations and schedules, fair workloads and job expectations, positive work culture and team dynamics and supportive managers.

The decrease in job search activity doesn’t stem from a lack of confidence among workers. Nearly three-quarters (73 per cent) of those surveyed feel confident in their professional abilities and have actively taken steps to enhance their skills and marketability.

“In the past few years, professionals made career moves to take advantage of the many job openings and improve their personal and professional lives,” said Dawn Fay, operational president of Robert Half. “While they are now reporting high job satisfaction levels in their current roles and aren’t actively in a job search, many are still taking steps to enhance their skills and ultimately increase their marketability for any future moves they might make.”

Employers must be mindful of potential missteps that could deter prospective candidates. The survey revealed several deal-breakers, including not listing a salary range in job descriptions (41 per cent), requiring on-site work with no remote options (37 per cent), not emphasizing company culture (30 per cent) and prolonging the interview process (28 per cent).

“In the era of The Big Stay, employers need to take into consideration what workers want and come to the table with competitive offers,” Fay observed. “With skilled talent at a premium and workers feeling satisfied in their current role, employers can’t afford to make mistakes that could deter prospective candidates from applying to their open positions.”

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Think about all the Mercedes-Benz vehicles on the road today. Now think about how many Sprinter vans are out there performing crucial work that keeps commerce moving. What happens when a fleet of those vehicles goes down?

If the operator wants to go to the aftermarket, they may be out of luck.

Michael Waddle is a technician at Precision Auto Service, a shop owned by his father Scott, in Langley, B.C. They service many Sprinters. But there’s a problem: These vehicles are difficult to diagnose, service and repair because Mercedes-Benz Canada is seemingly making it difficult.

Listen to the episode now: Click here

In order to access these vehicles, a nearly-$50,000 tool must be purchased. That’s far beyond other automakers that charge under $1,000 in some cases for similar equipment.

However, Michael pointed out that Mercedes-Benz Canada isn’t necessarily violating the Canadian Automotive Service Information Standard (CASIS) agreement, signed back in 2009. They are making the tool available. But he believes Mercedes-Benz is intentionally being difficult in this area, pricing it at an unattainable level.

The tool is more easily accessible in Europe and the U.S., he says in this episode of Auto Service World Conversations with host Adam Malik. He spoke about the challenges he’s faced, what the aftermarket is up against and why this could be a larger issue.

We reached out to the automaker for comment but didn’t receive a response. When we followed up, a spokesperson for Mercedes-Benz Canada said they would get back to us but did not.

Michael believes it is fair to pay for such access but the asking price is neither fair nor reasonable. It blocks the aftermarket from obtaining the necessary tools and, Scott noted, puts commerce at risk as dealers are unable to keep up with the repair work due to the volume of vehicles.

He’s also been in touch with various working groups, such as the Automotive Industries Association of Canada to work toward a resolution. AIA Canada told Auto Service World that it has shared information about this issue with the task force for CASIS review and action.

“This is yet another example of how independent shops are left at a disadvantage and illustrates why legislation is needed,” AIA Canada said in a statement to us.

The group echoed Scott’s message about the issue of disrupting business if these vehicles break down and can’t be serviced by a dealer, especially in more remote locations where the aftermarket may be the only viable option for repair.

“The commercial interests at stake and the profits that vehicle manufacturers derive from these methods have resulted in a worldwide awareness that voluntary agreements do not work,” AIA Canada said.

The CASIS agreement is a voluntary agreement between automakers and the aftermarket. It is designed to ensure the aftermarket has access to service information, diagnostic tools and training information.

However, AIA Canada pointed out that the current agreement needs updating.

It “has not kept pace with the rapid advancements in technology and does not meet the needs of Canadians and the vehicles of today and tomorrow,” the group said.  “We are continuing to advocate on behalf of our members, who continue to provide us with feedback on the barriers they are encountering. AIA Canada has identified outdated sections of the agreement that require amendments, along with an enforcement piece, if it is to function as intended.

“In the absence of an updated agreement, AIA Canada will continue to advocate for legislation to ensure fair competition, consumer choice, and continued access to reliable, essential and affordable vehicle service and repair.”

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A cheeky new ad campaign from Midas is warning vehicle owners about bad service (B.S.) from their auto repair professionals.

The Don’t Put Up With B.S. — the B.S. meaning ‘bad service’ — campaign comes after the company surveyed 2,000 people across North America and half of the respondents saying they’ve experienced bad service in auto care. Two-thirds reported that they’ve been mistreated in a repair shop at least once — they felt pushed into unneeded services, that they were being ripped off or pressured.

“We know that consumers are fed up with the bad service they experience in the auto care industry, and we’re not shying away from this problem, we’re tackling it head-on,” said Lenny Valentino, Jr., president and chief operating officer of Midas, which has nearly 2,100 franchised and licensed locations in 20 countries. About 1,200 of those locations are in Canada and the U.S.

The company recently rolled out a new training program for franchisees and their employees, outlining how shops can be better partners with customers, provide straightforward information — like what needs fixing now and what can wait — and work together to problem-solve car care solutions.

It’s new campaign will include a series of ads across streaming services, digital channels and social media. Out-of-home-boards in Toronto, Vancouver and other U.S. cities will also feature the campaign.

“The campaign conveys examples of the bad service consumers have faced in the auto repair industry, like being talked down to or forced to urgently make a decision, with humour and a call to inspire real change,” the announcement from Midas said.

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Improperly valuing how much rent you charge to yourself as the landowner and shop owner can mistakenly impact your financials when looking to sell your business.

Rent considerations are essential when looking to either buy or sell an auto repair shop. It could be the make or break of a deal.

A shop owner who also owns the land is likely giving themselves a large break on rent. This can cause significant issues, warned Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, which deals exclusively with the automotive aftermarket.

The shop owner could be charging rent at a land value that was done 10, 20 or 30 years ago. When was the last time the shop owner had an appraisal done? Land values have shot up in recent times so that rental payment that was figured out decades years ago may be out of whack today.

Because if a shop owner is serious about selling, they need to figure out the fair market value of renting that property if they keep the land in the transaction. The buyer’s rental payment could double. So that information needs to be in the financial documents, Demarest said during the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

“So even though it looks like his business was profitable … it was severely, severely diminished” once the proper rent calculations are added in, he explained.

If it ends up that rent should be doubled, the buyer will now be paying that new amount. The shop’s profitability going forward isn’t what was thought to be believed from the onset of negotiations.

“From a tax perspective, nine times out of 10, how much you pay yourself in rent does not save money on taxes, does not make you money on taxes, it has no bearing in mind,” Demarest said. “You are literally taking money out of your right pocket, putting it in your left pocket.”

What a shop owner should be doing is paying rent at fair market value at all times. This is more attractive to the buyer because they see what the rent’s been for the last five years and have a good idea of what their expenses will be.

Furthermore, shop owners typically build their businesses to make enough money to cover their expenses. So if a shop marks down its rent as $150,000 when it should be $300,000, there’s a gap that’s not being covered.

And if the rent is kept low for the new buyer, the seller isn’t getting proper value for their shop.

“So if I’m a new person, I’m coming into the shop, I’m buying a shop that does $1.5 million a year that I have to commit $300,000 of that to rent, [that’s] 20 per cent,” Demarest said.

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For mid-size retailers, a flawless delivery experience is essential for retaining customers and driving growth, according to recent research.

Deliveries are a make-or-break factor for online shoppers, who rarely buy again from retailers that get deliveries wrong, said global delivery and experience management company nShift.  Whether an up-and-coming or mid-size retailer, focus on building the best delivery experience to build customer loyalty and accelerate growth is essential.

The group’s guide, How Mid-Size Retailers Can Drive Ecommerce Success with Deliveries, noted that retailers sending between 10,000 and one million parcels each year should place delivery management and experience software at the heart of their investment priorities.

The guide explained that retailers need to strengthen the customer experience, promote growth, make the best use of data and keep abreast of future innovations.

It offered the following suggestions to ensure retailers are providing the best delivery:

• Scalability: The ability to tap into a ready-made carrier library with over 1,000 connections provides relevant choices for customers at checkout and allows retailers to ship to new customers overseas as easily as to those in their home country.
• A flexible platform for the long-term: Retailers’ needs change as their business develops, but they can ill-afford the cost and disruption of continually adapting their systems. The right platform offers the flexibility to customize, integrate and plan around evolving needs.
• Access to real delivery innovation: What may seem like a cutting-edge customer experience today soon becomes yesterday’s news. Retailers can stay ahead of these trends by sourcing software from companies that continually invest in new services.
• Cost-effectiveness: Proper delivery management and experience can improve warehouse productivity, increase conversion rates, and boost sales. nShift provides a clear pathway for mid-size retailers to see returns on their delivery management investment.
• Integration with key business systems: The delivery and experience management platform plays a crucial role in a complex retail technology ecosystem that includes ERP systems, shopping carts, warehouse management, and more.

“The delivery experience is a crucial part of the wider customer journey. What happens after customers click ‘buy’ determines whether they shop again,” said Jeroen Terheggen, vice president for mid-market at nShift. “Many mid-size retailers may think they can economize by managing without a delivery and experience management system, or by building their own. That’s a false economy.”

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The top job of a service advisor is to get a customer to come through the door when the auto shop’s phone rings, even if that customer is just trying to get the price of a repair.

Jay Huh, a business coach at Shop Fix Academy and owner of CarMedix in North Carolina, called it “curb selling” during the session How to Run your Shop Stress Free at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

The customer is calling to get a price on a job. But it can be impossible to offer a proper quote over the phone. The customer may think the water pump is the problem. What happens when you quote them the price for a water pump replacement, they bring the car in and it turns out to be an issue with the head gasket?

“And then the quote goes from being $800 over the phone and then suddenly it’s $4,000. You think the customer’s going to be happy?” Huh asked.

Or, say the problem is indeed the water pump. But the customer tried to work on it themselves and every single bolt is stripped. “What then? Are you still going to charge them $800?” Huh wondered.

So never price over the phone, he urged.

But never discount their value as a customer. Just because they asked for a price doesn’t mean they’re a bad customer. They’re not going to ask if your techs are Red Seal or ASE Certified.

“What’s the only question that our customers know how to ask? It’s the price,” Huh explained. “We automatically write them off” when they ask about price.

Rather than dismissing the customer outright, the service advisor should be asking follow-up questions to get the customer through the door. If they say it’s the water pump, ask them how they know that. Suggest to them to bring the vehicle in to make sure.

If they say another shop said so and they’re doing price comparisons, tell them to bring it in for a second opinion. Offer a free 15-minute inspection of the vehicle. Explain to them that you’ll have your master technician go through the vehicle to make sure the issue is with the water pump. Offer for them to come in at a specific time.

Tell the customer: We’ll give you an accurate price. I don’t want to just throw a price out there. I want to give you a price we can stand behind.

“Would that not get the customer in the door? Does that not build value for your shop?” Huh said.

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A new report has found high levels of burnout among Canadian workers. The latest Telus Mental Health Index reported that 42 per cent of Canadians feel mentally and physically exhausted.

The index examined the mental health of employed people in Canada, the United States, the United Kingdom, Europe, Singapore, New Zealand and Australia. The Canadian report revealed that too much work cited as the top cause of burnout. The index also found that 33 per cent of workers believe that artificial intelligence will have a positive impact on their industry.

“There is no question that AI’s advancement will bring significant benefits, potentially as pivotal as the industrial or internet age,” said Paula Allen, global leader of research and client insights at Telus Health. “Organizations have the opportunity to engage employees in this evolution by ensuring that AI tools and training are readily accessible to employees, and enabling them to explore the technology firsthand so they can discover the ways it benefits them in their own work. As with any change, the best way to implement change is to engage people from the start, empowering them to grasp the possibilities and contribute valuable insights.”

The index also found that 17 per cent of workers are considering upgrading their AI skills. Managers and younger workers are at least twice as likely as non-managers and workers over 50 to be considering upgrading their skills related to the use of AI. Parents are nearly twice as likely as non-parents to consider upgrading their AI skills.

Almost half of workers believe that AI will have a positive impact on healthcare. However, workers under 40 are nearly twice as likely as workers over 50 to find it increasingly difficult to be motivated to do their work.

“It’s clear that a significant portion of employees are grappling with motivation and burnout,” said Dr. Matthew Chow, chief mental health officer at Telus Health. “Personal issues, excessive workloads, and a lack of recognition are among the contributors to burnout. Introducing AI tools thoughtfully and responsibly within organizations can assist employers in streamlining repetitive and low-value tasks to assist with the workload issue. This also can create space for employees to engage in innovative and strategic endeavors that are more meaningful and productive.

“Additionally, creating a supportive environment is paramount. By prioritizing employee wellbeing, offering adequate support and fostering a healthy culture, organizations empower their teams to avoid burnout and thrive in the workplace.”

While many workplaces offer employee assistance programs (EAP) that could help support employees in situations of burnout, Telus Health research reveals that two-in-five workers in Canada do not know what an EAP is. The mental health scores of workers who don’t know or report that their employer doesn’t offer an EAP is at least three points lower than workers with an EAP.

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As the world increasingly embraces e-commerce, a research and advisory firm is predicting a sharp rise in global online retail sales by 2028, emphasizing the need for retailers to refine their omnichannel strategies.

But Canada may not grow as quickly due to some bigger hurdles than other countries, specifically the U.S.

Forrester predicted that total global online retail sales will grow from USD$4.4 trillion in 2023 to $6.8 trillion by 2028, reflecting an 8.9 per cent compound annual growth rate (CAGR). The report, Global Retail E-Commerce Forecast, 2024 To 2028, provided a five-year forecast for total, online and offline retail sales across 40 countries around the world.

Despite the substantial growth in e-commerce, the report indicates that 76 per cent (or $21.9 trillion) of global retail sales will still occur offline in 2028. Consequently, retailers must continue investing in omnichannel strategies to ensure a seamless shopping experience both online and offline.

The report further highlights the varying maturity levels of retail e-commerce globally. Advanced economies like the U.S., the U.K. and South Korea exhibit more maturity due to higher internet penetration and digital literacy. However, as smartphone adoption and mobile commerce become more widespread, emerging markets in Asia Pacific, Eastern Europe, and Latin America are rapidly catching up.

This swift adaptation is reshaping the global e-commerce landscape, offering new opportunities for businesses and consumers alike.

Looking ahead to 2024 and beyond, Forrester anticipates continued growth momentum for online retail sales worldwide. In the Americas specifically, online retail sales in the U.S. are projected to reach $1.6 trillion by 2028, accounting for 28 per cent of total retail sales in the country.

However, e-commerce is more mature in the U.S. compared to Canada, where online retail sales are expected to reach $83 billion by 2028. Forrester’s announcement noted that Canada lags behind the U.S. in e-commerce penetration due to lower population density, a smaller market size, and slower consumer adoption.

In Latin America, online retail sales in the top six countries — Brazil, Mexico, Argentina, Colombia, Peru and Chile — are expected to grow from $109 billion in 2023 to $192 billion by 2028.

“The growth of online marketplaces, social commerce, livestream selling, and direct-to-consumer commerce will accelerate global online retail sales growth over the next five years,” said Jitender Miglani, principal forecast analyst at Forrester. “However, e-commerce maturity and growth opportunities vary vastly by region. Retailers and brands must therefore have a thorough understanding of the key drivers of retail and e-commerce growth in their priority markets and tailor their strategies appropriately to succeed.”

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There’s a bit of a tug-of-war game going on between manufacturer-recommended services and what the dealer tells customers. There could be conflicting information out there.

An automaker may say a maintenance procedure isn’t needed. But the supplier that makes the component in question says it indeed does? What happens here in this care? The automotive aftermarket can step in and break the deadlock.

There can be a disconnect between what the dealer tells customers and what suppliers tell the industry, explained Jeremy O’Neal of AdvisorFix and coach to technicians, service advisors and shop owners.

However, the customer is more often listening to the dealer. They don’t know what the manufacturer typically recommends. But there is one group that has access to both groups: The automotive aftermarket. And this industry plays a key role in ensuring consumers get the right information and save themselves from a potential catastrophic failure, he explained.

O’Neal used the example of a transmission manufacturer saying the fluid should be changed every 60,000 miles. But the dealer tells the customer it never needs changing.

The dealer is stripping out this cost to the customer, he told attendees of his session, The Essential Laws of The Profitable Shop Manager at the Worldpac Supplier and Training Expo in Nashville. Why? because it comes down to the costs for the consumer. If they see this $450 job that has to be done every few years, that factors into the customer’s decision to buy that vehicle.

So the onus falls on shops and their service advisors to get the right information from manufacturers. It can be as simple as visiting a tradeshow and speaking to representatives to get the full details. Then relay that story to the shop’s customers.

“You [could] explain that story: I was at a conference, I met the manufacturer of the transmission, here’s what they told me to do and here’s why,” O’Neal advised.

He then took out small bottles that showed clean transmission fluid and dirty fluid after 60,000 miles. The dirty vial was discoloured compared to the clean one and had bits of metal shavings floating around.

An example like this can quickly demonstrate why the fluid does indeed need to be changed, O’Neal explained. And it’s easy to do — get a sample from your technician the next time they work on a vehicle.

“So this is how you can start to influence customers on why they need to do maintenance,” O’Neal said.

Once the customer sees they need to do routine maintenance, he added, then you can create a customized maintenance and repair plan tailored for them.

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As the automotive aftermarket navigates an increasingly complex landscape, an industry leader explored evolving challenges, particularly the role of China in the industry.

The automotive aftermarket is experiencing unprecedented challenges as it grapples with global supply chain disruptions, regulatory pressures, and shifting market dynamics, Paul McCarthy, president and CEO of MEMA Aftermarket Suppliers told attendees of his group’s Vision Conference in Detroit.

As a result, he emphasized the need for the industry to adapt and innovate to maintain competitiveness in a rapidly evolving landscape.

“Our customers are consolidating; they’re going global,” McCarthy stated, setting the stage for a detailed exploration of the industry’s evolving landscape. He pointed to legislative and regulatory decisions as major influences on the business, touching on issues such as right to repair, trade regulations, electrification, and sustainability.

“It’s overwhelming sometimes,” he acknowledged. “And if that’s not enough, for many suppliers, the supply chain is still a problem.”

MEMA Aftermarket Suppliers’ Paul McCarthy speaks at the group’s 2024 Vision Conference

McCarthy recalled to a pre-pandemic edition of this conference where end customers stated that a 98 per cent fill rate was essential. But getting back to that standard today is challenging due to the intricacies of the supply chain. The industry is “aggressively de-risking” supply ties to China. The result is a more complexity-rich supply chain “with many more countries” in the mix. And that hasn’t slowed China down at all, McCarthy pointed out. In fact, they continue to grow as they set up operations in other countries.

“So while U.S. parts imports from places like Mexico and Vietnam and India have been growing, we’ve also seen exports of Chinese parts and inputs to those countries exploding,” he said, emphasizing the interconnected nature of global trade.

One of the most significant trends McCarthy identified is the global expansion of Chinese suppliers.

“This is a new frontier of competition,” he noted. “And when we look back in 10 years, this may be the biggest trend that impacts us.”

He also noted that Chinese companies are setting up businesses in countries like Vietnam and Mexico to circumvent tariffs and de-risking efforts, complicating the supply chain further.

McCarthy also mentioned MEMA’s efforts to ensure fair competition, including working with government officials to shut down companies circumventing tariffs.

“Our members are absolutely pro-competition. But there must be a level playing field,” he asserted.

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A disjointed delivery process could hinder retailers’ success in today’s competitive e-commerce environment, according to a new report by nShift.

The global parcel delivery management software company released the report, Building a Delivery-Management Foundation Fit for the Future, emphasizing the importance of a seamless end-to-end delivery process to enhance customer experience and streamline operations.

The report highlights that differentiation and growth in retail are increasingly dependent on efficient delivery processes. Scalable and smooth delivery operations are essential for business growth, while disjointed processes and “point solutions” that don’t integrate well can multiply the risks of failure.

“Deliveries have emerged as the next battleground in multichannel and online retail,” said Mattias Gredenhag, chief technology officer of nShift. “Consumers are demanding more from their online shopping experience. Economic pressures mean that warehouses must do more with less. Technology provides opportunities for efficiency, but the risks of disruption are significant. If something goes wrong at any stage in the journey, the retailer’s reputation will suffer.”

According to Gredenhag, centring the delivery experience on a scalable delivery management system minimizes the risk of disruption, creating a better experience for customers. Additionally, it allows businesses to track, collate, and analyze data across the delivery process, helping retailers better understand their customers, minimize carbon emissions, and improve performance.

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If you’re debating whether or not you should make the changes needed to have your shop ready to service hybrids and electric vehicles, an expert in the area broke down what to take into consideration.

First of all, consider how many electric vehicles are out there that you can tap into at your shop, said Carolyn Coquillette, owner of Earthling Automotive in San Francisco and founder of Shop-Ware, emphasizing the importance of market evaluation before committing to new repair capabilities.

“How many of these cars are actually out there? How old are they to be able to come into my shop to the point that I want to start to prepare to work on them?” she listed as key questions during Worldpac STX in Nahsville. “But if there’s no market, there’s no reason to market to it,”

Coquillette drew comparisons to the already familiar territory of hybrid vehicles, specifically the Toyota Prius the first mass-produced hybrid vehicle.

“It’s also interesting to start to compare the hybrid numbers because we already have, anecdotally, a sense of how many Pruises a lot of you are already working on. My guess is you’ve made some money on Pruises; I certainly have. And so then the idea is, ‘Well, maybe I can also make money on electric cars,’” she said during the session, Positioning Your Shop to Service Electric Vehicles.

While EVs are gaining traction, Coquillette pointed out that hybrid vehicles will likely see greater growth in the near term.

Carolyn Coquillette hosts a class at Worldpac STX 2024

“[The number of hybrids] is going to get greater. And it’s going to get greater, probably faster than [EVs] will long term in terms of gross volume,” she pointed out. “So there’s actually a lot to be done with hybrid cars because hybrid cars are basically becoming all cars.”

She noted that the transition to focusing on EVs should be timed appropriately, using herself as an example of her shop making the switch from primarily hybrids to primarily EV-focused.

“So the idea was, when is there enough movement inside of the EV market to say it’s finally time for really going to focus on the next thing?” she said.

Coquillette identified Tesla as the current leader in the EV market, making it a logical starting point for shops looking to specialize.

“The thing that was the next Prius is Tesla. We can finally see that Tesla is dominating in this space. And it gives us room to actually learn one specific platform, and then be able to drive a market around that,” she explained.

Jack Rosebro, who runs a training center for Earthling Automotive on EV and hybrid courses, pointed out that hybrids are a good gateway to EVs.

“Working on hybrids is kind of like the prep course for working on EVs,” he explained, though noting there are stark differences as well.

“And for the Tesla, they’re very, very, very different. But at least you start getting some experience with diagnosing more than battery packs and doing more than just maintenance — diagnosing an inverter, diagnosing a DC/DC converter.”

Whichever route you go, it can be a fruitful one, she pointed out. The hybrid market, as she mentioned, has been around for a whole and will be for some time longer. EVs have been growing rapidly in recent years.

“So there’s value in both of these markets,” she said.

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As the automotive aftermarket looks to leverage artificial intelligence in its operations, an advisory firm working with the industry outlined four steps businesses need to take for successful implementation.

During the MEMA Aftermarket Suppliers Vision Conference, Neury Freitas, Partner at Roland Berger, emphasized the complexity and strategic importance of AI in the auto care sector.

While cautioning against the belief that AI can be a quick solution, he outlined a structured approach to integrating AI during the session, Profitable Deployment of AI in the Automotive Aftermarket, based on insights from MEMA Aftermarket Suppliers 2024 Landmark Study.

“We don’t think that AI is something simple,” Freitas stated. “I’m not going to use ChatGPT or any other tool and then [expect] to get the benefits right away. We see AI as a journey.”

Freitas broke down this journey into four major steps, beginning with the critical setup: Getting the setup phase done successfully. This initial stage requires creating policies that define the parameters of AI usage within the company.

“If you do not have policies, please go and tackle that right now,” he urged. This includes assessing what guardrails need to be in place, what can be done, what can’t be done, who has access and who doesn’t.

“This is very important,” Freitas emphasized.

Following the setup phase, he recommended a three to six-week period, during which a task force assesses the company’s readiness and real needs.

“The real needs is something very, very important because some of the companies started implementing AI use cases without really knowing why they were doing that,” he noted, adding that someone had the money and decided to do something with AI without thinking it through.

“The idea here is to go and map the pain points of your customers, the pain points you have mapped, the use case that can help you solve those pain points,” Frietas said. “And in doing so, you will have a deeper understanding.”

Freitas stressed the importance of creating and prioritizing proof of concepts, urging attendees not to skip this step.

“Spend the time, spend the money to really go and implement the use case you’re thinking of in a controlled environment and see if you get the benefits you are looking for,” he advised.

He further urged companies to start with achievable goals, such as improving demand forecasting.

The final stage involves testing it out and making sure you’re getting the benefits you’re looking for.

Bottom line, Frietas observed: Get started now.

“If you are not a company implementing [AI, then] you will not be competitive,” he said. “So by using AI in the right way, we believe you will have a faster time to market, you’ll be able to have an improved market share, or you’ll be able to protect your market share. And then you will be more competitive.”

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With so many platforms to host video content, like Instagram, YouTube, TikTok and others, it can be confusing to drum up a strategy of where you should be.

The answer may not be of comfort: You should be on them all, but your videos don’t need to be the same for each one, a pair of experts recently advised.

You may notice features are similar across all platforms. But some outlets are better than others depending on what you want to do.

For Brian Walker, owner and CEO of Shop Marketing Pros, YouTube is the best place to be because it also allows you to embed those videos on your shop’s website.

Not to mention that YouTube is the second most-used search engine out there. “And they’re owned by the first-largest search engine in the world. You really want to put your videos on here as you want them to be found,” he pointed out during the session Rev Up Your Marketing with Video Advantage at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

Then consider your target audience. Facebook is the largest social media outlet for people aged 35-44, Walker said. And just about everyone across all age groups has a profile anyway.

“You can pretty much count on [the fact] that your clients are on Facebook,” he added.

On Instagram, even though there’s a pretty even split between male and female users overall, Chris Enright, owner of Enright Automotive, said virtually all of his 72,000 followers are male. Keep that in mind when you’re making content for that platform, he noted.

Instagram is also good for shorter, 90-seconds-or-less content, preferably even under 60 seconds. It also has Live, which allows you to do real-time Q&As, information sessions or whatever you like with your followers.

TikTok has fewer active users than Instagram but skews to a younger demographic overall. But Enright will tell you his audience is on the older side with that platform. It comes down to what you’re creating there.

“It depends on the type of content you’re putting out. So it does make a difference,” Enright said. “Not everybody that follows you is going to be young just because the mass majority of people on TikTok are younger than the other platforms. The content matters.”

For Enright, when he started putting effort into TikTok, his following grew quickly. It stands at almost 62,000 followers. He does consistent Live shows now and has drawn upwards of 20,000 viewers.

“That’s the type of reach that you can get,” he said.

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If there’s one thing shop owners used to be able to count on to keep them busy, it was the weather. When we see extremes on either end of the thermometer, it typically can signal a busy time.

Winter is coming: Are you ready for whatever weather it throws at you?

If you think that this conversation is premature, ask yourself if you were prepared for the extremely unusually warm winter we had last year. I know I wasn’t nearly as prepared as I will be this year.

There are many tools available for us to use that are designed to prevent the uncontrollable downturns or upturns that can happen in business. The most important tool is planning. You must know how much revenue and gross profit you need to be able to pay your bills, pay your staff, pay yourself and make a profit.

Once you know these numbers, you need to find a strategy to achieve them. How are you going to fill the bays — consistently — with profitable work instead of waiting for breakdowns?

That’s a stressful way to operate. For shop owners last year, expecting cold weather revenue on blown power steering hoses, dead batteries and coolant leaks never came was surely worrying.

Breakdowns are stressful for everyone:

• Our clients are not prepared to be without their vehicle or spend money that wasn’t in their budget
• Our service advisors must deal with the emotions of these client’s unexpected breakdowns
• Our technicians feel the pressure to get the repairs done quickly so they can move onto the next breakdown

Utilizing our marketing tools effectively and choosing consistent messaging will drive clients into our shops in a more manageable way. Early last year, we started discussing the benefits of preventative maintenance in our TV commercials, email blasts and during conversations with our clients.

“Once you know these numbers, you need to find a strategy to achieve them. How are you going to fill the bays — consistently — with profitable work instead of waiting for breakdowns?”

When new clients booked an appointment, we sent them a list of maintenance “Reminder Items” and asked them to check their records to see if they were due for any of these services.

On the day of the appointment, we performed a DVI and marked maintenance items as “Check Vehicle History” so the client was reminded to look into this.

Once their appointment was over, we would book the next appointment and include one or two of the reminder items that the client had determined they were due for, ensuring that we were discussing the importance of staying on top of these important services.

By the end of the year, we were booking all of these appointments for February, hoping to fill up a notoriously slow month with pre-booked work. Did all of these appointments show up? Nope. But we had more clients show up than if we hadn’t been following this process.

As well, instead of relying on weather-related breakdowns for revenue, we were billing more hours performing preventative maintenance services, due to the fact that our messaging was bringing in more maintenance-minded clients. February’s sales still sucked but it would have been unbearable if we hadn’t implemented the systems and processes required to create this flow of revenue.

One of our greatest tools are our teams. In the CARS February edition, I wrote about our “Kinetic Coffee Talk Tuesday” meetings, where my team sits down to discuss the previous week’s performance and the goals for the coming week. By sharing with them the business’s financial challenges, achievements and future goals, each team member is able to make educated suggestions about what improvements could be made that are not obvious to myself or my manager.

If our team’s goal is to have consistent revenue from week to week, with a healthy profit margin that will afford us the ability to pay great wages and stay up to date with tooling, we will work as a team to prevent weather from getting in our way.

For your shop to fight off unseasonably warm weather, economic uncertainty or a labour shortage, the best tools you can utilize are systems and processes that will prevent you from having to react to these situations, and instead be ready to face them head on.

Erin Vaughan is the owner of Kinetic Auto Service in Regina

This article originally appeared in the June issue of CARS

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There is a trio of new factors that are emerging for distributors on top of the ones the industry has traditionally relied upon, according to a new report.

Historically, distributors’ success in supplying repair outlets relied on ordering systems, product availability, pricing, and timely delivery. However, according to Lang Marketing, these factors alone are no longer enough in the changing DIFM market.

But the three new strategies are: Being essential, helping them acquire new business and having parts on hand.

Technical information

This has become a new essential for distributors.

With vehicles becoming increasingly complex, access to technical information is crucial for rapid diagnostics and repairs. Distributors can partner with carmakers and parts manufacturers to provide this information, giving them an edge over competitors by offering valuable resources to repair outlets.

Customer acquisition strategies

Distributors can enhance their value by helping repair outlets attract more customers.

“This enables distributors to provide benefits beyond the supply of products, which is the basis on which most distributors compete in the DIFM market,” Lang said in its report.

It noted banner programs and online-to-offline (o2o) transactions as two effective methods.

Banner programs offer marketing and advertising support, strengthening the relationship between distributors and installers while boosting the business of repair outlets and increasing their product purchases.

Online-to-offline — commonly referred to as o2o — transactions allow consumers to purchase parts and schedule repairs online, benefiting both distributors and repair outlets. This strategy is particularly effective for common repairs like tires and brakes, with e-commerce leading the way. Brick-and-mortar distributors can also leverage o2o to drive more business to their shop partners, Lang observed.

Parts availability

Distributors can reduce the pressure for rapid part delivery in two ways. First, by enabling repair outlets to stock frequently used parts, and second, through o2o transactions that ensure parts are delivered before the vehicle arrives for repair. These strategies require significant financial and technical resources but can offer substantial benefits.

“These factors provide added value beyond order systems, availability, pricing, and delivery, which are the primary focus of most distributors who supply installers,” Lang said.

The post New competitive factors for distributors appeared first on Auto Service World.

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Your shop will likely perform a lot better if you have proper heating in the winter and cooling in the summer, a shop coach wagers. Not only will your staff feel more comfortable doing their work, but it would also help with recruiting new members and retaining current ones.

In fact, Rick White, president of 180Biz, has seen how much more business a shop can do when the technicians are working in climate-controlled environments.

His father used to joke that the staff’s Christmas bonus was to turn on the heat for a day. All humour aside, White such working conditions are not tenable for staff. And your shop could be missing out on making money.

It’s the middle of summer right now and your staff are probably feeling it, especially your technicians straining themselves in the bays. During these days, techs could be working in unbearable conditions, sweating all over the place. During the presentation Business Boss Leader: From Creeper to Leader at the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo, White noted one shop owner who realized he could get an extra three hours per day on average out of each tech just by having air conditioning in his shop. The installation of the AC would be paid off in no time, White said.

If you want to know how much you could get out of your techs during hot and cold stretches, compare the work output on hotter and colder days to optimal conditions. Does work slow down when temperatures hit extremes in your shop? If you could have the same conditions all year round, then what kind of output could you get?

But what about the classic look of having a shop’s doors open while vehicles are you’re open and actively working on vehicles, one audience member asked. White has seen shops put murals on the doors to make it look like the inside of the shop as a creative solution.

One other attendee said they closed the bay doors years ago and business wasn’t affected. He installed an HVAC system, saw productivity go up and no loss of business. All you really need is a sign that clearly says you’re open, White said.

Another attendee noted that he’s someone who likes to shop at places that treat their customers better. So by treating his own staff better, he hopes that translates to more customers.

Another brought up the safety concerns. You don’t staff falling over because they’re overheated or get frostbite.

Not to mention, White then pointed out, that it’s easier to attract talent when you can tell them your shop is cooled in the summer and warmed during the winter.

“When you say ‘I’m looking for help,’ I would have ‘air-conditioned shop’ [highlighted],” he said.

The post Why you need AC in your shop now appeared first on Auto Service World.

In the automotive aftermarket, there’s an ongoing debate between shops and distributors about the adoption of the 80/20 rule.

This principle aims to enhance service and provide more value beyond just selling parts. It focuses on maximizing relationships with specific jobber partners to drive business value, extending beyond the core function of part sales and can better serve clients and create a more constructive value proposition.

Shop owners often express concerns about the perceived value of their relationship with jobber partners, feeling undervalued despite their loyalty. However, this perspective might overlook key factors.

While corporate initiatives influence some decisions, the primary reason lies in the necessity for a diversified customer base. Relying heavily on a few shops is risky business; jobbers need to spread their engagements across a wide range of clients to mitigate risk and ensure long-term stability. Let’s explore the thinking that goes on behind the scenes.

My experience as a distributor owner has shown that fostering loyalty and collaboration with suppliers can lead to more open discussions on continuous improvement efforts, ultimately benefiting both parties.

In the past, we operated under a certain-model approach, competing to serve a wide range of shops. This strategy required us to cater to a diverse client base, each with varying needs and expectations.

However, when we transitioned to working with NAPA, we noticed a significant shift in our business dynamics. The service-based model that NAPA promotes proved to be more aligned with the needs of our core clients, rather than entry-level shops.

However, this shift also presented challenges, particularly in terms of market pressures dictating pricing.

The NAPA program emphasized service and quality over pricing, which initially seemed like a disadvantage for shops operating on tighter margins. However, this focus on service enabled us to establish stronger, more meaningful relationships with our clients. We were able to engage in more substantive conversations about continuous improvement and long-term collaboration, rather than just negotiating prices.

Adopting the 80/20 rule — focusing on the 20 per cent of clients that bring in 80 per cent of the business — allowed us to become more efficient and profitable. This approach streamlined our operations, enabling us to allocate resources more effectively and prioritize our most valuable clients. However, this shift also presented challenges, particularly in terms of market pressures dictating pricing.

While focusing on our top clients made us more efficient, it sometimes came at the expense of our core shops. Market dynamics, especially competitive pricing pressures, made it difficult to maintain a balanced approach. The 80/20 strategy can lead to vulnerabilities, particularly if issues arise with a major account. Over-reliance on a few key clients can threaten diversification, which is essential for long-term stability in distribution.

In today’s environment, scale is crucial. Distributors must navigate the delicate balance between efficiency and diversification. Leaning too heavily on the 80/20 principle can streamline operations but can also make a business susceptible to significant risks if a large account is lost or if market conditions change unfavourably.

To mitigate these risks, distributors need to maintain a diversified client base. While prioritizing top clients is essential for profitability and operational efficiency, nurturing relationships with smaller, entry-level shops can provide a buffer against market volatility. This dual approach can ensure a steady flow of business while safeguarding against the potential pitfalls of over-reliance on a few major accounts.

Collaboration is key. By working closely with suppliers and clients alike, distributors can foster an environment of mutual growth and continuous improvement. Open communication channels allow for the identification of areas for improvement, the implementation of best practices, and the development of innovative solutions to common challenges.

In conclusion, I believe in the need at both the shop and the jobber level to harvest collaboration and continuous improvement efforts together creating a system of both loyalty and trust that maximizes the profitability of the relationship for both parties.

Our business was built and rebuilt on that premise. I believe there sometimes needs to be a reminder to both shops and the jobbers about how strategies from the 80/20 rule can create a stronger ecosystem together learning from each other on how to become more successful in their own crafts.

Ultimately, the goal is to strike a balance that leverages the strengths of both the 80/20 rule and a diversified client base in terms of business strategy. This, however, is often what comes in the way of really developing collaborative business strategy together above the transactional relationship.

Zakari Krieger is the Fix Network, Canadian vice president of Prime CarCare, responsible for the Canadian retail business, encompassing the Speedy Auto Service and Novus Auto Glass business lines

This article originally appeared in the June issue of CARS

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In the entrepreneurial landscape, the sight of a one-person operation thriving speaks volumes about determination and adaptability.

Great news: If you’re paying the bills and keeping the doors open, then you are doing OK.

But — and this is a big ‘but’ — as a one-person show, you are in an all-eggs-in-one-basket situation. That includes if you have the support of a partner or family member in the business — the rise and fall of the shop rests on your shoulders.

This is a constant source of stress many of my clients face. They’ll also tell me early on in our meetings that this is not what they signed up for.

Here’s the truth of the matter: It’s simple economics. You have complete volatility in your business. If you close for the week — whether you want to go off for training or you get sick — there is no revenue. And there’s nothing worse. We all know what it’s like to work through injuries because the work has to get done.

If the above sounds familiar, consider that it’s time to think about moving to the next phase of your business: Expansion.

It’s not an easy road to travel. But by undertaking a few practical strategies for scaling up your solo business and unlocking new levels for you and your family, there is a path towards success.

Evaluation

The first step is to evaluate your time during a typical month. What adds money to your bottom line but you’re not very good at doing and spending more time than necessary?

There will be lots of “experts” telling you to analyze your business from all sorts of metrics and make business plans out of your ears.

From experience, by the time you get home after serving your customers all day, the last thing that you want to do is build a plan or stare at numbers that nobody ever taught you how to understand.

My advice is to not worry about any of that. Just look at the hours sold per day and the gross profit that you are making. That’s the start. As a single operator, if you’re not making 8 hours per day minimum, then you are spinning your wheels on other stuff. It’s time to change what you are doing.

“You don’t have to do it all yourself. Your existing customer base constitutes a priceless asset that can propel sustained growth.”

Path

The first step created a gap analysis. In its simplest form, it shows where the path to expansion might be. Look at the potential for replacing you for the tasks that waste time so that you can focus on what you do for the business. What are those roles? What are the tasks associated with it? This will tell you the type of person you need in your shop.

So that means you need to find someone with experience in that role. Emphasis on ‘experience in that role.’ Simply put, you don’t have the time to train a new person in what they need to do.

But remember, you are going to need to train them on your way of doing business. This means daily communication to go over the operating processes you already know in your head. People are not mind readers.

Upgrades

As your solo venture expands, so must your facility and resources. Invest in upgrading equipment and tools to support heightened demand and production capacity. But equipment purchases must make business sense. Don’t go all-in for a piece of equipment that you are going to use once.

You might need to enlarge your physical space by leasing a larger garage or new commercial property to accommodate your growing operations. It also might be as simple as taking a good look at your facility and giving it a coat of paint to elevate the look and feel for your upcoming larger customer base. As a first step, this makes a world of difference.

In order to pay for this, you need to upgrade and broaden your customer base. Extend your market to propel growth.

Invest in targeted marketing and advertising endeavours to reach your demographics and generate leads. This can be done on social media channels such as Instagram or Facebook. It might be pairing up with local businesses to offer your services to them and their customers.

You don’t have to do it all yourself. Your existing customer base constitutes a priceless asset that can propel sustained growth. Foster customer loyalty by delivering exceptional products, services and experiences. Nurturing robust relationships with your customers cultivates brand loyalty and advocacy, aiding long-term growth and profitability.

Have your customers be your promoters by posting about their experience on Facebook and tag you, for example. Google Reviews are also important. Do not underestimate the power of this step.

This is a very look at a complex subject. But if you’re struggling with your current business, then looking to expand could give you more of that satisfaction you desired when first starting out.

Greg Aguilera is a director of IAC Canada, an organization dedicated to the management development of  repair shops in Canada. He can be reached at greg@intautoconsulting.com.

This article originally appeared in the June issue of CARS

The post From the Magazine: Scaling up appeared first on Auto Service World.

The livelihood of independent automotive repair shops is facing threats from multiple fronts. As vehicles continue on a path of technological advancement, threats like right to repair and dealer growth in traditional aftermarket circles put added pressure on the independent aftermarket to ensure it’s at the top of its game.

But from the point of view of jobbers, many of their automotive service provider partners — those of you who are reading this very magazine — are not putting in the effort to stay ahead and fend off the many risks at play.

The aftermarket can sell itself as being superior to the dealer experience in many ways but the J.D. Power 2024 U.S. Customer Service Index Study found that consumers aren’t concerned enough to be moved. Even as parts supply became delayed, technician shortages took a toll and wait times increased, customer satisfaction with dealership service experiences showed improvement this year.

“Dealers’ DIFM share bottomed in 2014, and they are now rebuilding their repair market strength,” said the report, DIFM Battle: Independents vs. Dealers from Lang Marketing.

Dealers have put a focus on the do-it-for-me segment of the automotive aftermarket. In a separate report, Lang Marketing further noted that service station and garage market share has been on the decline.

“Their evolving service bay strategy included the addition of quick service lanes by many dealers and a growing dealer focus on used vehicles, which have boosted their DIFM volume,” Lang noted in its report, SS & Garage Spinout Alters the DIFM Market.

As many industry observers and coaches have observed, the aftermarket is in need of greater training to keep up with the rapidly evolving advancements in current vehicles. Failure to do so will push vehicle owners into the dealership’s waiting bays.

That sentiment was echoed by jobbers who called out the lack of business management skills and interest in training among their ASP partners in the CARS Annual Jobber Survey.

“Most shop owners are excellent mechanics, but many have never had any formal training in business management,” noted one survey participant.

The survey was sent out to jobbers made up of readers from Jobber News, the sister publication of CARS. The first question asked about was the most common mistake their ASP partners make. Easily at the top with one-third of respondents agreeing, it was a lack of proper business management procedures.

Most respondents shared a similar feeling: This skills gap manifests in various ways, from misunderstanding margins to inefficient inventory management, which directly impacts both profitability and customer satisfaction.

This translated over to a lack of training among ASPs. While fewer than a quarter could count on the best of the best to show up to training seminars, three in five (62 per cent) reported that they’re rebuffed by their ASP partners who say they’re too busy to attend such events.

“The constantly evolving knowledge needed to complete the total repair isn’t being learned by all techs, which puts the shops at a disadvantage,” one respondent observed.

“Shops and employees are often not motivated to update and improve their skills. There’s a lot of apathy,” another noted.

A pair of respondents pointed out that many technicians are older, nearing retirement. Their interest in learning new skills is low.

“The average age for my techs is certainly getting older; not interested in learning new,” one of them said.

Others, however, sympathized with shop owners and technicians. One noted that if you’re in a rural area, it’s difficult to get training locally.

“For us, we are too remote for most in-person training and online just doesn’t seem to have the same draw,” one observed.

This was a concern for Mike Howard, manager of garage operations at 2023 Shop of the Year Art Turney’s Garage. Being in Peterborough, Ontario, about two hours outside of Toronto, he noted that it’s hard to get training while being so far out of a major centre.

Timing is another issue — and one where jobbers feel for shop owners.

“Staffing shortages are causing the current workforce to put in more time and after-hours training is not as important as being able to relax and unwind to many,” one respondent highlighted.

And while one respondent above noted that online training isn’t much of a draw, another pushed for more webcast training that can be done during convenient times throughout the workday.

So while jobbers are concerned about the lack of shop training taking place, they understand the barriers. That said, jobbers also want to see more initiative.

And that extends beyond technical training — shop owners need to get solid business training and understand more than just the basics.

“It is not easy to understand the difference between markup and gross profit,” one noted. “Many people get it wrong and think they are the same.”

Respondents called for shop owners to seek out opportunities. “They should take a course at college or online,” one suggested.

Parts quality

Shops have been regularly complaining about parts quality. The most recent complaints were outlined in the Jobber News Annual Shop Survey. So the question was put to jobbers: How are they ensuring parts meet the quality standards shops want?

Most answers matched a common theme: Jobbers only want to sell shops quality parts. They will push shops to buy better parts. But at the end of the day, what they sell depends on what shops want to buy.

“We always suggest and have a premium offering for all applications,” one respondent said before pointing out “We also have your price-conscience parts available.”

And it seems there’s a lot of price-consciousness taking place, according to jobbers.

“Shops do their best [and] use cheaper parts to keep customers [happy],” observed one respondent.

“It’s a fine line. Some shops like cheap, some like good parts,” said another.

For the majority, jobbers aim to keep good quality parts in stock, though it’s not easy.

“If we have a ‘white box’ line, it is top quality,” one jobber said. “If we don’t feel it is a premium, we don’t put it in. Additionally, we focus on stocking top quality premium brand name parts so we have less warranty. Getting well-priced premium parts is a challenge sometimes and a balancing act. Price does matter.”

Another did acknowledge the challenge of poor parts quality circulating these days.

“We have no way of sourcing ‘better’ parts. Aftermarket is certainly suspect quality. I have been in the jobber industry for 43 years and used to feel many lines we sold were an improvement to OE but I certainly can’t say that about the offshore product we sell today. With online pricing becoming the benchmark, the race to the bottom will likely ensure quality will keep sliding as well.”

Another pointed out that they’re always pushing their suppliers to not just make sure premium parts are meeting quality standards but also everything they provide.

“We’re offering parts that we know are of good quality first, then second line that we have a good record with,” explained another jobber. “Finally, only if price or availability dictates, we will offer a brand we don’t have a history with. Sometimes if we have a bad history with a brand and there is not an available alternative, we will opt not to sell the part at all. In doing so, we save the ASP, vehicle owner and ourselves a lot of trouble.”

Regular meetings

Shops should feel that they have the opportunity to raise concerns with their jobber partners, especially when many are making an effort to meet regularly.

However, jobbers pointed out that it’s often difficult to meet with their ASPs because of limited availability on the shop’s side.

“The time and interest on their part is often lacking,” one respondent pointed out. “We should be discussing their shop needs (equipment and training), as well as ways in which we can both work to improve our relationship and help each other.”

Another would like the opportunity to talk about service, features and program benefits. But “Availability is probably the main stumbling block currently,” they said. “Everybody is busy.”

Some jobbers will try to have their outside sales team talk to shop owners. But that can prove difficult. Indeed, shop owners are busy during the day and too tired after, one jobber noted. “The motivation is not there to schedule a meeting that works. Only when there is a problem does the motivation to meet arise.”

Most jobbers (33 per cent) said they get out to their shop customers quarterly, while quarterly and monthly meetings were each the preference of about a quarter. Fewer than one-in-five said they do so annually.

They would like to talk to their shop partners more about their business goals and strategies to make sure they’re offering a valuable service that matches their needs. “And I’d like to know before any misalignments become a problem or an opening for my competition,” one noted.

Jobbers are also open to talking about training, products offered, margins, prices, competition and more.

But, as one respondent highlighted, they find the shop owner without the technician background to be more receptive to not just meetings but being receptive to new ideas.

“The non-tech owner is more receptive to info and new ways to grow and get better,” they said.

Selling to the DIYer

A common and ongoing gripe from shop owners has been the fact that a consumer can walk into a retailer and buy a part for the same price as the shop. But the shop will buy it, charge a mark up and get negative feedback from the customer.

We asked jobbers to address this area of concern. One emphasized that there’s no simple answer.

“Starts with manufacturers and the very different deals that they make with different groups and different price sheets in different regions and countries. Speaks to different business models [that] are marketing the products,” they said.

And while the manufacturer will say they don’t dictate at what price the product is sold, “I have been told that my online site will never work because I do not sell wholesale online and offer free shipping,” the jobber said. “I also make sure that my wholesale customers can make a decent margin if they sold it for the same as my counter price.”

That means figuring out if a jobber wants to be an online seller, a brick-and-mortar wholesaler or a retailer. This respondent called on manufacturers to protect jobbers that service local shops “by not selling to outfits that destroy traditional marketing chains.”

This respondent said they have dropped manufacturers where online prices are cheaper than what they have on their shelves.

“Manufacturers have to decide who they sell to based on how their products are represented. The playing field is not really fair if a jobber has to compete with a large WD or online reseller who is marketing directly into any market. It will eventually kill local brick and mortar stores.”

Nevertheless, there are jobbers out there committed to making sure their shop customers get the best price.

“We strive to protect our relationship with our shops as they are the most valuable customers we have in terms of purchasing and future growth,” said one respondent who noted that it’s rare for a customer to get the same price as a shop customer.

Another said they have a retail price and one for the pros. “The shop is still my first concern,” they said.

One respondent pointed out they wouldn’t do this and if they did, they’d certainly hear about it.

“Doing this is a big no-no. We have proper pricing structures in place so this does not happen, or at least never happens,” they said, “Yes we have been caught before but usually there is a reasonable explanation for the sale. Our top 300 customers should never run into this happening.”

Blocking customers from bringing in their own parts — presumably one they purchased from the local store — would curb retail sales on its own, one respondent noted.

However, “there is a market for DIY,” another jobber pointed out. “Not a fan of customer buying parts [and] taking [them ] to ASP’s place to get installed but garage management consultants are now recommending a 60 per cent margin instead of getting labour rates up. Cannot buy labour at a parts supplier or online.”

That all said, one respondent simply commented, “Why not if they want to buy them?”

Challenges

Jobbers have seen positive gains in their issues from a year ago. Unfortunately, a new one in particular has jumped to the forefront.

In 2023, 53 per cent of jobbers reported that parts availability and the supply chain were their biggest issues. This year, that has dropped to 38 per cent. Staffing concerns also fell — what was a top challenge for 35 per cent last year, that has dropped to a top concern for 19 per cent of jobbers.

On the flip side, parts price challenges have grown, matching parts availability at 38 per cent, growing six-fold in concern over the last year.

That was something jobbers saw coming. When asked last year to predict their top challenge going forward, parts prices (35 per cent) was the top pick. And that’s a concern that is only going to grow this year — nearly half (48 per cent) predict prices will be the top concern.

“Trying to compete with the online discounters is going to get more challenging as time goes on,” observed a respondent.

“Prices need to stabilize and be more consistent to regain customer confidence,” said another.

Meanwhile, they expect parts supply to continue to ease with 24 per cent expecting it to be a top issue going forward.

Indeed, 81 per cent reported that their inventory levels have sufficiently recovered and they’re able to meet customer needs.

“For the most part [customers have] understood, but there have been numerous discussions to make sure we both understand each other’s perspective on the matter,” one respondent said.

They want you to know…

There’s much to the jobber business that store owners feel that are missed by their ASP partners.

When evaluating your jobber, look at the whole package, one urged. “Don’t look just at price, look at service as well — time of deliveries, credits done efficiently, etc.”

Many noted that they have little control over prices, so don’t take it out on them or, especially, counter staff.

“We get very little say in the prices that are set. We are constantly working to see improvements for them,” one said.

“We all need to make a profit all costs are going up. ASPs do not like their customers shopping around but they do it constantly,” said another.

“We are not trying to gouge them on pricing — we need profit also,” one responded. “We are going as fast as we can on our deliveries while still trying to be efficient.”

And each shop is unique. Your jobber is trying to meet the demands of various clients. “We spend a lot of valuable time trying to keep on top of each and everyone’s specific needs, maintain a good relationship with all. Service and relationship goes along way,” one pointed out.

One thing that can’t be lost: Everyone is a partner and needs to act as such.

“We want and need you to succeed and we need you to want us to succeed,” a jobber said. “It is definitely a two-way street. And if it isn’t then the business will not last.”

And when you need help, ask for it, one jobber urged. “The thing that customers are often good at, but could be better, is letting us know when they face challenges. We’re here to help. But we can’t if we don’t know there’s a problem. Speak up. We’re listening.”

This article originally appeared in the June issue of CARS

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It would be wrong to think about artificial intelligence as something that would help the automotive aftermarket strictly with customer engagement.

Instead, Ben Ellencweig, senior partner at McKinsey, told a room full of industry pros that it assists with what he calls ‘human engagement.’

“Human engagement is your technician, your customer, your employee and your supplier,” he said at the MEMA Aftermarket Suppliers Conference. “Anything where there’s some kind of interaction, [AI] actually is something that can be helpful.”

The question of whether AI can work isn’t related to your industry — it’s a matter of competence. For Ellencweig, someone who says they understand AI but doesn’t see an application to their industry has the wrong mindset.

“You can actually rethink, holistically, how you do things in your company,” he said during his presentation, AI & Vehicles: A Good Match? “How do you design a new product? How do you give service?”

He gave an example of research that found people preferred to speak to a robot when they had a problem. People didn’t care for a human’s niceties or the corporate script; they just wanted the problem solved. Take an airline cancellation — people would rather just give their reference number to a bot and have the system figure out an alternate flight and process a new ticket.

Now think about how it can be applied to your jobber store or service shop. Think about when you’re sending emails or texts to clients or staff. You want to personalize the message because it generates a better response from the receiver. But personalization is time-consuming. AI can help. You can put bullet points into a generative AI system and it can create a personalized message.

“I do think the application here … [is] just massive,” Ellencweig said.

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There are a handful of things suppliers can do to make the day-to-day operations of a shop easier, according to an industry observer.

As shops face many challenges, such as training, talent and technology, Barry Neal, senior partner with consulting firm Roland Berger listed five ways that both equipment and parts suppliers can do on their end to respond to the labour shortage.

For equipment suppliers, the key is to optimize inventory management systems and centralize knowledge, he told attendees of the Aftermarket Technology Conference, hosted by MEMA Aftermarket Suppliers.

The first is to create universal diagnostic equipment that works with the majority of vehicles that are out there today.

“But more importantly, the shift of scanning tools for really providing information,” he noted as a second point. “The diagnostic trouble codes [need] to a more prescriptive solution, providing information around parts, as well as parts ordering, as well as linkage directly to prepared instructions and videos linked backwards to supplier support and training.”

This leads to the third key point which is to reduce the need for an individual to carry so much knowledge by building a centralized infrastructure of know-how. By allowing scan tools that can work universally, they can lead technicians to a central location where a vault of information awaits to guide them through the issue in front of them.

Neal also urged suppliers to look at internal processes and inventory management to find ways to optimize stock levels and produce ways to minimize the need for excess labour by moving towards increased automation of materials handling.

Finally, he called for outsourcing of non-core functions, like logistics and IT support.

As for parts suppliers, Neal pushed for improving catalogue information. Make it easier to order parts.

“Integrate that into the shop management systems for ease of automation, as well as looking at backwards into the e-commerce platforms and setup to really make that simple frictionless solution for diagnostic all the way through to the parts and repair,” he said.

He also called on suppliers to encourage replacing parts instead of the more labour-intensive option of fixing them.

Finally, Neal wants to see shops reduce their manual ordering, He called for more investment in e-commerce platforms and digital ordering systems to streamline the process for purchasing parts by a shop.

The post Shops need suppliers to do these to make life easier appeared first on Auto Service World.

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An auto repair and service shop needs to be seen as convenient in customers’ minds because it sets the stage for future business, a shop owner and coach explained.

Turning away a customer is something all aftermarket shops should be avoiding, noted Jay Huh, a business coach at Shop Fix Academy and owner of CarMedix. Some shops don’t like to do just an oil change on a vehicle and would rather package it with other services or repairs. So a customer calling about just an oil change may be told to try the place next door. However, with the right auto repair shop software, businesses can efficiently manage even small jobs, streamlining operations and improving customer retention by accommodating a wider range of services.

But being convenient doesn’t mean taking in anyone and everyone. If you specialize in Hondas you don’t need to take in the BMW that rolls into your parking lot. What it means, he told attendees of the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo, is that you can say yes and offer convenience to the customer who may need a last-minute oil change in between their kids’ soccer game and their mother’s medical appointment.

Bottom line, you want to make it convenient for a customer to visit your shop.

“It’s all about convenience. You never underestimate the power of convenience,” he said during the session How to Run your Shop Stress Free.

He painted the picture of a driver having something go wrong with their car on a Tuesday. They call their shop but they say to come by on Friday. If you’re the customer, are you actually going to wait those extra days before going to the shop, Huh asked. No, and what happens next is the customer will pull out their phone and search “auto repair shops near me.” They will call around until someone says they can come over now.

It doesn’t even have to be something major to show convenience to the customer, Huh pointed out, going back to the example of oil changes. Look at how many quick lube shops there are. That’s because they make it convenient to drop in and get an oil change performed, he said.

These places have led customers to believe an oil change is a 15-minute job. So when a customer calls a service shop and they’re denied an oil change that day, they’re put off. And it sets the stage for months down the road when the customer’s check engine light comes on or they’re in need of a major repair.

“Do you think they’re going to call your shop?” Huh asked. “In their mind, you can’t even squeeze them in for a 15-minute oil change. You think they’re going to trust you to get their car in for major repair?”

Look back to the last year when your shop was busy and you had to turn away customers. “Do you think you being slow right now might be the result of that?” he posited to attendees.

Here’s what he suggested: When a customer calls in need of an oil change or help with a failure, ask if they’d like to come “now or …” and suggest an alternate time, like later that afternoon or tomorrow morning.

“The answer is always now — ‘Can you come in now?’” Huh said. “It’s the ability to say yes.”

It’s these decisions that help shops have a strong customer base so owners aren’t stressed during slow times.

“You guys are stressed out because you guys don’t have enough cars,” Huh pointed out. “So these are the basic principles you need to have in place. Saying ‘yes’ this is one of them.”

The post The importance of being convenient appeared first on Auto Service World.

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The auto industry is at a three-way crossroads. On one hand, the climate crisis has shown no signs of abating. Conversely, global legislatures are exploring or have enacted environmental policies establishing decarbonization and net zero emission goals for various industries, including insurance. Lastly, the consumer appetite for sustainability and environmental responsibility from businesses, particularly auto insurers’ repair process, is genuine.

In fact, a 2023 PwC survey noted that 77 percent of consumers are willing to pay more for recycled, sustainable or eco-friendly products. A recent World Economic Forum report stated that 65 percent of consumers align their spending with brands committed to a healthier, more sustainable planet.

This situation allows the auto industry to embrace environmental goals, such as achieving net zero emissions. These efforts can yield positive results, such as attracting and retaining eco-friendly consumers, reducing operating costs, and enhancing business reputation. While the path to a net zero emission repair process may have been difficult in the past, current technologies, guidelines, and frameworks have made it a much more achievable goal.

Although progress has been made, the industry still needs to work on balancing net zero targets with profitability, mainly due to the lack of comprehensive data on indirect emissions activities from vendors and suppliers in the claims and repairs process, known as Scope 3. In fact, the World Economic Forum’s Net Zero tracker indicates 40 percent of emissions come from activities in the broader automotive industries. This highlights the need for better data analytics capabilities and collaboration across value chains to meet net-zero goals.

Using estimatics for understanding data’s role in achieving net zero repairs

Despite this, 70 percent of automotive organizations plan to reduce emissions across the entire value chain. While this is encouraging, it may not be enough for today’s eco-friendly consumers who view the climate crisis as an urgent issue that the world’s largest industries cannot wait to address. They want to see real progress through meaningful actions, and the best way to make this progress through action lies within your data.

To achieve net zero emissions, technical and non-technical teams need to understand their data, and groundbreaking solutions can make sense of hard-to-measure Scope 3 CO2e emissions data in the repair workflow. Such solutions include estimatics tools – which help insurers and repair shops assess and calculate repair costs, as we as track emissions activity. Estimatics also encourages more efficient collaboration across a repair shop’s vendors, helping to identify where more sustainable approaches should be made during a repair.

In short, the role of data and estimatics in the claims and repair workflow is central to addressing these challenges and realizing net zero emissions targets.

Strong data analytics capabilities can help your teams achieve their sustainability goals by helping them understand how emissions within a supply chain impact net-zero strategies. This can include assessing sustainable practices among repair shops and their suppliers, OEMs and transportation partners.

Additionally, knowing which parts can be repaired or reused, such as radiators, A/C condensers, wheels and like-new alternators, can reduce emissions and the costs of sourcing new parts. It also prevents the old part from being sent to landfills — which requires additional emissions from transportation. This newfound efficiency helps teams repair vehicles more effectively, resulting in fewer backlogs and quickly returning fixed vehicles to customers.

Finally, regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) or California’s SB 253 and 261 — which require reporting Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from purchased sources) and Scope 3 emissions data – continue to serve global policy models. Understanding the role data plays in your path to net zero is becoming a requirement.

How pursuing net zero emissions can help repair shops save time and money

This shift in consumers’ sustainability priorities and global net zero and sustainability regulations necessitate new strategies from auto insurers and their repair shops. For example, they can reassess and improve the sustainability data within their value chains. Yet, some still believe prioritizing sustainability or net zero initiatives means sacrificing profitability to some degree.

For example, refurbishing a serviceable engine would not only reduce emissions by up to 85 percent, but it would also save the repair shop time and money waiting for a new engine to be delivered, installed and tested to ensure it works as intended. Although this is a single example, it demonstrates how net-zero initiatives can satisfy profitability demands while meeting the sustainability requirements of the eco-friendly consumer.

In short, aligning net-zero emission practices with profitability becomes an opportunity for cost-effective but environmentally responsible practices. By reframing net-zero, and sustainability more broadly, as an integral part of the business rather than a checklist of to-do’s, insurers can navigate the dual priorities successfully. This approach mitigates the perceived clash and presents a desirable solution where sustainable practices drive financial gain and environmental impact.

The future of the auto industry is becoming increasingly intertwined with sustainability initiatives. And, as consumers and governments demand more environmental responsibility, insurers and their repair shops have a golden opportunity to cash in on their pursuit of net zero emissions.

Bill Brower is senior vice president of industry relations and North America claims at Solera. Paul Prochilo is chief executive officer of Simplicity Car Care.

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Contrary to popular belief, Gen Z workers are highly engaged and willing to work hard, but they are also the most likely to leave their jobs, according to new research by Qualtrics.

The study found that 74% of Gen Z workers (aged up to 27) are engaged at work, and 72% are motivated to contribute beyond what is required. Additionally, 74% would recommend their company as a great place to work.

However, despite their high engagement, only 40% of Gen Z workers plan to stay with their current employer for three or more years, at least 20 points lower than any other generation. This stark contrast highlights the challenge employers face in retaining young talent.

In comparison, Baby Boomers show much lower engagement levels. Despite the trend of “quiet quitting,” Gen Z employees are significantly more motivated to exceed expectations than their older counterparts.

“The employee experience is important for everyone at all stages of life and career, and equal care should be given to those later in their career as those just getting started,” said Benjamin Granger, Qualtrics’ chief workplace psychologist. “The relatively low engagement scores among the Baby Boomer generation suggest that organizations may not be meeting the shifting needs of these workers, who may place higher value on career stability.”

As Gen Z is expected to outnumber Baby Boomers in the workplace this year, companies must navigate the diverse needs and expectations of their workforce, the group said. Understanding these generational differences is crucial for attracting and retaining talent.

The study also found that across all generations, employees are more likely to stay if they can meet their career goals and have adequate benefits. However, Gen Z has unique drivers, such as the desire to challenge traditional practices and a focus on reporting unethical business practices. These factors are less significant for older generations.

While Gen Z workers value work-life balance and manager support for their well-being, they are least likely to report having the flexibility to meet both work and personal needs and often experience lower levels of well-being.

“Gen Z workers are relatively new to the workforce, and it’s well known that stage of life greatly impacts workers’ needs and expectations,” Granger added. “Leaders who actively listen to these workers’ expectations and needs can win over great employees who are willing to go above and beyond.”

The post Gen Z workers show higher engagement than Boomers appeared first on Auto Service World.

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A single digital program has been established in Ontario for emissions and safety inspections for heavy-duty diesel commercial, light-duty and passenger vehicles.

That program, DriveOn, is billed as being able to reduce fraud, ensure the safety of vehicles on roads, reduce emissions and save money for commercial vehicle owners. It started in July 2022 with facilities that previously tested emissions only. Motor vehicle inspection stations that currently perform safety inspections and issue yellow safety stickers (commercial inspections were able to apply starting May 9, 2024).

The current motor vehicle inspection program ends on Dec. 31. But to purchase and receive equipment before then, the DriveOn enrolment process was to be completed by June 1. An information session is available through the provincial government’s website.

The program, advocates say, will ensure the safety of vehicles on Ontario roads. Some hope that it will push out nefarious players and ensure legitimate safeties are given to qualifying vehicles.

“The idea that you can have a tractor-trailer that pulls 150,000 lbs. down [Highway] 401 that got inspected [in exchange] for two cases of beer is wrong,” said John Cochrane, interim executive director with the Automotive Aftermarket Retailers of Ontario, which has been helping Ontario shop owners move to the new program with guidance and regular updates.

There are further hopes that it may eventually lead to mandatory safety inspections of Ontario vehicles, whether every year or bi-annually, not just when vehicles are sold.

Cochrane explained that DriveOn will operate in the same manner as the now-defunct Drive Clean and operated by the same group, Parsons. Drive Clean started in 1999 and was scrapped in 2019.

“The idea is to modernize and computerize the inspection of vehicles,” Cochrane said in an interview, adding that nothing is changing as to how shops will certify a vehicle is safe. “What the province and Parsons want to make sure what happens is that vehicles that are inspected are properly inspected.”

That means the checks will be done the same way as before, just with a digital twist added by way of photos to verify the findings.

“You’re still going to be doing the physical inspection for play on the ball joints and play on the tie rods,” Cochrane explained. “There is going to be basically no change of a vehicle inspection. But what there is, is the recording of the vehicle inspection.”

There will be areas where technicians can note body defects, he added.

However, Auto Service World has received negative feedback from Ontario shop owners. They point to the Drive Clean program and wonder if their investment in DriveOn will end up like the one many shops made in Drive Clean, which was all lost following the end of the program.

For instance, the cost of digital equipment to perform inspections can be thousands of dollars. Many shops will need to upgrade their wi-fi capabilities to have coverage in testing areas, a requirement of the program.

For some shops, safeties don’t make up enough of their business so they told Auto Service World that they don’t plan to move over to this new program.

Cochrane called it a business decision shops need to make. But he believes it will be positive for a shop’s bottom line.

“I think that you’re going to have a lot more vehicle safety inspection business because a lot of the vehicles that have not been inspected properly are going to get inspected properly, and it will generate thousands of dollars of repairs,” he said, noting that for every 10 safety inspections his shop performed, about eight of them required mechanical repairs.

“So do you want to not get the mechanical repairs that are generated from an inspection?” he asked.

One shop owner questioned how many shops would invest in the program given that they already have a hard enough time finding technicians — are they prepared to pull a tech off the floor to perform these tests?

Nevertheless, Cochrane wants all Ontario shops to be part of the system that keeps vehicles safe on the province’s roads.

“I would like everybody to embrace this program,” Cochrane said. “It is going to have a learning curve. There’s no question about that. But once you’ve got through the learning curve, it’s going to make driving on Ontario highways safer.”

Speak up

Auto Service World has had shop owners reach out and ask if we’ve heard from others about the program — so we’re turning the floor over to you. Whether you have started the program, are in the process of getting equipment or staying out, let us know your thoughts in the comment section. Your fellow shop owners are looking for your insights.

Tell us:

• What has your experience with the new inspection program been like?
• Do you like the program?
• How has DriveOn impacted your business?
• What problems are you having?
• What success have you seen?
• If you’re not adopting the program, why?
• Do you think this program is a good idea?
• Do you think this program will work?
• What changes are needed to DriveOn?
• What issues, insights, challenges or opportunities you have found?

Use the comment box below or email adam@turnkey.media to leave your thoughts

The post Ontario Shops: What’s your DriveOn experience? appeared first on Auto Service World.

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Shop owners may be surprised to know that their customer list or business reputation isn’t worth very much on the open market, according to a business advisor who works with the auto repair industry.

Hunt Demarest is an accountant and business valuator with accounting firm Paar Melis, which deals exclusively with the automotive aftermarket. He’s helped many shops expand by buying other shops and helped his clients sell their own shops.

When looking at the valuation of the business, he’s often asked about putting a value on the shop’s good name or the list of clients they have. They figure it’s worth a good amount of money. Unfortunately, he said, it’s not.

Demarest discussed this issue during the session Transitioning Your Business at this year’s Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City. He painted a picture for the audience: Say a shop owner down the street who’s been around for 50 years and specializes in German cars decides he’s going to close up. He approaches you and offers his client list for $100,000. Are you going to take it?

“Probably not, right? You don’t even need to hear anymore,” Demarest said. “Generally, we never see people paying for intangibles like this outside of assets — because there’s just not any value there. It’s very hard to quantify that value.”

From the point of view of the shop being approached, the retiring owner can’t force all of his customers to go to the other shop. There’s no guarantee any of them will even make the switch. The shop may not even work on German vehicles. And even with the list, there’s a lot of time and effort required for no measurable return.

The shop being approached is better off spending less money and market directly to those customers. Furthermore, once the retiring shop owner closes the door, those customers will be looking for a new place — they may find this other shop anyway with zero effort required.

“And so generally, the reputation is one of those things where it’s gravy,” Demarest said. He further explained that it’s one of those things where, if the buyer is on the fence, then having a good reputation may be something that seals the deal.

Or think of it this way: If a shop has a bad reputation, they probably have bad business and poor numbers.

“And if you have a business with a great reputation and you’re doing all the right things and everyone’s screaming your praises on it, you probably have decent profits” which makes it more attractive to a prospective buyer, Demarest said.

The post What’s your brand reputation worth? Not as much as you think appeared first on Auto Service World.

Shop coach Rick White wants you to remember this acronym: ABR, which means always be recruiting.

The president of 180Biz wants shop owners to never stop trying to find talent for their shop. Just because you think you have enough techs or service advisors doesn’t mean you can stop finding new employees.

“You need to be running ads all the time. You need to be talking to people all the time,” he said at the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo in Kanas City.

Why? Maybe you’re not ready to hire a tech today. But say one leaves in a month unexpectedly. Who can you bring in to replace them?

Let’s say some months ago you met a good tech that you want to add to your roster. He’s on board with joining your shop. You’re both excited about the opportunity. You don’t have an open slot. No problem.

“Would it be okay if we get together once a month or once every other month have some lunch, kind of catch up, see how things are going?” is all you need to ask them to keep the lines of communication open, White said.

And you can take it one step further. Say you’re taking your team out for some training. Ask the prospective tech if they’d like to join as a guest. That sends the message that you want him to work for you and want him to be up to date on training for when the opportunity comes.

“You’ve got to nurture that bench all the time,” White said. “When you do that you are no longer afraid to hold a standard in your shop.”

That means being able to drop techs who don’t hold to your standard because you have someone who can step in.

And if your staff asks why you’re looking for help, it’s all about being proactive instead of reactive. You don’t have to tell them you’re looking to replace anyone. But in case someone leaves, there’s a replacement candidate waiting in the wings.

“I’m going to sit down my team and let them know, ‘Listen, as a business, we need to have a pipeline. Just like we need a pipeline for clients, we need to have a pipeline so that if somebody decides to move, or something happens to their family or something, the rest of us aren’t going to be all stressed out,’” White explained.

The post Why you need to ‘always be recruiting’ appeared first on Auto Service World.

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A recent study by the World Employment Confederation (WEC) revealed that more than eight in 10 business leaders (81%) believe advancements in artificial intelligence (AI) will necessitate new skills and innovative work methods.

Despite this recognition, 78% of leaders express concern about their ability to train employees quickly enough to keep up with technological developments over the next three years.

The research, part of “The Work We Want” global initiative commissioned by WEC, includes insights from its first installment, “Agile Talent in the Age of AI.” This report highlights how generative AI is set to significantly transform workforces, emphasizing the need for both soft and technical skills to harness the potential of AI.

“It is clear that advances in AI have the potential to transform the workplace at an unprecedented pace, yet the growing technical and soft skills gap is a critical hurdle businesses must overcome,” said Jonas Prising, chairman and CEO of ManpowerGroup, a member of the WEC.

“While Gen AI will revolutionize many aspects of work, there are elements of jobs that are, and will remain, quintessentially human: collaboration, communication, creative problem-solving, and empathy towards others. Organizations must cultivate these uniquely human traits and invest in upskilling their workforce to succeed in this new digital era.”

Key findings from the report include:

• 80% of business leaders find it more challenging than ever to plan for future talent requirements.
• 92% of senior executives anticipate the need for a more flexible workforce within the next two years.
• To build this flexibility, organizations are adopting various strategies such as establishing sectoral talent pools (91%), implementing a skills-based hiring approach (89%), using online talent platforms (89%), increasing the use of contingent workers (88%), offering internal flexibility through job rotations (88%), and hiring talent from abroad (88%).
• Employing contingent workers is increasingly seen as a way to access rare digital skills, with 79% of senior executives noting that workers familiar with new technology can help spread knowledge to permanent employees.

The post The challenges of keeping staff updated with new tech appeared first on Auto Service World.

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A business owner of any kind, even auto repair shop owners, will view their business as their baby. But a shop coach wants you to let go of that feeling so you can view your shop differently and treat it with a more neutral perspective.

Emotions can sink your shop, warned Jay Huh, a business coach at Shop Fix Academy and owner of CarMedix in North Carolina. Compare that to an investor who buys a business and has no long-standing ties to the people. They will typically make decisions that are better for the success of the business because they have no emotion attached.

During the session How to Run Your Shop Stress-Free at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo, he referenced something he heard from another shop owner: They urged him to look at the business as an investor and to have all your thoughts and actions flow as if you’re an investor, not someone who started the business from the ground up.

How do you act like one? Do rolling 90-day reviews of every employee. You grade them on performance, culture and attendance. And if they don’t measure up, you let them go, Huh said. You hired them with certain expectations. So if they fall short, why are they still around?

“This is a contractual agreement. When you hire an employee it’s a contractual agreement to perform at an expected level. You have expectations when you hire an employee, do you not? And if [they] don’t meet those expectations, it’s a broken contract,” he explained.

But shop owners will rationalize keeping the person around. The employee may be going through a tough time in life, so they’re cut some slack. No one wants to be the bad guy either. But the bad employee is costing the shop owner money and time.

Huh wished he had that advice many years ago. He hired someone when they were 21 and watched them grow up in the shop. They got married, had kids, all of that. But the employee’s performance eventually started slipping. It started hurting the business. But Huh was attached to the guy — after all, he’d been working there for many, many years. He kept giving him another chance.

One day, he bit the bullet and let him go.

“Hardest thing I had to do,” Huh admitted. But once he did it, Huh knew it was the right choice and that it required him to take on a different mindset.

The post The mindset you need to have for your shop appeared first on Auto Service World.

While there may have been an initial push for consumers to choose private label options for their automotive aftermarket needs, it appears the area isn’t growing.

Nathan Shipley, executive director of industry analysis in automotive at Circana, showed data from the last three years and it all suggested that numbers are flat in this area.

“But there’s not some major shift to private label like I think a lot of us would expect as we have gotten into a little bit tougher economic times this year,” he said at AAPEX 2023 during his session, Aftermarket Outlook 2024.

A low-income consumer was more likely to opt for private labels more often than a higher-income one. Private labels made up 50 per cent of their purchases.

“So [there is a need out there] for branded offerings and not discounting having premium products targeting that higher income consumer,” Shipley said.

Shipley had previously noted that it was the higher-income consumer who was frequenting the aftermarket more often. Retailers, he said, need to account for that when thinking about their product offerings.

That said, consumers are finding sticker shock, such as with tires. It’s something that they buy every several years. But when they spent $1,000 five years ago and are seeing prices about 50 per cent higher now, they’re taken aback.

“So that starts to influence decision-making as it relates to what you’re going to buy,” Shipley pointed out.

Supplier promotions starting to come back, though. After a few years of no or very few of them offering promotions on their products, the mood is shifting.

“We’re starting to see that lever get pulled as a way to drive demand,” he said. “For the first time this year, we’re to a level higher than we’ve been the last four years at this point in time. So I think that’s just an interesting observation.”

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Employment levels in the auto repair sector are higher than pre-pandemic levels, according to data from DesRosiers Automotive Consultants.

The automotive aftermarket showed robust growth in 2023, with the automotive repair and maintenance sector reaching 121,000 employees by December, surpassing 2019 levels by 4.8 per cent. Similarly, employment in automotive parts and accessories stores came in at about 5 per cent above pre-pandemic figures.

However, other sectors lagged behind. Motor vehicle manufacturing remained 11% below 2019 levels, while automobile dealers were still slightly short of returning to pre-pandemic employment numbers.

“The overall employment picture in the automotive space was positive by the end of last year,” commented Andrew King, managing partner at DesRosiers. “With the manufacturing side of the industry transforming, the retail aftermarket led in employment growth.”

The broader automotive sector saw continued employment growth throughout 2023, nearly reaching pre-pandemic levels with 604,000 recorded employees by December, just 0.7% below December 2019.

The post How much auto repair employment has grown appeared first on Auto Service World.

With average age rapidly growing, the types of vehicles that the aftermarket is servicing are expanding just as quickly.

What was once considered anything in the six-12-year-old range has now expanded to well beyond that, explained Todd Campau, aftermarket practice leader at S&P Global Mobility.

A major driving force is passenger cars, he said at AAPEX 2023 during his presentation, Trends Impacting the North American Aftermarket.

“The passenger car average age is growing nearly out of control at this point because we’re basically, when you think about it, we’re putting 20 per cent of all new sales into passenger cars. They maintain about 40 per cent market share,” he said.

The average age of a passenger car in the U.S. was 13.8 years. Until passenger car market share drops to around 20 per cent, average age is going to continue to run up.

Light trucks, by comparison, are at 11.8 years now after they sat at about 11.5 consistently for some time.

“We’re beginning to see critical mass reached in that crossover utility space. And it’s been holding that high market share for a few years,” Campau observed. “So we’re going to start to see it climb a little bit on the light truck side, too.”

But that’s only part of the story for Campau. More interesting is how these vehicles are moving through their lifecycles.Over the next 10 years, the U.S. is expected to add 19 million vehicles to its fleet that are over the age of eight years.

“This tells me that the sweet spot is going to continue to grow and elongate,” Campau said. “If we have almost 100 million vehicles in 2033 that are over 16 years of age, No.1, average age is going to continue to climb because of this. And, No. 2, we’re going to be seeing a lot more repairs for a lot older vehicles for a longer period of time.”

This is the cumulative effect of vehicle sales during the Great Recession that started in about 2008 and the supply chain impacts of the COVID-19 pandemic and the economic uncertainty since.

In other words, years in which the vehicles in operation numbers would have been replenished and were not — vehicles that would have been typically replace were not. So older vehicle remained on the road and were delayed until later, if at all. About half of all vehicles in the vehicle fleet are going to be older.

“So really good news for us because almost all those repairs … to our channel,” Campau pointed out.

But that means non-traditional players will be coming after traditional business as they see growth opportunities.

“You are seeing more probably OEs trying to get into repairing older vehicles for sure. And this is why. They’ve discovered that this work can be positive to the bottom line. And it’s better than the warranty work they get stuck doing for all the recalls and things like that,” Campau said. “And so they’re going to continue to push into trying to repair more of these old vehicles. But in general, right now, that’s our sweet spot. That’s where we do the best work. And it’s going to grow rapidly.”

The post How average age is expanding aftermarket sweet spot appeared first on Auto Service World.

Shops that want to utilize social media and produce video content may see do-it-yourself-style content as an easy way to break in.

Professional technicians likely think it’s easy content to create since they know what they’re doing and can help consumers with simple tasks for their vehicles. It may be easier than trying to create educational videos for fellow techs or provide entertainment, for example.

But Chris Enright, owner of Enright Automotive, steers clear of DIY content, seeing it as a way to keep customers out of his shop.

“I hate DIY videos. I don’t like doing them, I don’t enjoy doing them. I don’t even like watching them. It’s just not my thing,” he during the session Rev Up Your Marketing with Video Advantage at this year’s Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

From his point of view, he wants people to spend money in his shop — if he’s showing people how to fix their vehicles themselves, then that’s money he’s not making. He noted that he often gets requests from his 65,000 followers on Instagram asking for it.

“That’s how I support my wife and kids,” he explained. “I don’t want you to fix your own car. I’m just being honest with them: I want you to bring it to me so I can pay my bills and support my wife and children.”

But, emphasized, that’s him. If you enjoy DIY-style videos, go for it, he said. The point of being on social media is to do what you enjoy.

“You got to decide what you want ultimately at the end,” Enright said. “But again, you want to enjoy it.”

His co-presenter during the session was Brian Walker, owner and CEO of Shop Marketing Pros. He has a different take.

“In our business, we do a ton of DIY,” he explained. “We teach people how to do their own marketing.”

The way he sees it, there will be those who see him as the guy who knows what he’s doing and the customer will want him to take on the work for them.

When looking specifically at auto repair, he still applies that logic. “Obviously, you’re not going to teach somebody how to put a head gasket on their car or something like that,” he said.

But for more simpler or semi-technical things, it may be a good idea. “Because you’ll have that person who starts watching your videos,” Walker explained. And if they’re DIYer, they may be fixing the cars of people they know. But when there’s more difficult work to be done, you’ll be top of mind for them because they’ve been learning from you.

“So I do see the value in the DIY videos,” Walker said.

At the end of the day, be authentic, Enright stressed. Don’t fake it.

“People are tired of being sold stuff,” he said. “If you watch the trends right now, the highly polished, highly edited, well-done videos are actually not doing well anymore. They’re actually tanking in views. And the ones that are not highly edited, not highly polished [and are] genuine and authentic are what’s skyrocketing in the algorithm.”

The post What types of videos should you create for social media? appeared first on Auto Service World.

For three full days, shop owners, advisors and technicians gathered in Nashville for training of all varieties.

The Worldpac Supplier and Training Expo was held at the Gaylord Opry in Nashville April 24-28, offering plenty of educational opportunities, from technical knowledge to business management to customer service and more.

There were more than 400 hundred classes, of which nearly 2,400 attendees took part. In all, 3,355 people took part in the event, from service professionals to vendors representing about 400 companies in the two-day expo.

There were 211 attendees who made the trip to the show from Canada. Another 138 attendees were made up of students from Lincoln Tech in Nashville and multiple schools from the Metro Nashville Public School system, all of whom had their attendance sponsored by Worldpac.

 

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The event officially kicked off on April 25 with a morning keynote from executive vice president Bob Cushing, who highlighted the vast changes taking place in the industry, economic pressures on consumers, challenges to the industry and where the growth opportunities are.

Attendees then headed to training for the day, able to choose from a variety of classes that ran the gamut from the technical, such as specific vehicle issues, electric vehicle education, ADAS and more, to shop management, such as managing financials, marketing, social media marketing and more, to service advisor training that touched on various front-end customer issues and strategies. In all, there were 392 training classes — 80 business management classes, 52 hands-on classes with full vehicles or portions of vehicles in class and 203 classes focused on emerging technologies — led by almost 180 instructors.

Day 1 was highlighted by a dinner and keynote from retired Navy Seal Marcus Luttrell — whose story of serving overseas was turned into the movie Lone Survivor, starring Mark Wahlberg. He gave a passionate talk with Cushing in a fireside chat-style conversation.

The next two days were focused on more training. The nights featured the supplier expo where parts manufacturers, tool suppliers and shop management companies were able to meet directly with attendees.

A special lunch on April 27 focused on women in the aftermarket. Celebration Night featured a performance by Little Nog Town at the Country Music Hall of Fame and Walk of Fame Park.

The STX will take place at the Gaylord National Resort & Convention Center outside of Washington, D.C., in National Harbor, Md., from Aug. 19-23, 2026.

View a quick highlight reel on our Instagram page and the photo gallery below.

Worldpac STX 2024

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The returns process for Amazon is a significant draw for customers. Automotive aftermarket suppliers and distributors selling directly to customers are trying to offer a better experience to ensure they’re the first call, not the digital retail giant.

A panel discussion at the MEMA Aftermarket Suppliers Aftermarket Technology Conference tackled how returns can be better handled in the industry.

“We’re trying to make it better and better,” said David Seewack, CEO and founder at Find-it Parts during the session, E-commerce Outlook: Growth Opportunities for Aftermarket Products.

His company is trying to mimic Amazon by including a packing slip and shipping label with instructions on how to return the part.

“Because returns are so important to people, we really take the returns — because we’re looking for the lifetime value of the customer,” Seewack said. “And the minute you don’t take return, you’re kind of dead in the water. So we just deal with it. We try to be efficient about it. We try to make sure they buy the right part. But it’s just the cost of the business.”

Erik St. Pierre, co-founder and COO at PartsTech, acknowledged that improving back-end capabilities is an industry-wide problem.

“That reverse logistics, it’s just not there,” he said.

“We need to solve for reverse logistics and make that process easy electronically. We need to solve for order status and delivery tracking — it’s ridiculous that you can order a pizza and track it as the pepperoni is being put on it but in most cases, you have no idea where your parts delivery driver is.”

And don’t think that having ideal data will solve all your return problems, Brian Servatius, vice president of business development at RevolutionParts, pointed out. But to fend off competition from Amazon, it starts with a good digital presence.

“The content, the quality of the images and the product information has come a long way in the last 10 or 15 years since I’ve been in the industry,” he added. “But I think it’s also understanding what’s the right way to make sure that we’re presenting well, whether it’s on Google or wherever else — the central places that people want to go to see these products that are there. And they present the information that they need.”

Servatius also said one-hour delivery doesn’t always have to be in play. Yes, some will need the part right away but it’s not always necessary.

“So we don’t have to play to the highest bar, but we need to kind of be playing the same game,” he said. “And that’s sort of what I’ve been evangelizing for the last 10 years or so is: How do we take that playbook and, within realistic realms, bring our products in the automotive industry to level ourselves up to be on an even playing field, to put a bit foot forward and have that presence and capture consumers off digital engagement.”

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A financial expert for auto repair likes the idea of including land in the deal when looking to buy an auto repair shop.

During the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City, attendees were informally asked if they prefer the land in a sale. Most said yes, while others said it depends on the deal.

Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, which deals exclusively with the automotive aftermarket, can see why some may not want it due to the added financial investment needed. But if you can afford it, he recommends it just based on the return on investment.

For example, say the shop is worth $1 million and so is the land. He sees that as a better deal than spending $1 million on two shops and leasing.

Look around, Demarest urged, there are fewer shops around. Shops are being forced to close so the land owner can develop it into condos, for example.

And if you want to move locations and build on a new piece of property, good luck getting a permit.

“You go in there and say, “Hey, I’m going to build a building, I’m going to build a shop here. They’re like, ‘The hell you are. We’re not going to give you a permit for it.’ They don’t want shops,” Demarest said of municipalities.

So owning the land means your shop won’t be forced to move or close down. He’s had clients who’ve leased the land for 30 years but the landowner suddenly dies. The kids take ownership and want nothing to do with being landlords. Or the landowner is pressured by the municipality to sell the land.

“You’re controlling your own destiny if you own it,” Demarest said.

He also recommended to never do a deferred deal on real estate — or really anything — calling it a lose-lose for the buyer and seller because you never know what the market is going to do.

If you value the real estate today at $800,000 for a deferred purchase and the value doubles, then what? The buyer won’t exercise their right to buy it at the higher cost; conversely, if the land is now $600,000, the seller is not going to want to follow through on the loss.

“So deferred sales, real estate, leave it out there,” Demarest recommended. “Hey, you can get it in five years, whatever the fair market value is. Don’t play the games with it.”

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Canadian executives are losing sleep over the burgeoning threat of AI-generated deepfake scams, a new survey revealed.

The research from KPMG in Canada included 300 organizations that have experienced fraud and showed that 95 per cent of leaders are highly concerned that deepfake technology has escalated the risk of fraud. Additionally, 91 per cent fear generative AI could further enable criminals to execute corporate misinformation and disinformation campaigns.

The study also found that about one-third of these organizations have been targets of such campaigns, highlighting the growing challenge of external fraud.

“As fraudsters are becoming increasingly sophisticated in their attack methods, it’s more and more challenging to deter criminals,” said Enzo Carlucci, national forensic leader at KPMG in Canada. “Organizations need to find new ways to strengthen their anti-fraud programs and stay one step ahead of scammers, or else they could be facing increased financial, legal, regulatory and reputational risks.

Survey highlights reveal that a vast majority of victimized companies acknowledge the augmented risk of fraud due to generative AI and deepfakes. Moreover, current economic conditions are feared to potentially drive employees or customers towards committing fraud. The transition to remote work is believed to have increased fraud risk, mainly due to reduced oversight.

The poll revealed that 43 per cent of companies currently experience internal fraud, such as embezzlement or data theft, while one-third face external threats like payment fraud or cyberattacks. Most notably, companies reported losing up to 5 per cent of their profits to fraud over the last year.

Carlucci pointed out that fraud tends to rise during economic downturns, which may push some individuals to commit fraud out of desperation, especially when working remotely. He stressed that the prevailing economic challenges make the cost of fraud particularly high for companies striving to remain profitable.

According to the survey, the most prevalent external fraud schemes involve fabricated information, often enabled by technological advancements. The leading scams include payment fraud, misinformation campaigns, and synthetic identity fraud. Internally, companies face issues like embezzlement and the misuse of personally identifiable information.

“In the current economic environment, many companies are struggling to stay profitable, so any profits that are lost to fraud is too much,” Carlucci said.

Despite these challenges, 77 per cent of companies claim to have fraud detection programs, but only 39 per cent consider them extremely effective. Similarly, while over half have fraud prevention programs, less than 40 per cent rate their anti-fraud policies and financial controls as extremely effective.

In response, nearly half of the respondents are turning to emerging technologies like AI and advanced data analytics to combat fraud. Marilyn Abate, a partner in KPMG’s forensic and financial crimes practice, urged companies to harness AI technologies to counteract fraudulent activities effectively.

“Companies need to use AI to fight AI. These tools are fast-becoming essentials in the fraud toolkit to prevent fraudsters from gaining the upper hand,” she said. “But if you don’t perform regular fraud risk assessments to identify external and internal risks and vulnerabilities, you will always be at a disadvantage.”

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A shop will hang on to a terrible person because the owner will convince themselves that they can’t get anyone else. They won’t fire an incompetent employee because they believe they need all the help they can get.

That’s all nonsense, according to Rick White, president of 180Biz, who coaches automotive repair shops.

A shop owner knows who they’d get rid of when business gets slow. So if they’re not good enough then, why are they there now?

“It’s because you’re tolerating it,” White said during the presentation Business Boss Leader: From Creeper to Leader at the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo in March.

And you’re tolerating it because you believe there’s no one else available out there to fill their role. But that’s just a story you’re telling yourself to justify keeping them.

While he acknowledged there aren’t as many as there used to be but “there are good people out there; they just don’t know about you, or you haven’t found the button to push to get them interested.”

As a result, shop owners won’t take action against problematic employees.

“The reason why you’re afraid to hold someone accountable, you don’t want to alienate them is because you don’t have a bench,” White said at the conference in Kansas City.

What’s a bench? Think of it in sports terms. A great team has a great bench — support players who can step up and deliver great performances and have great attitudes.

Shops don’t generally have that. Each shop needs two to three service advisors and the same number of technicians at the ready.

“The mistake we make in our industry is we are completely reactive,” White observed. “We wait until somebody leaves to find somebody to replace them, then it takes too damn long.”

Another important factor to keep in mind so as to not make hiring mistakes: Bring someone in who you know fits within your team environment.

“We are an industry that hires people for what they can do and we fire them for who they are,” White said. “And that’s because we’re hiring skill and not mindset. We’re hiring somebody to fix a car, not somebody that fits into our culture.”

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The ownership cost of Electric Vehicles (EVs) is experiencing a significant shift, challenging the previously held notion that EVs are cheaper to own than their Internal Combustion Engine (ICE) counterparts.

Recent findings from Lang Marketing highlight a trend: The depreciation rate of EVs is outpacing that of ICE vehicles. And there will be impacts on the automotive aftermarket.

“Most electric vehicles have plunged in value over the past 12 months, increasing the cost of ownership and threatening their sales in the new and used auto markets,” the consultancy noted in its report, Plunging EV Values Boost ICE Aftermarket. “This could have significant consequences for the proliferation of electric vehicles on the road and their impact on the aftermarket for years.”

The report indicated that in the first quarter of 2024, the depreciation rate of EVs in the United States jumped by nearly 30 per cent from the previous year, a rate almost tenfold higher than that of ICE vehicles. This dramatic depreciation, Lang noted, rate underscores emerging concerns about the financial viability of owning an EV and hints at a broader re-evaluation within the automotive market.

Several key factors have been identified as driving forces behind the rapid depreciation of EVs. Dealerships across North America are slashing prices on new EVs to clear their lots of surplus inventories, a result of dwindling consumer demand amidst a surge in supply. Each reduction in new EV prices exacerbates the depreciation rate of existing EVs on the road.

Additionally, “technology depreciation” has become a critical issue for EVs. As these vehicles age, they fall behind in terms of technology, particularly in range and charging capabilities, compared to newer models. This obsolescence, coupled with operational challenges such as extended charging times and higher insurance costs, has diminished their appeal in the used vehicle market.

Previously, some EV models enjoyed lower depreciation rates due to their scarcity in the used market. However, the influx of new EVs and reduced prices has burst this bubble, causing depreciation rates to soar.

The leasing market, which constitutes a substantial portion of new EV transactions in the U.S., faces significant turmoil due to soaring depreciation rates. The diminished residual values of EVs at the end of leases have necessitated automakers to financially compensate leasing companies, thereby increasing the cost of leasing new EVs and potentially hampering market growth.

The consequences of escalating EV depreciation rates extend beyond individual ownership costs to affect the broader automotive landscape. In the used vehicle market, the prospect of continued depreciation, alongside operational concerns, may deter buyers, despite the initial appeal of lower prices.

Aftermarket implications

The swift decline in the value of EVs is set to have significant repercussions for the aftermarket industry. Firstly, the noticeable depreciation may dampen the demand for EVs among new vehicle buyers, potentially leading to additional reductions in prices. This cycle of decreasing prices may inhibit the growth of EVs’ market share and their influence within the aftermarket.

Secondly, as EVs depreciate at a faster rate, ICE vehicles, which experience slower depreciation, might see an uptick in their market share and sales volume in comparison. This disparity in depreciation rates could favor ICE vehicles, making them more attractive to consumers and thus strengthening their presence in the market.

Thirdly, the pronounced depreciation of EVs could indirectly slow down the depreciation rates of ICE vehicles. Since ICE vehicles are depreciating at a slower pace than EVs, this trend could reinforce the value and longevity of ICE vehicles in the operational fleet.

“These factors and other issues will likely strengthen the VIO position of ICE vehicles for years to come and contribute to their aftermarket dominance through 2030 and beyond,” Lang observed.

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While shops may want to cling to the traditional consumer, customers are changing how they want to do their business in their repair shops. Ignoring their desires will only leave your shop in the dust, an industry expert warned.

There are three types of customers today, explained Neury Freitas, partner with business management firm Roland Berger, which works with the aftermarket. They are the traditional customer, the convenience-first customer and the contactless one.

The traditional customer has a very offline journey through the repair process. These customers identify the need — a vehicle repair or service — and they want to find a shop that provides them with a great experience in person. This is the customer who will stay in the waiting area and watch as the technician works on the vehicle.

Then there’s the one who focuses on convenience. They prefer to have a digital inspection report. Videos are great. They also want to book their appointment online and have remote drop off, meaning they drop their car off in the lot and leave. They want regular updates on the work being done, along with videos and pictures to show them. They will come in person to pay and pick up their vehicle.

The third type is completely contactless. They want maximum convenience. It’s everything the convenience customer wants but no physical interaction. They don’t want a detailed report though – just give them the highlights in a simple digital report.

Shops don’t need to pigeonhole themselves into serving just one type of client. But rather they will need to find a way to cater to all of these types of clients.

“Do we think that every single shop or every single consumer will look the same? Absolutely not,” Freitas said. “We believe that the shops, they need to be prepared to serve [a variety of different people].”

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A shop owner and coach has one simple task he wants all shop owners to go through with everyone in their shop.

Sit down, write down everyone’s name on a piece of paper and ask: If you were to fire that person, how would it impact your shop? And what would your employees say about it?

That’s what Jay Huh, a business coach at Shop Fix Academy and owner of CarMedix, advised hundreds of attendees of the session Run your Shop Stress Free at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo to do.

If your business will run the same and “Thank God he’s gone,” will be the response from your staff, “you might want to let them go,” Huh advised.

If you have techs or advisors who are bad employees, they suck the energy out of the staff who are great performers. Those great performers see you tolerating the bad work and they bring themselves down a few notches. Or they leave, which is something that happened to Huh.

Jay Huh, a business coach at Shop Fix Academy and shop owner, speaks at the MWACA Vision 2024 event in Kanscas City

“High performers do not tolerate low performers,” he emphasized.

Huh had two advisors who used to be great. But then their performance started falling. Average repair orders fell. Closing rates fell. Hours then followed suit. Those techs who eagerly showed up early for work were coming in late. One of his top techs then handed in his resignation. Then his highest performing tech did the same soon after. He had four staff members leave in three months.

Huh admitted he let those poor performers drive away his good staff because he was afraid to fire people.

“Do you think that might cause a little bit of stress?” he asked rhetorically. “Your low performers, it will drive away your best people.”

And when you look around, it’ll just be your B- and C-level staff in your shop. And they’ll come up to you saying they’ll never leave, that they’re loyal and you don’t have to worry about them, as they did to Huh.

“I know you’re never going to leave me — I’m trying to shake you,” he said.

It ties back to fear. And fear leads to poor decisions, Huh warned.

“Now I’m hiring on all these people that are not qualified. Now. I’m just trying to fill a seat,” he said. “You lower your standards for the inadequacies of the team.”

The spiral begins when you pay attention and put energy into your low performers and ignore your high performers. As the owner, you have to have your employees’ best interests in mind.

“Prolonging the inevitable when you know you have to deal with something and when you know you have to let somebody go — that’s bad leadership,” Huh said. “You have people right now in your business that don’t belong on the bus. And it’s your selfish interest that keeps them there.”

But you have to take a stand, he added.

“When you fired that employee, that means you’re standing up your business,” Huh said.

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The automotive service industry is undergoing a significant technological evolution, transforming traditional service models into highly efficient, customer-centric operations. At the forefront of this transformation is incorporating smart devices and Internet of Things (IoT) technologies. These innovations are not just modern conveniences but are emerging as game-changers for auto service shops.

By integrating smart technologies, businesses can significantly enhance their operational efficiency, diagnostic accuracy, and overall customer experience. The ability to connect, analyze, and automate various aspects of the service process promises to redefine automotive maintenance and repair standards.

The drive toward digital transformation

The push for digital transformation within the automotive service industry is largely driven by two key factors: Escalating customer expectations and the imperative for operational efficiency.

Today’s consumers are accustomed to the convenience and personalization afforded by digital technologies in other sectors, and they increasingly expect the same from their auto service experiences. They demand quicker service times, transparent processes, and more engaging interactions with service providers. Concurrently, auto service shops seek ways to streamline their operations, reduce waste, and maximize productivity to remain competitive in a rapidly evolving marketplace.

Smart technology, with its capacity to connect devices, collect vast amounts of data, and automate complex processes, directly addresses these demands. Through IoT-enabled devices and smart diagnostic tools, auto service shops can achieve a level of precision and efficiency previously unattainable. These technologies expedite the diagnostic and repair processes and enhance customer communication and service personalization, setting a new benchmark for what consumers can expect from their automotive service providers.

Key areas for smart technology integration

Diagnostic tools and equipment

Incorporating smart diagnostic tools in auto service shops significantly enhances the accuracy and speed of vehicle assessments. These advanced tools, equipped with the latest technology, can quickly interpret a vehicle’s data and pinpoint issues with remarkable precision. It accelerates the diagnostic process and increases the likelihood of a first-time fix, reducing the need for return visits. Such tools enable technicians to understand complex vehicle problems better, leading to more efficient repairs and maintenance services.

Inventory management

IoT devices are crucial in revolutionizing inventory management within auto service shops. By automating the tracking and management of parts and supplies, these devices significantly reduce the manual effort required, minimizing errors and saving time. This streamlined approach to inventory management ensures that the right parts are available when needed, reducing service times and enhancing overall operational efficiency.

Additionally, monitoring inventory levels in real time can lead to more informed purchasing decisions and reduce overhead costs associated with overstocking or understocking.

Customer service and engagement

Smart technology offers new avenues for improving communication with customers, making the service experience more engaging and personalized. Automated updates can keep customers informed about the status of their vehicle repairs, reducing uncertainty and enhancing transparency.

Online appointment scheduling systems, powered by smart technology, offer convenience, allowing customers to book services at their preferred times without needing back-and-forth phone calls. Furthermore, personalized service offerings, based on the historical data and preferences of each customer, can be generated, fostering a sense of value and loyalty. This level of personalized engagement and efficient communication significantly enhances customer satisfaction and retention.

Benefits of smart technology in auto service shops

Operational efficiency

Smart technologies introduce a significant level of automation into auto service shops’ daily operations. By automating routine tasks such as inventory management, appointment scheduling, and even certain aspects of diagnostics, staff are freed up to concentrate on more complex and nuanced service needs.

Automation speeds up these processes and reduces the likelihood of human error, contributing to a smoother, more efficient workflow. As a result, technicians can dedicate more time to delivering high-quality repairs and maintenance, ultimately boosting the shop’s operational efficiency and capacity to serve more customers effectively.

Enhanced diagnostic capabilities

The advent of advanced diagnostic tools powered by smart technology has revolutionized how auto service shops identify and address vehicle issues. These tools can diagnose problems with greater accuracy and predict potential issues before they become serious.

For instance, by analyzing data trends over time, smart diagnostics can alert technicians to parts that are wearing down and likely to fail soon. This predictive capability allows for proactive maintenance, preventing breakdowns and the associated inconveniences to customers, extending the vehicle’s lifespan, and saving customers money in the long run.

Improved customer satisfaction

One of the most noticeable impacts of integrating smart technology into auto service shops is enhancing customer satisfaction. Real-time updates keep customers informed about their vehicle’s service progress, setting clear expectations and building trust.

Transparent service processes, facilitated by digital tools, allow customers to understand the services being performed and their associated costs, reducing surprises and fostering a sense of fairness and transparency. These factors contribute significantly to building customer trust and loyalty, as customers appreciate the convenience, communication, and care that smart technologies enable.

Overcoming challenges in implementing smart technology

The transition to a more technologically advanced service model comes with challenges. Upfront costs for new equipment, software, and robust network infrastructure can be substantial. Training staff on these new systems requires time and resources, and ensuring the security of digital data is paramount.

Auto service shops can adopt a phased implementation strategy to navigate these hurdles. This approach allows for the gradual introduction of smart technologies, spreading the financial impact over time. Shops can start by investing in technologies that offer the most immediate benefits to operational efficiency and customer satisfaction, generating quick wins that can help fund future tech investments.

Partnering with technology providers who offer comprehensive training and support as part of their service can address training needs. This ensures that staff are proficient in using new technologies and can troubleshoot basic issues, reducing downtime and maintaining productivity.

Data security concerns are mitigated by selecting technologies that comply with industry-standard security protocols and investing in staff cybersecurity training. This dual approach ensures that the technology and its users are equipped to protect sensitive customer information.

Future outlook: The smart auto service shop

Looking ahead, integrating artificial intelligence (AI) and machine learning (ML) into auto service shops promises to revolutionize the industry further. AI-driven diagnostics could offer even more precise and comprehensive analyses of vehicle issues, learning from every case to improve future diagnostics. Machine learning algorithms could optimize inventory management, predicting parts demand based on historical data, seasonal trends, and specific customer patterns.

The potential for smart technologies to transform service models is immense. For example, predictive maintenance services, powered by AI and IoT devices, could notify customers when their vehicle will likely need service before an issue arises, scheduling appointments automatically based on the customer’s calendar and shop availability. Customer interactions could become more personalized and proactive, with AI analyzing customer preferences and vehicle history to tailor communication and service offerings.

Smart technologies could enable dynamic resource allocation in business operations, automatically adjusting staffing levels and workshop schedules based on real-time demand forecasts. By optimizing workloads and reducing stress, smart technologies improve efficiency and enhance employee satisfaction.

As these technologies evolve and mature, the smart auto service shop will become a hub of efficiency, precision, and customer-centricity, setting a new standard for the automotive service industry.

Wrapping up…

The integration of smart technology in auto service shops represents not just an upgrade to existing operations but a fundamental shift towards a more efficient, accurate, and customer-focused business model. The benefits of embracing smart technology are clear, from enhanced diagnostic tools that offer precision and speed to IoT-driven inventory management systems that streamline operations and customer engagement platforms that enhance satisfaction and loyalty.

As the automotive service industry continues to evolve, those shops that leverage smart devices and IoT technologies position themselves at the forefront, ready to meet the changing demands of customers and the market with agility and confidence.

For auto service shops looking to remain competitive and future-proof their operations, the strategic integration of smart technology is a critical step. Beginning with a thorough assessment of current technology use and identifying areas for improvement can reveal opportunities where smart technology can have the most immediate and impactful benefits.

Whether automating routine tasks, improving diagnostic accuracy, or enhancing the overall customer experience, the smart integration of technology into auto service shops is an investment in a more sustainable, profitable, and customer-centric future.

Patrick Chown is the owner and president of The Network Installers and Safe and Sound Security.

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CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Ronald Tremblay, ARA chairman  |  NATA president | Owner,  The Garage

What will change the most for auto service shops in 2024 is the need for a robust human resources plan to sustain a profitable business focused on customer experience.

Shops will need to retain skilled people in their service bays and complete the transition from having established employees to those from a much younger generation. This awesome younger generation has different values and expectations about their lifestyles. Mastering this transition will be crucial for remaining optimistic about the future growth of business in this industry.

Cost of living has gone way up in most provinces. Trades income levels are climbing fast and your business must be able to afford these increases to remain viable.

On the other side of the equation, businesses must remain diligent with their efforts to attract and retain great customers through their digital efforts and word-of-mouth marketing, as well as by maintaining the appearance of their premises, both inside and out. All these things work together to support a growing confident business and will lend well to maintaining the confidence your customers have in your business.

Have a trusted, knowledgeable and confident relationship with your business. Customers today are facing a challenging moment with EV adoption. Being a trusted company in their corner presents the greatest opportunity for growth. This is the year to really listen to your customers and help them face the next five years knowing they are making the right choices for themselves, no matter what those choices are.

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CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Zakari Krieger, Vice President  |  Prime CarCare, Fix Network

In the ever-changing landscape of the automotive industry, 2024 brings forth a confluence of macro and micro trends that demand a keen understanding and strategic response. Current economic conditions are ever-evolving, prompting a holistic approach to ensure resilience and sustainability. While external factors remain unpredictable, we must remain committed to fortifying operational excellence and elevating the customer experience.

Harnessing the power of data and analytics is pivotal in optimizing our businesses. In a world inundated with information, the focus should be on extracting actionable insights to streamline operations, enhancing efficiency and elevating customer satisfaction. The road ahead is paved with informed decisions and strategic precision to improve our share of wallet.

As the automotive landscape shifts towards electric vehicles, standing at the forefront, we must prepare for the impending impacts. Our proactive strategies involve staying abreast of technological advancements, adapting our service offerings, and aligning our infrastructure to accommodate the evolving needs of the market.

Yet, even with these forward-looking initiatives, we must acknowledge the industry’s challenge: A shortage of skilled trade workers. Navigating through this labour scarcity requires innovative workforce strategies, investments in training programs and collaborative efforts to attract and retain talent.

In 2024, our commitment must extend beyond the bottom line; it’s about navigating industry trends with adaptability and foresight. Steering through economic currents, harnessing data-driven insights and preparing for the EV revolution, it is a steadfast dedication to operational excellence and talent cultivation that is the critical focus for our network.

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Those mundane digital tasks automotive aftermarket leaders hate doing can likely be taken care of by artificial intelligence.

A panel discussion explored ways that tasks like responding to customer reviews, sending out surveys and posting on social media can all be handled by an AI system.

This lets those in the business take on other, more important work, David Brondstetter, CEO of SureCritic, observed at the recent MEMA Aftermarket Suppliers Aftermarket Technology Conference.

As a reputation management company, his team sees value in letting AI at least at first provide suggested responses to customer reviews. That means someone reviews the AI response and, if approved, they click the button to make it go live.

“The No. 1 complaint from our clients? ‘Why do we have to click a button?’” Brondstetter reported during the panel discussion, ChatGPT & AI Applications for the Aftermarket. “They loved the responses and they wanted it automated. So we automated that process and then we moved that on social media posts as well [and] actually creating social media posts and memes for them to push out.”

So the job could be given to AI could then tell customers about specials in the repair shop or jobber store has ongoing instead of an employee putting it together. It’s tasks like these that businesses don’t have enough time for, Brondstetter noted.

“And they know they need to do it and know they maximize their reputation; they have content on Facebook, Instagram, Twitter, LinkedIn, etc. But those are the things that fall on the ground,” he said. “And your choice at that point in time is either throw people at it or throw technology at it.”

There are also those shops and retailers that don’t even acknowledge when a customer leaves a review. Even when someone is tasked with responding to a review, it’s a canned response like, “Thanks for coming in. See you next time!”

“And it [feels] kind of a little bit like a slap in the face to the customer who took this extra time to go and write a review or to respond to a survey,” Brondstetter observed.

What AI can do is give a more human-sounding response and even vary its tone. So even if the response is coming from the same business and the same AI response generator each one can sound a little different.

AI also helps guard against what Brondstetter has seen often is a business owner not responding kindly to a negative review. “That’s never good,” he said. Maybe the shop owner feels the need to defend the business but other customers and potential ones as well will see the response and perceive the business negatively no matter what.)

“No matter who’s right, the shop owner loses,” he added. “So AI really in that respect, can help with customer satisfaction and help them to do business.

Importantly, Brondstetter noted, no jobs are being replaced — people are being moved to more important tasks around the business.

The post How AI can help with those mundane tasks appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Martyn Johns, National Director,  |  NAPA Autopro and Emerging Technologies | NAPA

The most significant change in automotive repair shops is being seen in technology and customer expectations. The need for digital transformation within ASP locations can no longer be ignored. The need for shop owners to have the required tools to quickly analyze, communicate and manage the operations of their business is paramount.

Also, consumers will continue to have higher expectations with repair shops. Owners will need to adjust their business practices, invest in customer-facing technology and find ways to make it easier for their customers to do business with them.

Two major challenges automotive repair shops will need to overcome in 2024 are the retention of staff and the need for additional training throughout the entire business. Management training, electronic systems and electric vehicle training are very quickly becoming must-haves to adapt and overcome. The required investment in organizational training will not decrease moving forward. Shop owners need to plan accordingly.

The biggest opportunity out there is growth: Gaining market share and future-proofing the business at the same time. Many shop owners still don’t plan for growth each year or do not fully implement growth plans every month. The Canadian automotive aftermarket is rapidly changing due to macro factors including aging demographics and significant changes in technology.

Choosing to future-proof your business with electric vehicle preparedness does not only cater to a fast-growing new customer base but also will allow your business to be ready for sale when you are ready.

The post CARS Executive Outlook 2024: Martyn Johns appeared first on Auto Service World.

Image credit: Depositphotos.com

When looking to sell, there may be some confusion as to valuation, especially in recent years as non-traditional buyers eye the industry as an opportunity.

For shop owners looking to sell — even those looking to buy — it’s important to understand what a shop can be properly valued at. That includes understanding the transaction multiple.

A typical multiple when selling a repair shop is about two-and-a-half to three times net income — meaning a buyer will typically pay three times your net income for your business, which generally includes non-monetary intangibles, explained Hunt Demarest, accountant and business valuator with accounting firm Paar Melis, which deals exclusively with the automotive aftermarket.

The multiplier on net income is what has been set as the top industry standard for a shop. So if your shop nets $300,000 a year in income, you could reasonably expect a selling price of about $900,000.

This is an area in which Demarest gets the biggest pushback. But a top multiplier is one where the business runs well, the owner is not involved in the day-to-day, the staff is great, the equipment is fairly new and things of that nature.

On the bottom end — and what could push your multiple even lower — is when you have none of the above, you’ve just lost a tech and the owner needs to sell rather than wants to sell.

Think of it as a sliding scale of desirability. The more desirable the shop, the higher the multiple, Demarest said.

“This is where you can kind of factor in intangible non-financial stuff that add value to a business,” he explained of the rationale behind the multiple.

Higher multiples are reserved for startups and fast-growing companies, he added.

“Now we see more and more people coming from outside the industry and buying auto repair shops.”

With the potential profitability of shops, private equity firms are seeing the opportunity to make their money back quickly and then some.

“Now we see more and more people coming from outside the industry and buying auto repair shops,” Demarest said during the session Transitioning Your Business at the Midwest Auto Care Alliance’s Vision Hi-Tech Training & Expo in Kansas City.

He’s asked private equity folks what made them interested in owning a shop, They don’t have a particular affinity for cars, they’ve never worked in a shop before and they don’t know about auto repair. So why?

“Most common thing people say it’s the highest return on investment of a small business,” Demarest said.

But they’ve also messed with what shop owners believe they can get for their business.

“I have seen some deals and some of these private equity companies have paid, where it’s like, holy cow,” Demarest said.

He’s seen private equity offer multiple times above what he figured would be the top end. And it’s been continuing.

“Over the last three years, we have had more shops sell than any time ever before,” Demarest noted. And for a good price.

It was essentially a domino effect where one group got in and the other feared they’d be missing out. But that seems to have slowed down now.

“It was really hot for a while and they were actually generally finding people” compared to shop owners looking for buyers, Demarest said.

It still doesn’t make too much sense to him.

“The private equity one is still one that I can’t really figure out because of these multiples that they’re paying,” Demarest said.

Private equities are not the buy-and-hold types where they’re saving it for their next generation. They buy something, pretty it up and look for the next buyer willing to pay top dollar.

“So if you’re going out, and you are paying double triple what the retail amount of these are, who’s going to be the next person that’s going to buy those?” Demarest wondered.

The post Valuing your shop: Understanding multiples appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Mike Howard, 2023 Shop of the Year  |  Art Turney’s Garage

It seems that the best way to prepare for change is to accept that it is coming. Change is inevitable. Because we never know exactly what it will be or how it will affect us, we must invest in technicians, tools, equipment, software, training, etc. That way, when change hits, we are (hopefully) in a position to tackle it head on.

I think the biggest challenge we face is access to a qualified labour pool. It’s a systemic and lingering challenge. Labour is our biggest expense, but it’s also where the revenue comes from. It’s a balance to ensure staff compensation is good, but not inhibitive. We are fortunate to have some real good techs, so it is imperative to keep them. We must offer what’s important to our people above and beyond compensation.

As the saying goes, “Don’t count the cars — make the cars count.” We need to look at providing more service/sales to our customers. Techs must look beyond the reason for the customer’s visit. We don’t want to sell our customers something they don’t need or want, but the opposite — we want to point out to them the cost of not maintaining and repairing their vehicle and help them to make informed decisions. Not all shops, ours included, have been good at that but it’s a way to improve sales.

The post CARS Executive Outlook 2024: Mike Howard appeared first on Auto Service World.

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As the Canadian federal government prepares to announce its budget on April 16, the Canadian Federation of Independent Business (CFIB) wants officials to prioritize measures that would reduce the cost of doing business.

A recent CFIB survey CFIB found that 77 per cent of small business owners believe addressing the rising prices and operational costs should be the government’s top priority for 2024, while 74 per cent are calling for a reduction in the overall tax burden.

“Small businesses are being crushed by escalating costs in every area, and we are only three months into the year,” Corinne Pohlmann, CFIB’s executive vice president of advocacy. “It’s crucial that the same effort aimed at mitigating cost-of-living pressures is also applied to alleviate the financial burdens faced by small businesses.”

Notable financial pressures include the upcoming increase in the carbon tax to $80 per tonne on April 1, alongside a 2% rise in the annual alcohol excise tax and the introduction of minimum wage hikes across several provinces. Additionally, the CFIB said, businesses are grappling with recent hikes in Employment Insurance and Canada Pension Plan contributions, significantly raising operational costs.

While CFIB has acknowledged the federal government’s efforts, such as capping the annual alcohol excise tax increase and providing relief to brewers, they argue that more comprehensive actions are required to tackle the impending tax increases this April.

To support small businesses, the CFIB has proposed several recommendations for the upcoming federal budget. These include issuing $2.5 billion in carbon tax rebates to all small businesses, reducing the federal small business tax rate, increasing the small business deduction threshold and cutting EI premiums for smaller employers. They also suggest eliminating the automatic increase on alcohol excise taxes and introducing measures to encourage investment in automation and training, alongside policies aimed at expanding the labour market.

“Supporting small businesses not only benefits owners but also their employees, clients, and communities,” Pohlmann said. “It’s high time the government steps up to facilitate smoother operations and growth for small enterprises in Canada.”

The post CFIB calls for small biz help ahead of budget appeared first on Auto Service World.

Calling all shop owners, technicians and service advisors, Jobber News wants to know what you think about issues affecting your business.

Take a few minutes to fill out the survey by clicking this link or filling out the form below. It’s your direct line to anonymously tell jobbers how well they’re serving you and for them to gain insights into how your shop operates.

The results will be published in the May 2024 issue of Jobber News.

This survey is intended to help Canada’s jobbers better serve the needs of automotive service providers. Your answers will help jobbers shape their businesses to serve you better. Please take a few minutes to complete the questions in this survey.

All responses are confidential.

We thank you in advance for your time.

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CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Jason Herle, CEO  |  Fountain Tire

Like 2023, technology will be the biggest driver of change and we expect it will continue to come at a faster pace. On the customer service side, integrated CRM software, digital vehicle inspections and our ability to leverage big data will allow us to deliver an improved customer experience while growing sales. From advanced driver assistance systems to connected cars and EVs, technology within vehicles and the equipment we use to service them is quickly evolving. We need to be prepared with adequate training to ensure our teams remain knowledgeable, efficient and safe.

Attracting and retaining skilled labour will continue to be key to capitalize on the opportunities in the aftermarket space. Beyond attracting new talent, upskilling or retraining the existing workforce to work on newer vehicles is critical. To tackle it, shops will need to identify the required training, where to obtain it (in person or online) and manage associated costs. Partnering with national part suppliers or working with aftermarket associations can help.

I see two major opportunities to grow aftermarket business this year. One is capitalizing on the aging car count (an average of 12.5 years for cars and light trucks in the US). The longer vehicles are on the road, the longer they require our maintenance and repair services. On the flip side, new car sales are catching up to pre-pandemic levels, but still lag the demand for them. As sales increase, we can gain market share from OEMs by servicing new technology including EVs and everything ADAS presents.

The post CARS Executive Outlook 2024: Jason Herle appeared first on Auto Service World.

Image credit: Depositphotos.com

Most people are afraid to make mistakes and that’s why they’re scared to be in positions of leadership or fully embrace such a role in an auto repair shop, according to a coach.

While one may hold a high-level title, they don’t act like they’re truly in the role because of fear, said Rick White, president of 180Biz.

He used to be that person, he told attendees of the Mid-West Auto Care Alliance’s Vision and Hi-Tech Training Expo in March in Kansas City in March.

“You know what I did? I realized that mistakes are just lessons. That’s all they are,” he said during his session, Business Boss Leader: From Creeper to Leader. “I win or I learn. That is something I live by. And guess what — if I learn, I won.”

Another issue is complacency. The owner or manager may feel good about the way things are going. They don’t want to fix what’s not broken. But, White pointed out, there is always something that can be improved upon in the shop. Just because things look good doesn’t mean you don’t need to address the issues.

Life is about going through different sets of pain, he said.

“How many of us are uncomfortable with something and instead of doing it, we put it off? We avoid it?” White asked. “But here’s the thing: Problems get bigger with neglect. Challenges get bigger with neglect.”

“Deal with stuff while it’s a little lizard. Don’t wait until it’s Godzilla eating Tokyo.”

He used the example of a shop client whose lease was up in 18 months. When asked what his plan was, the shop owner brushed him off, saying 18 months was plenty of time to sort things out.

“I went, ‘Dude, you don’t have 18 months,’” White recalled.

But people, this client being one of them, tell themselves they have more time than they actually do. White said shop owners lie to themselves this way. Because your options are far greater when you’re 18 months out than when you’re six months away and even more limited at three months.

“Deal with stuff while it’s a little lizard. Don’t wait until it’s Godzilla eating Tokyo,” White urged.

The same goes for a team issue — deal with it before it becomes a bigger problem. You may have worked hard to get the team you have. You don’t want to alienate anyone? Too bad, White said. If you have a team of good techs but you’re only getting four or five hours of work out of them each day, there’s an issue you need to confront.

A shop owner can’t lead their shop from the bays and they can’t lead the shop from the counter, White noted. The owner needs to separate themselves from the day-to-day and see things from a distance.

“When you’re in your shop, you can’t see the forest through the trees,” White said.

The post Why few embrace the shop owner or manager role appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Costa Haitas, President  |   The Mufflerman

We are enthusiastically looking forward to another year of growth for our shops in 2024. As economic conditions continue to put a strain on the cost of living for many Canadians, our customers continue to turn to our repair centres to assist them in extending the life of their vehicles while keeping them safe on the roads. It’s imperative that shops continue to provide complete inspections of their customers’ vehicles and present them with recommendations on repairs and preventative maintenance services that will keep them safe while avoiding unnecessary costs.

While the need for our services continues to increase, the biggest challenge in our industry is the recruitment and retention of employees. The increased cost of living is also negatively impacting our teams. So shop owners and operators must be running profitable operations to ensure that they can provide their employees with competitive wages.

The biggest opportunity for growth in 2024 will be capitalizing on growing car count through strategic marketing initiatives in your local markets. Shop owners and operators need to ensure that they’re continuously working on delivering best-in-class service to their customers while simultaneously providing a great culture in their shops for their teams. Also, now is the time to start planning and preparing for the future as the landscape of our industry and customer needs are changing.

The post CARS Executive Outlook 2024: Costa Haitas appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Bruce Eccles, Vice Chair  |  Automotive Aftermarket Retailers of Ontario (AARO)

The high interest rates and elevated inflation that we’ve been seeing will have consumers keeping their vehicles longer than they planned.

Many EV models have been around for a decade. I predict shops in the Greater Toronto Area will see more of them in their bays than previous years. In areas where EVs are not as common, the boom will be with their own clients and an increase in the eight- to 10-year-old vehicles that would have traditionally been traded in. Furthermore, in Ontario, the new DriveOn digital vehicle safety and emissions inspection program is rolling out.

Shops will be busy. Efficiency and profitability will require proper service appointment scheduling systems to be put in place. All too often, repairs are deferred because of over-scheduling.

The biggest challenge will be the same one for many years: Staff, from the office to technicians. I would suggest shops create a “hire young and train them” strategy, utilizing all training available through manufacturers, jobbers, associations and government programs.

The biggest opportunity for 2024 is perhaps all of the above. Here is something to think about: Many independent shops have closed in the past five years, Dealers don’t have the facilities to service every vehicle they sell and consumers are keeping their vehicles longer.  This all adds up to an increase in business.

Shops that have good management systems in place will see sales and profits go up.

The post CARS Executive Outlook 2024: Bruce Eccles appeared first on Auto Service World.

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In the sea of online shopping, be it on Amazon, eBay or parts retailer websites, automotive aftermarket parts companies need to find a way to have their products stand out.

A panel of industry experts gave some advice on how to do that.

“Just because I put a product that’s priced well on my website doesn’t mean it’s going to move, especially when it’s a marketplace,” observed Eric Lough, VP of customer experience at All Start Auto Parts, and moderator of the discussion, Scaling a Successful Omnichannel Strategy for the Automotive Aftermarket.

It starts with every touchpoint being a branded experience, said Will Stone, solution architect with Classy Llama, an e-commerce agency that works with the aftermarket.

It starts with messaging — anything that is driving traffic to your company or product has to have consistent messaging that fits in with the brand.

There should be user-generated content. Companies will want to showcase customers using their products. It can be them using a tool. “This helps share brand awareness and also have some sort of viral presence as well,” Stone said.

Post-sale is a key area many miss out on. Follow up with customers by email to make sure delivery went smoothly.

“How is the email speaking to your brand post-sale? Are you engaging with them in terms of what could you have done better? Asking for feedback: ‘Why did you buy from us versus your other options? That’s also something that I see I don’t see many retailers doing  — and they should.”

When they open the email, they should feel like they recognize your branding. There should also be awareness of the company’s social media handles in the communication. But just a simple note to follow you — explain how they can engage with the brand.

Don’t forget, reminded Johannes Crepon, CEO and co-founder of PDM Automotive, anyone can put your product on Amazon.

“And this is why we go ahead and say, ‘Well since you can’t prevent it, at least take control and take ownership,’” he said.

Amazon and other marketplaces allow you as the brand owner to control how your products are being presented.

“You can at least control how your products are being perceived even if you don’t sell it yourself,” Crepon added. “Again, it’s only about the discoverability of your product, and then also how it is being displayed.”

About half of all product searches start on Amazon, he pointed out.

“They should also get the right details and the reassurance that your brand is the brand that they want to buy, that it is a high quality product,” Crepon said.

The post Differentiating your products from the masses appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

James Channer, Co-founder, COO  |  In Motion Brands Inc.

The 2024 forecast signifies a shift after a positive run. As the market slowed down in late 2023, repair shop owners faced heightened consumer caution amid rising household debt and economic uncertainties. To foster business growth in 2024, repair shops must comprehensively assess all business practices, emphasizing heightened productivity and fortifying their competitive edge.

While facing the difficulty of increasing operating costs, repair shops should prioritize achieving high levels of operational excellence. Enhancing efficiency, optimizing processes and managing costs becomes crucial in navigating a softer market. This underscores the necessity for streamlined operations, delivering an exceptional customer experience and deploying effective digital strategies to sustain competitiveness in a dynamic market environment.

A robust digital strategy emerges as a linchpin for success in 2024 and beyond. According to AIA Canada, 45% of consumers discover repair shop providers through online searches. Recognizing the expectations of digitally savvy consumers, repair shop owners must invest in a robust digital presence, incorporating e-commerce capabilities, user-friendly interfaces and data-driven marketing approaches to attract and retain customers.

Treat the digital strategy with the same importance as a shop management system. Measuring key performance indicators and using reporting tools like Google Analytics and Google Search Console are crucial for monitoring digital KPIs and organic search performance. Proper setup and optimization of these tools are vital. Active collaboration with your digital marketing company can further enhance these reporting tools. Identifying collaborative partners in the industry will aid in navigating the evolving landscape and foster mutual growth in 2024.

The post CARS Executive Outlook 2024: James Channer appeared first on Auto Service World.

Shops are being urged to prepare for significantly changing vehicle technologies that will soon have significant chunks of the overall car parc. But what can they afford?

A shop debating between focusing on the electric vehicle market or being able to handle calibrations around advanced driver assistance systems might want to consider the cost of each. And according to advisory firm Roland Berger, setting up an ADAS-equipped shop can be one-third the cost of an EV-ready one.

EVs require significant investment and new infrastructure to get up and running — anywhere from about $140,000 to $280,000, the group estimated.

By comparison, to get ADAS-ready, a shop is looking at about $40,000 up to around $70,000.

It will be difficult for a shop to offer both services, experts advised.

“Put those two things together, it’s a lot of money for an average shop to be able to perform and become a true shop [of the future],” Neury Freitas, partner with Roland Berger,

To service EVs, shops need to invest in chargers first. Freitas recommended fast chargers to quickly have vehicles ready to go. There are infrastructure costs, such as installing transformers to handle the higher load. There is significant training required of staff. New tools and equipment will be needed, such as lifts that can handle the extra weight of an EV.

Another consideration Freitas pointed out, is the physical space available in shops. When removing the battery from an EV, it will take up the space of an entire bay, in addition to the bay the vehicle is currently in.

By comparison, to be an ADAS-equipped shop, it comes down to the tools, equipment and training.

Some shop owners may be shocked by the numbers. Roland Berger partnered with the Midwest Auto Care Alliance to ask shops how much they thought an investment in each space would cost. Four in 10 (42 per cent) expected investment to total between $14,000 and $28,000. About a third (32 per cent) said in the $70,000-$140,000 range.

On the ADAS side of things, estimations were closer to reality but still below. Sixty per cent of respondents estimated it would cost about $30,000-$55,000.

The post The high price tag of EV, ADAS shop upgrades appeared first on Auto Service World.

CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

J.F. Champagne, President  |  Automotive Industries Association of Canada

The combination of lingering inflation, high interest rate with labour shortage will be challenging for auto repair shops in order to continue to service their customers while remaining profitable. How to properly price their services to remain competitive while being limited by the on-going staff shortage will likely remain front of mind.

This year will also provide opportunities for auto repair shops who are looking to grow and expand as some business operators seek to retire and sell their operations.

Labour shortage will continue to be the No. 1 challenge for auto repair shops. Business owners and managers looking to attract and retain high performing employees will need to offer competitive compensation that includes benefits and flexibility in a positive working environment that takes into consideration the needs of new Canadians likely to fill these positions.

Organizations who will make meaningful changes in order to create an environment welcoming to women will likely benefit as well.

I believe there will be opportunities for acquisitions for auto repair shops looking for growth as business owners look to retire in an environment that remains challenging.

The post CARS Executive Outlook 2024: J.F. Champagne appeared first on Auto Service World.

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When it comes to vehicle miles travelled and gasoline consumption — and the need to have vehicles serviced by the automotive aftermarket — these factors are greatly influenced by consumers and drivers depending on their income bracket.

And it’s changing how retailers should think about what products they’re carrying on their shelves and the customers coming through their doors, according to Nathan Shipley, executive director of industry analysis in automotive at Circana.

Most people who don’t have to commute to work are generally higher-income earners. But they’re still racking up miles and kilometres on their odometers.

“It’s a higher-income consumer that is not having to go to an office. They’ve been untethered from their office and they’re able to work from anywhere,” he said at AAPEX 2023. “And so they’re taking road trips while still working.”

So even though that consumer isn’t heading into the office five days a week, they’re on the road more because they’re travelling. All that mileage is seeing them continue to go into their auto shop for service and maintenance.

And so their spending in the aftermarket is likely off-setting the lower-income households that are delaying vehicle maintenance.

“That higher-income consumer, I believe, will continue to help things coast along for the foreseeable future,” Shipley said during his seminar, Aftermarket Outlook 2024.

“The high-income consumer is the one that’s changed the most.”

Traditionally, it’s been the lower income, sub-$50,000 bracket households that used the aftermarket the most — people who couldn’t afford a new car and spent money on keeping their current one running. During the pandemic, that changed — higher-income households spent money in the aftermarket. Reasons vary from low new supply reducing their options at the dealership to taking money they typically spent on vacations to instead put towards their current vehicle.

“And if you asked me maybe one year, two years ago, I would have guessed this is not going to sustain,” Shipley said. “People are going to start buying new cars again and they’re going to be back in offices. They’re not going to be working on their cars. And that is not what’s actually taking place.”

So in what Shipley called an “interesting trend,” it’s the $100,000-plus income group that’s the top contributor to units sold in the aftermarket.

The last few years have been headlined by people buying recreational vehicles, jet skis, snowmobiles and the like. “That drives DIY behaviour. But it’s that consumer that has more time on their hands,” Shipley explained. “Maybe they owned a car during the pandemic that was under warranty — it was going back and forth for oil changes [while] under warranty — and all that expired. Now the car’s four or five years old and they’re not going back to replace it.

And they figure that since they have more time on their hands, they’ll DIY some things.

“So it starts to have implications on: Who’s in stores, what products are sitting on the shelves, how are we promoting our products in store?” Shipley explained. That’s a change from previously targeting the lower-income consumer. “But now it’s this higher-income consumer that they approach spending differently. It changes how you go to market as a brand or as a retailer.”

The post The effect of higher income customers on the aftermarket appeared first on Auto Service World.

We are well into the first quarter of the year and hopefully everyone is hitting their goals. You have set goals, right?

If not, it’s never too late to sit down and start thinking about where you want this year to go and how you are going to get there. Before my shop opened for the new year, my manager and I sat down to decide what goals we were going to shoot for in a few different categories: Sales, client experience, training and leadership.

We first decided what our weekly sales goals would be based on available technician hours, labour mix and parts margin. These three important KPIs are monitored daily to ensure that the business is making the most out of every day and every vehicle. If we sell all our available hours, ensure our labour mix is 50-55 per cent and parts margin is 55-60 per cent, we’ve had a profitable day.

Once we determined the sales goal that we wanted to achieve, our next step was to figure out how we would get there.

First, having happy, engaged clients who believe in maintaining their vehicle are key to making this happen. Our client communication is excellent and is mentioned the most in our five-star reviews.

Over the years, we have left little gifts for our clients in their vehicles — branded coffee mugs, pens and gift cards to other local businesses. This year, we have decided to partner with a local nut-free bakery, which provides us with chocolate chip cookies. These cookies are placed in the client’s vehicle with a ‘thank you’ sticker, as a small token of our appreciation for the trust they put in us.

Second, we believe that the way to accomplish our goals is by engaging in ongoing training for each member of our team. The technicians and service advisors use an online training program, which feeds them daily training. This is curated for each person based on their skill level to provide them with guidance in areas where they are weaker. This helps them gain confidence in their roles, which ultimately helps the team accomplish what we’ve set out to achieve.

If not, it’s never too late to sit down and start thinking about where you want this year to go and how you are going to get there.

Our additional training goals will be to find higher-level technician training for our A-techs and high-level management training for my me and my manager.

Last, our leadership goals. The University of Regina offers leadership classes for business owners and their staff, which we will be enrolling in this year. By having our staff to gain this type of knowledge, it will not only help them professionally, but they will develop the skills needed to be leaders in their homes and the communities they live in.

We have also decided that if our staff want to be leaders in their professional roles, we need to include them in our strategic plans for the business in a more structured and organized way. We have staff meetings to talk about sales and operational plans, but we wanted to create the opportunity to build a culture of intention and purpose.

We have started “Kinetic Coffee Talk Tuesday” (we run a four-day workweek, so Tuesday is the beginning of our week), a 15-minute meeting where we talk about our intentions for the week, discuss personal and professional goals and share with the group our “Song of the Week”. This song is chosen by a different team member every week as their personal anthem, which is played at the beginning of the meeting for everyone to listen to (yes, this is as awkward as it sounds, but it’s fun-awkward). Their song choice tells us who they are, what they value and how they’re going to show up for the team that week.

(We hope a team member never chooses “Unloved” by Jann Arden; we want everyone to feel loved in our shop.)

By setting goals and sharing our wins, we can start the week in a positive upbeat way, allowing us to aim for the same targets and build strong relationships with each other.

You still have lots of time to make your own goals for the year, so if you haven’t sat down and written them out, personal or professional, please take the time to do so and you, too, can start every day with intention.

Erin Vaughan is the owner of Kinetic Auto Service in Regina

This article originally appeared in the February issue of CARS

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CARS reached out to leaders in the automotive repair and service sector of the automotive aftermarket to ask them about their thoughts about the industry over the next 12 months. We wanted to know how things will change this year, what’s the biggest challenge and how they can seize the biggest opportunity. We will present their answers in alphabetical order over the coming weeks…

You can view the full feature in the February 2024 issue.

Greg Aguilera, Director  |  IAC Canada

In 2024, there will be two major factors independent repair shops will need to contend with. Firstly, the normalizing of supply of new vehicles in dealers. This means that the likelihood of people buying a new car will increase, therefore customers repairing older cars may decline. Secondly, the mainstream plug-in hybrid vehicles of the first generation are now coming off emissions warranty so these will come in more often now for repair — not just servicing.

The challenge this year for shops is going to be attracting, retaining and training staff. Although we all are in the same situation from a market perspective, shops that develop a clear sense of vision and direction will be able to build a business that people want to be a part of and remain with.

The biggest opportunity for shops to grow is to capitalize on the work that is left on the table by those shops not investing in the future or admitting the change that is now at our doorstep.

As our industry evolves more quickly than ever before, it’s time to separate the leaders from those who are not willing to invest in themselves or their business in equal measure.

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Canadians are feeling the pinch when it comes to the economy and keeping more money in their pockets rather than spending it.

With many costs rising — led by increasing mortgage rates — Canadians are preferring not to dip into the savings they accumulated over the COVID-19 pandemic.

“So I think we are starting to see some pullback on the consumer side of things,” said Thomas Feltmate, senior economist at TD Bank, at the Canadian Black Book Talk Auto 2023 conference near Toronto. “This is exactly what the Bank of Canada ultimately wants to see. We need to see weaker consumer spending over the next year or so such that we have further disinflationary pressure coming through.”

Watching their dollars is something Lenny Levac, Canadian sales director Canada from Liqui Moly, has noticed.

“Customers do have finances top of mind here in Canada,” he told CARS. “With costs continuing to rise in so many aspects in Canada, we need the most value we can find out of the products we purchase.”

But that also means routine maintenance is being ignored, deferring work and setting themselves up for larger bills down the road. “In the past, most would have gone ahead with the recommended work,” Levac said.

However, oil services have not been ignored. “It’s still one of the most important services that can be done to keep your investment in good order,” he added. “With so many of us using our vehicles to go to work, pick up the kids, hockey, soccer, life, we can’t afford to not change the oil. It’s what powers where you go.”

Sean Nguyen, Pennzoil’s technical scientist and automotive lubricant specialist. agreed. “While consumers may be tempted to extend their drain intervals to stretch their buying dollars, we advise against it.”

He notes that premium products can better protect vehicles from larger repair bills down the road.

“Shop owners need to have available synthetic high-mileage oils available for these high-mileage vehicles.”

That makes the relationship between shop and supplier important. Levac encourages their shop partners to continue engaging with them to ensure their needs are being met.

“The relationship between us and our customers and partners is so profound and sustainable that we only need to continue on the right path to be successful,” he said.

The relationship is built on trust. Shops rely on suppliers providing them with innovative products to better serve customers as their needs evolve.

“The messaging we have consistently delivered over the years reaffirms our commitment to being a brand our partners can rely on,” Nguyen said.

And if shops don’t know where to look to keep up with what consumer behaviour changes may impact their business, they can turn to their supplier partners.

“We are proactively engaging with automotive technicians and shop owners, offering educational resources, and providing product suggestions to support informed decision-making and meet customer needs,” Nguyen said.

For example, consumers are holding on to their vehicles longer than normal.

“Thus, they are accumulating more miles in these vehicles. Shop owners need to have available synthetic high-mileage oils available for these high-mileage vehicles,” Nguyen said.

This article originally appeared in the February issue of CARS

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