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Industry Overview
The automotive industry includes mechanical repair, collision repair, car washes, and lube or oil changes. This industry’s demand is dependent upon car usage and the number of cars on the road. Profitability of individual companies can be shaped by the convenience of their location and the strength of their marketing. Typically, large companies can maximize use of more expensive equipment and can easily leverage advantages in marketing. On the other hand, smaller companies can compete by providing superior customer service or by offering specialized services. Industry competition includes venues that also provide automotive services, including gas stations, car dealerships or some branches of chain stores, like Wal-Mart. Promotional channels in this industry typically include phone directories, signage, local newspaper ads, direct mail, TV and radio.
Business Challenges
The complexity of the various types of purchases in the automotive industry – from the point of sale to ongoing annual maintenance – also shapes the complex challenges of the industry.
- Competition From Car Dealers: The sales department is often much less profitable than the parts and service centers of car dealerships. And to compensate for inconvenient locations, many dealers will offer evening and weekend hours. Additionally, if dealerships offer initial warranty services to a consumer’s satisfaction, there is an increased chance that more customers will return for maintenance and repair services even after warranties expire.
- Public Mistrust: Because of the complexity of cars, consumers are unable to easily judge whether they have been treated fairly by a repair shop. Polls indicate that a high percentage of consumers believe that repair shops overcharge, perform unnecessary repairs, or use inferior parts.
- Growing Car Complexity: As cars become more technologically complex, maintenance and repair services have followed suit and have become more difficult and expensive. There is a stronger need for shops to invest in special diagnostic equipment and tools to perform repairs to advanced systems. Service technicians also require additional training to work on the latest car models.
Industry Opportunities
The opportunities in this industry directly reflect the growing trends and desires of consumers, as well as the variety of technological advancements in everyday vehicles.
- Alliances with Car Dealers: Often, owners of expensive cars are more likely to prefer using the service department at their car dealer. By allying with a car dealership, local repair shops can be referred new business from a dealership in exchange for purchasing auto parts from the dealer. Collision repair in particular is a key opportunity for shops because an increasing number of dealerships are opting out of offering body shop services.
- Servicing Non-Traditional Vehicles: Growing sales of fuel-efficient vehicles – like hybrids, electric cars, and cars that operate on alternative fuels – have increased the demand for specialized repair services. Additionally, some consumers may require restoration, custom paint jobs, “retro” engine parts or special attention. Auto repair shops can leverage such needs and create a niche by developing expertise in non-traditional or specialized vehicles. Non-traditional vehicle owners tend to be passionate about their cars and are much more likely to spend more money to maintain them.
- Service for Car Electronics: In recent years there has been a proliferation in electronic devices in cars. This includes cell phones, CD players, MP3 players, navigation systems, video systems and Internet access devices. Naturally, this provides greater opportunities for shops that develop expertise with these systems.
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Digital Marketing Trends
- Advertising Spending Increase
- Traffic to Automotive Retail Websites
- Purpose of Visiting Automotive Retail Websites
- Automotive Mobile Websites
- Consumers Use Social Media to Research Vehicles
Digital Marketing Opportunities
- Immediate Areas of Focus for Social and Mobile
- Popular Pay-Per-Click Keywords
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