More than 6,000 repair outlets closed during 2020

Independent repair shops shouldered most of the loss compared to dealership service outlets

Fort Wayne, Ind.—The population mix of repair outlets across the U.S. has been significantly altered by the impact of COVID-19, according to a new report. During 2020, it has been estimated that more than 6,000 repair outlets closed, with independent (non-dealership) outlets suffering most of this loss.

“As a result, the competitive positioning of Independent outlets versus Dealers has eroded in the car and light truck aftermarket across the U.S.,” it was stated in the 2022 Lang Aftermarket Annual.

Two major groups of independent repair outlets suffered the brunt of an expanding dealership DIFM surge: independents and tire stores. COVID-19 has disproportionately affected the independent share of aftermarket product sales of these two groups of outlets, particularly service and repair shops.

The refurbishing of used vehicles by dealerships (particularly nameplates they do not sell new) and the expansion of dealership bay business to all makes and years has increased the opportunity for aftermarket distribution channels to increase their product sales to dealerships.

From a historical perspective, independent service and repair outlets had witnessed a 20-year decline in aftermarket share prior to the 2008 economic downtown, according to the report, and bottomed out at 72.7 percent of 2007 DIFM product volume.

Its share of product volume began to rebound in 2008, though, eventually reaching 79 percent of 2014 DIFM product volume. Dealerships, however, had regrouped by 2015 and had begun to expand market share by embracing a “new set of service bay strategies that included repairing all-makes and all-years of vehicles. They have coupled this with making their service bays more convenient and price competitive,” reported the analysis.

The result was that dealership DIFM light vehicle market share began to climb in 2015, with Lang estimating that dealership share topped 22 percent in 2020. COVID-19, in contrast to the 2008 economic downturn, caused the disproportionate closing of independent repair outlets.

Moving forward, states the report, this will help to strengthen the competitive DIFM positioning of dealerships.