Auto Service
Focus on Auto Service
Aftermarket biz up in slow economy
WASHINGTON -- The International Franchise Association (IFA) anticipates a continued slowdown in economic recovery, with minimal growth in the franchising market.
"As the economic recovery continues at a slow pace, business conditions for small businesses are not improving. The availability of credit remains an issue," according to the revised "Franchise Business Economic Outlook: May 2012" produced by IHS Global Insight for the IFA Educational Foundation.
"Consumers still face too many negatives to allow a robust spending recovery -- high debt burdens, house prices that have not yet hit bottom, price increases that have outpaced wage growth and a lack of confidence in the government's ability to make things better. Overall, we expect consumerspending growth of 2.2 percent in 2012 -- the same growth as in 2011 and not a powerful driver of recovery," according to the report.
However, the auto repair franchise market is faring better than other segments.
"The auto market, especially the aftermarket, has done pretty well when it comes to consumer spending because consumers have been spendingmore to fix up their cars and buying new cars," said Alisa Harrison, IFA senior vice president of communications.
Consumer spending on auto parts and accessories grew 4 percent in 2010 and 3 percent in 2011 as vehicle miles traveled increased and the vehicle fleet aged. Economic conditions prompted vehicle owners to keep their cars longer, boosting activity at auto supply stores and car repair and maintenance businesses, according to the report.
The report acknowledged that light vehicle sales are continuing to recover to pre-recession levels, with
2011 sales rising to 12.7 million units. That was an improvement over 2010 but still below pre-recession levels that averaged about 16 million. 2012 vehicle sales are expected to hit 14.3 million units, according to the report, an increase of 12 percent.
"As more new cars
Aftermarket biz up in slow economy
WASHINGTON -- The International Franchise Association (IFA) anticipates a continued slowdown in economic recovery, with minimal growth in the franchising market.
"As the economic recovery continues at a slow pace, business conditions for small businesses are not improving. The availability of credit remains an issue," according to the revised "Franchise Business Economic Outlook: May 2012" produced by IHS Global Insight for the IFA Educational Foundation.
"Consumers still face too many negatives to allow a robust spending recovery -- high debt burdens, house prices that have not yet hit bottom, price increases that have outpaced wage growth and a lack of confidence in the government's ability to make things better. Overall, we expect consumerspending growth of 2.2 percent in 2012 -- the same growth as in 2011 and not a powerful driver of recovery," according to the report.
However, the auto repair franchise market is faring better than other segments.
"The auto market, especially the aftermarket, has done pretty well when it comes to consumer spending because consumers have been spendingmore to fix up their cars and buying new cars," said Alisa Harrison, IFA senior vice president of communications.
Consumer spending on auto parts and accessories grew 4 percent in 2010 and 3 percent in 2011 as vehicle miles traveled increased and the vehicle fleet aged. Economic conditions prompted vehicle owners to keep their cars longer, boosting activity at auto supply stores and car repair and maintenance businesses, according to the report.
The report acknowledged that light vehicle sales are continuing to recover to pre-recession levels, with
2011 sales rising to 12.7 million units. That was an improvement over 2010 but still below pre-recession levels that averaged about 16 million. 2012 vehicle sales are expected to hit 14.3 million units, according to the report, an increase of 12 percent.
"As more new cars