Guest Blog: Leveraging emerging industry trends in 2024

Feb. 8, 2024
Tekmetric takes a look at emerging industry trends in 2024 and how repair shops can take advantage of them.

Independent auto repair shops have a unique opportunity in 2024 to take advantage of the latest industry trends by using the right tools for the job. Last year, we witnessed a surge of innovation and growth within the automotive repair industry, setting the stage for new opportunities and challenges ahead. In fact, there are several trends that emerged in 2023 that can make the difference between surviving and thriving: applying growth-oriented strategies, implementing efficient data usage and employing modern solutions. Shops that recognize these trends and implement the right tools and strategies accordingly are setting themselves up for success in 2024. 

Apply growth-oriented strategies

Despite the looming threat of a recession, the auto repair industry has witnessed remarkable growth with customers increasingly opting to repair their existing vehicles instead of purchasing new ones. In 2022, the industry defied economic uncertainties, experiencing a notable revenue surge of 9.7 percent with an anticipated additional growth of 8.1 percent in 2023. This trend presents a unique opportunity for auto repair shop owners to expand their businesses – especially with the use of a comprehensive shop management system. 

Shop management systems have played a significant role in driving the industry’s upward trajectory, reporting a noteworthy 6.35 percent increase in vehicles serviced. Furthermore, an impressive 80 percent of open repair orders within shops that use a shop management system were completed and promptly paid in full. The efficacy of shop management system tools is further underscored by users experiencing a robust average profit margin of 55.86 percent and an Average Repair Order (ARO) of $585.91. These trends highlight the potential for auto repair businesses to thrive and expand by leveraging insights and functionalities from a comprehensive shop management system.  

Maximize value with efficient data use

Efficient data utilization is imperative for maximizing the value derived from a shop’s operations. By embracing insights gleaned from a comprehensive system, shops can not only augment their operational efficiency but also position themselves for sustained growth and success in a competitive market. 

A notable avenue for leveraging data is through the strategic implementation of unique matrices. This optimization not only bolsters the shop’s bottom line but also underscores the potential for shops to enhance profitability through streamlined processes significantly. In 2023, shops that adopted this practice with their parts matrices experienced a noteworthy 35 percent profit margin on parts. Furthermore, approximately 45 percent of shops utilized labor matrices to set varying labor rates, resulting in an average hourly technician rate of $27.26. This rate surpasses the national average reported in 2023 by 19 percent, showcasing the efficacy of adopting matrices in labor management. 

Such deliberate utilization of matrices enables shops to tailor pricing structures based on factors such as job type, expertise, specialization or customer requirements, thereby optimizing profitability and operational efficiency. 

Meet customer needs with modern solutions

To meet the evolving demands of modern customers, auto repair shops must embrace contemporary solutions such as cloud-based shop management systems. Modern customers harbor high expectations regarding transparency and reliability from auto repair shops. Cloud-based shop management systems offer a seamless avenue for meeting these expectations, providing a platform for enhanced communication and transparency throughout the repair process. 

Digital tools like shop management systems empower customers to make informed decisions about necessary repairs and maintenance, bolstering their confidence in the shop’s expertise and recommendations. For example, by tracking declined repairs and providing detailed findings directly to customers via text messages rather than paper-based reports, shops can ensure transparency and build trust with their clientele. 

Digital vehicle inspection software also emerges as a pivotal tool for the modern shop, revolutionizing the way the shop interacts with customers and addresses vehicle concerns. Leveraging digital vehicle inspections allows technicians to showcase vehicle issues with unprecedented clarity. Unlike traditional paper-based approaches, digital vehicle inspections enable technicians to highlight existing and potential future issues with visual evidence, fostering greater customer understanding and trust. It also facilitates comprehensive communication by enabling technicians to attach pictures and videos directly to inspection reports. 

Remaining poised for growth in 2024

The automotive repair industry is poised for significant growth and innovation in 2024, presenting independent auto repair shops with a myriad of opportunities to capitalize on emerging trends. Despite economic uncertainties, the industry has demonstrated resilience, with customers increasingly opting for vehicle repairs over new purchases. 

Shop management systems have played a pivotal role in driving this growth, enabling shop owners to enhance operational efficiency and profitability through strategic data utilization. The convergence of technology and customer-centric solutions presents a transformative opportunity for auto repair shops in 2024. By embracing innovation and leveraging modern tools, shops can navigate challenges, capitalize on emerging trends and foster sustainable growth in the competitive automotive repair industry. 

For more information on emerging industry trends and how shop management systems can support the modern shop, check out the Industry Index Report by Tekmetric.  

Information provided by Tekmetric.

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