United States Automotive Service Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

United States Automotive Service Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The United States automotive service market was valued at USD 63 billion in 2020, and it is expected to reach USD 75 billion by 2026, registering a CAGR of around 3% during the forecast period (2021 - 2026).

The impact of the COVID-19 pandemic is inevitable on any industry and is almost visible with varied short-term and long-term effects on the market. The impact of COVID-19 on the US Automotive service market is mild, and this can be attributed to the service-based model of the market. Although several production halts hammered the overall supply chain of the entire automotive industry, the impact on automotive service providers remained unchanged.

Some automotive service companies are increasingly using artificial intelligence-based automated vehicle inspection technology for vehicle inspection to widen the customer base. For instance, Scope technology, a US-based tech company, has developed an AI automated vehicle inspection technology in collaboration with Microsoft’s Azure cloud computation. This entire visual inspection process is completed in less than 5 minutes and reduces costs by 50%.

Additionally, various factors, such as the rise in the average age of vehicles due to technological advancements, rise in the average miles driven per vehicle, and surge in road safety awareness in people, are likely to fuel the growth of the automotive service market. Furthermore, an increase in the sales of used cars creates numerous opportunities for key players operating in the US automotive service market.

Key Market TrendsNew Opportunities in the Electric Vehicles Market

The market for electric vehicles is increasing Y-o-Y, impacting the growth of the automotive industry. The annual sales of plug-in electric cars crossed the 400 thousand mark in 2019, gathering more than 1% of the United States' overall vehicle sales share. Although the adoption of electric vehicles is still in its early stages, long-term projections show a rapid increase, globally.

According to the International Energy Agency (IEA), the number of electric vehicles (EVs) is likely to grow up to 125 million in 2030 from just 3.1 million in 2017. The electric vehicle demand creates newer opportunities for the OEMs, aftermarkets, tire manufacturers, and the supply chain industry. As a result, IC engine vehicle parts and components services centers expand into electric vehicles as electric vehicles become more accessible.

In August 2019, Tesla opened 25 new service centers and added 100 new service vehicles to its existing fleet. Currently, Tesla is establishing more auto service centers. The recent locations include a showroom in London's posh Westfield shopping center, Warwick, Rhode Island, and an upgraded showroom in Santa Monica near its current store location.

Growing Demand for Commercial Vehicles Likely to Drive Market

Although the sale of passenger cars has been declining in the country since 2018, commercial vehicles continued to record a Y-o-Y increase in sales since the post-recession period. The shifting consumer preference in the United States to pick-up trucks that can transport both cargo and passengers is one of the reasons behind the growth.

Commercial vehicles like medium and heavy-duty trucks tend to cover more miles on average than passenger cars. Hence, they often require servicing. Even their part and component maintenance & replacement cycle is more frequent due to high distances traveled in a relatively short period.

Common parts, like engine oils, brake and transmission fluids, air filters, brake pads, etc., are consumed faster. Most vehicle owners tend to reach out to aftermarket garages or workshops for these kinds of jobs after the warranty period. Additionally, since most commercial vehicles run on diesel, they require even more service than their petrol counterparts. For instance, most petrol vehicles nowadays come with a non-serviceable fuel filter and can go on even without a filter replacement during their lifetime.

But purification of diesel is done using either a single filter or a combination of primary and secondary filters. These filters need to be replaced at regular intervals based on the build and variant of vehicles. This is expected to drive the market for this class of vehicles over the forecast period.

Competitive Landscape

The United States automotive service market is fragmented with the presence of market players, such as Firestone Complete Auto Care, Jiffy Lube, Meineke, Midas, Monro Muffler Brake, and Safelite Group, who hold the most significant shares. In order to have the edge over their competitors' companies are making joint ventures, partnerships, launching new products with advanced technology. For instance,

• In August 2020, Asbury Automotive Group Inc. completed the acquisition of Park Place Dealerships worth USD 1.7 billion approximately to increase its brand portfolio among the luxury segments of vehicles across the United States.
• Jiffy Lube continues its focus on expanding the brand’s footprint by establishing more than 2,081 franchisee-owned service centers across North America. 45 new Jiffy Lube service centers were opened in the U.S. in January 2017, by expanding into new markets and growing communities.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Firestone Complete Auto Care
Jiffy Lube
Meineke
Midas
Monro Muffler Brake
Safelite Group
Walmart
Sears Auto
Pep Boys

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