In the fast lane of automotive technology, 2023 has been a year full of innovation and growth for the automotive repair industry.
As 2023 winds down, it's a great time to reflect on the strides made across the independent auto repair industry.
Throughout the year, we’ve been collecting data, talking to shops that rely on Tekmetric every day, and gaining valuable insight into how your shop can prepare for the best year possible in 2024.
That’s why we released our latest Industry Index Report earlier this year, to give shops and industry resources to not only compare their performance against other shops but also some concrete tips and tricks they can implement at their shop.
This comprehensive analysis not only assesses the industry's vitality but also seamlessly integrates unique Tekmetric’s partner shop data, presenting a goldmine of opportunities for optimizing shop management.
The result is a compelling narrative that provides a bird's-eye view of auto repair in 2023 and delves into Tekmetric-specific data, to offer shops like yours the actionable insights you need for success in 2024.
Here’s how shops can take advantage of these trends in 2024.
Set your shop up for success in the New Year with the right tools for the job.
1. Ride the Wave of Industry Growth with the Right Tools For The Job
Despite the looming threat of a recession, the auto repair industry has expanded as customers choose to repair their existing vehicles rather than purchasing new.
This presents an opportunity for shop owners to ride the wave of industry growth and expand their businesses – with the right tools for the job.
In 2022, the auto repair industry defied economic uncertainties, witnessing a remarkable revenue surge of 9.7%, and the momentum continues with an anticipated additional growth of 8.1% in 2023.
Tekmetric shops in particular have been at the forefront of this upward trajectory, reporting a notable 6.35% increase in cars occupying their bays. Furthermore, a staggering 80% of open repair orders within Tekmetric shops were not only completed but also promptly paid in full.
As a testament to the efficacy of Tekmetric tools, users also experienced a robust 55.86% average profit margin, coupled with an impressive $585.91 Average Repair Order (ARO).
These trends underscore the potential for auto repair businesses to not just weather economic challenges, but to thrive and expand by leveraging insights and functionalities from a shop management system like Tekmetric.
2. Get More Value Out of The Work Your Shop Does
Maximizing efficiency through data is the key to unlocking the full value of a shop’s work.
One notable avenue is the strategic use of unique matrices. In 2023, shops that adopted this practice with their parts matrices experienced a 35% profit margin on parts.
This optimization not only enhances the shop’s bottom line but also underscores the potential for shops to boost their profitability through streamlined processes significantly.
Moreover, approximately 45% of shops used labor matrices to set varying labor rates, culminating in an average hourly technician rate of $27.26. This rate stands notably higher – 19% to be precise – than the national average reported in 2023.
Adopting these matrices demonstrates an intentional approach to labor management, allowing shops to tailor their pricing structures based on factors such as job type, expertise, specialization, or customer requirements.
3. Meet Customer Demands with Modern Solutions
Modern customers have modern expectations. That's exactly where modern solutions like a cloud-based shop management system come in.
Take Advantage of Digital Inspections and Tools
We've heard it time and time again, customers may not always trust auto repair shops and might feel a little weary approving costly repair bills, no matter how necessary they might be. Of course, this not only means a declined job for your shop, but more importantly, at best an even more costly repair down the line, or at worst a potentially dangerous situation on the road.
That's why your shop needs to work to build that trust with customers. When they feel that your shop is on their side offering valuable advice and transparency regarding necessary repairs, they'll be more likely to approve those repairs.
Shops should also consider texting their guests. We get text updates from our doctor's office or for our pizza delivery, so why shouldn't shops text their customers as well?
The convenience makes it easier for your shop, who can text directly from your SMS, while customers don't have to wait for a free minute to answer your call or authorize repairs -- that can all be done instantly, in real-time, through texts.
Prepare For the Year Ahead
Tekmetric's 2023 Industry Index Report serves as a beacon for auto repair shops, guiding them toward growth, profitability, and enhanced customer experiences in the dynamic landscape of the industry.
In fact, it’s more than a just report – it's a guide for shop owners looking to create a business that thrives in the next year and beyond.
Download the report now and unlock a roadmap to success, powered by data, innovation, and Tekmetric's commitment to shaping the future of the auto repair industry.