United States Automotive Service Market - Growth, Trends, Covid-19 Impact, and Forecast (2023 - 2028)

United States Automotive Service Market - Growth, Trends, Covid-19 Impact, and Forecast (2023 - 2028)

United States automotive service market was valued at USD 172.12 billion and is expected to reach USD 276.49 billion, registering a CAGR of around 8.22% during the forecast period.

The COVID-19 pandemic compelled about 95% of all automotive-related companies to put their workforces on hold during the lockdowns in the year 2020. However, United States witnessed a lockdown for only a few weeks compared to other countries worldwide. Therefore, the COVID-19 pandemic slightly impacted the growth of the automotive service market during the pandemic.

Over the long term, automotive service companies are increasingly using artificial intelligence-based automated vehicle inspection technology for vehicle inspection to widen their customer base. For instance,

• In February 2022, Scope technology, a US-based tech firm, collaborated with Microsoft's Azure cloud computation to develop AI-automated vehicle inspection technology. This visual inspection takes less than 5 minutes and saves 50% on costs.

However, the increasing penetration of electric vehicles in United States will significantly impact the market growth. The widespread use of electric vehicles can be attributed to government initiatives and support for improving environmental quality to reduce reliance on crude oil. The repair and maintenance costs of battery-powered vehicles are expected to be lower than those of ICE vehicles. Industry participants will gain a competitive advantage by making their products and operations more sustainable.

Furthermore, various factors, such as the increase in average vehicle age due to technological advancements, the increase in average miles driven per vehicle, and the surge in people's road safety awareness, are likely to fuel the growth of the automotive service market. Furthermore, increased used car sales present numerous opportunities for key players in the US automotive service market. For instance,

• In May 2022, the average age of automobiles in United States was 12.1 years, a slight increase from the previous year's figure of 11.9 years.

Based on the aforementioned points, the target market is expected to grow considerably over the upcoming time period.

The market for electric vehicles is growing every year, helping the automotive industry. Electric-drive vehicles (EDV) currently available in the US market include hybrid electric vehicles (HEV), battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), and fuel cell electric vehicles. In United States, 85,920 plug-in vehicles (70,443 BEVs and 15,477 PHEVs) were sold in October 2022, a 41.4% increase over October 2021 sales. In 2022, a total of 736,776 PHEVs and BEVs were sold. Thus, opening new opportunities for players in the US automotive service market.

Electric vehicle demand opens up opportunities for OEMs, aftermarket parts and component manufacturers, tire manufacturers, and other industry supply chain players. As a result, as electric vehicles become more affordable, IC engine vehicle parts and components service centers expand into them. Major key players are also coming up and investing in developing such vehicles due to a surge in demand. For instance,

• In April 2022, Tesla, Inc. proposed constructing a 100,000-square-foot facility in St. Pete, Florida. The new Tesla center will handle sales, service, and deliveries in the area. The new Tesla facility will be built on a 4.21-acre plot that houses a 100,000-square-foot Kanes Furniture liquidation center.

Such increases in electric vehicle sales and production are expected to drive market growth during the forecast period.

Although passenger car sales have been declining in the country since 2021, commercial vehicle sales have been increasing year on year since the post-recession period. One of the reasons for the growth is a shift in consumer preference in United States toward pick-up trucks that can transport both cargo and passengers. For instance,

• In 2021, Around 12 million commercial vehicles were sold, up from approximately 11.5 million units reported in 2020. This vehicle includes motor vehicles used for transporting goods or paying passengers.

Commercial vehicles like medium and heavy-duty trucks typically travel farther than passenger cars. As a result, they frequently require maintenance. Due to the large distances traveled in a relatively short period, their part and component maintenance and the replacement cycle are also more frequent. For instance,

• The average age of commercial trucks in United States was 12.8 years in 2008 and 14.2 years in 2021. Truck aging can be attributed to various factors, including truck population growth, trade packages, and fuel trends.

Engine oils, brake and transmission fluids, air filters, brake pads, and other common parts are depleted faster. After the warranty period, most vehicle owners seek the services of aftermarket garages or workshops. Furthermore, because most commercial vehicles run on diesel, they require more service than their gasoline counterparts. A single filter or a combination of primary and secondary filters is used to purify diesel. Depending on the vehicle's build and variant, these filters must be replaced regularly. Over the forecast period, this is expected to drive the market for this type of vehicle.

As the electric vehicle era has started, most logistic companies focus on adding commercial electric vehicles to their fleet to deliver goods. For instance,

• In July 2022, Amazon and Rivian intended to deploy thousands of custom electric delivery vehicles in over 100 cities by the end of 2022, increasing to 100,000 by 2030.
• In January 2022, Walmart Inc. reserved 5,000 electric vans from General Motors' BrightDrop subsidiary to support the retailer's expanding e-commerce delivery operations.

United States automotive service market is fragmented with market players, such as Firestone Complete Auto Care, Jiffy Lube International, Inc., Meineke Car Care Centers, LLC., Midas International, LLC, MONRO, INC., and Safelite Group, who hold the most significant shares. Companies are making joint ventures, partnerships, and launching new products with advanced technology to have the edge over their competitors. For instance,

• In January 2021, Jiffy Lube International, Inc. continued its focus on expanding its footprint by establishing more than 2,081 franchisee-owned service centers across North America. 45 new Jiffy Lube International, Inc. service centers were opened in United States.

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