Dealerships Losing Ground to Independent Auto Repair Shops, Study Finds

Dealership service centers are still the top provider, but their share of visits dropped from 35% in 2021 to 30% in 2023.


New Cox Automotive research revealed franchised dealerships in the U.S. are losing service market share to general repair shops, despite remaining the top service provider.

The detailed report, "Under the Hood: Opportunities and Challenges in the Service Industry," showed dealerships, while still leading, have seen their share of service visits drop from 35% in 2021 to 30% in 2023.

This trend emerges as the auto care industry in the U.S. market is expected to surpass $400 billion in consumer spending. Post-pandemic, vehicle owners are reportedly driving more and prolonging their existing vehicles' usage, influenced by high prices and loan rates for new vehicles. Consequently, service centers are witnessing more frequent visits, with the average vehicle owner bringing in their car 2.5 times in 2023, up from 2.3 in 2021.

Vanessa Ton, senior manager of market and customer research at Cox Automotive, emphasized the service business's crucial role in dealership operations. Despite the challenges outlined in the report, she noted the industry's growth and increased customer service visits, boosting most providers' service revenue.

The Cox Automotive service study, conducted in the latter half of 2023, involved surveying 2,493 vehicle owners, including 182 EV owners, who had at least one service in the past year, accounting for more than 5,500 service visits. Additionally, 525 franchised dealers with decision-making authority over fixed operations were interviewed.

A shift in consumer preference was observed, with 33% of owners favoring general repair shops over dealers for the first time, up from 32% in 2021. Trust in franchised dealer service has waned, with only 54% citing trust as a reason to return, down from 62% in 2021.

Cost concerns, exacerbated by inflation, have impacted service decisions. The study reported a 45% increase in the average price per service visit since 2021. However, dealership service costs, averaging $258 per visit, are largely comparable to non-dealer providers at $249, challenging the perception of dealerships being more expensive.

Dealerships are also preparing for a surge in electric vehicle services, with 71% adding technicians with high-voltage training and certifications. Despite this, many dealers feel the need for more trained staff and infrastructure to adequately service EVs.

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