Profits are soaring at auto repair businesses. While many small businesses are struggling to stay afloat during this unprecedented time, Moran Family of Brands is thriving and offers great investment opportunities for entrepreneurs in the aftermarket auto industry.
The outbreak of the pandemic sent small businesses into a tailspin. Many were forced to temporarily close their doors to comply with stay-at-home orders. Others had to implement capacity limits and new safety protocols to keep their employees and customers safe. In any given year, approximately 600,000 businesses are forced to throw in the towel and permanently close, Business Insider revealed. The Federal Reserve estimates 200,000 extra businesses closed their doors permanently by the end of 2020.
Despite grim numbers, many sectors of the economy flourished. Discount retailers, cleaning services, home improvement providers, healthcare services, and repair and maintenance businesses performed well in 2020. These markets are continuing to offer pandemic-resistant investments for entrepreneurs. Automotive franchises remain an essential service for consumers as the economy rebounds. Current events, consumer spending trends, and supply chain issues are sending profits at auto repair franchises up. Here are a few of the reasons auto repair franchises are thriving.
- Car Costs are Rising. The price of both new and used vehicles is hitting record highs. Higher than normal raw material costs and chip shortages are making it more expensive for manufacturers to build vehicles. Dealerships are raising price tags to transfer the costs to car buyers. A report from Cox Automotive indicated vehicle affordability is trending down. The number of median weeks of income needed to purchase a new vehicle increased to 33.8 weeks in April from 32.4 weeks in March.
Customers searching for relief from high new car prices are not finding it in the used-car lot. The average transaction price for used vehicles climbed to $25,410 in the second quarter of 2021, compared with $22,977 the first quarter, marking the highest quarterly price on record, reported Edmunds, an online resource for car buyers.
“This is not a buying environment for people on the fringe of being able to afford new car ownership," said Jessica Caldwell, Edmunds’ Executive Director of Insights, in a statement. "Average loan terms are already quite long, and interest rates are relatively low on average, so the consumer really has to make up the price difference."
- Americans Delay Car Purchases. Economic uncertainty led many Americans to tighten their purse strings and look for ways to cut expenses. At the height of the pandemic, the unemployment rate skyrocketed to 14.8 percent, which was the highest result since data started being collected in 1948, a report by the Congressional Research Service revealed. The rollout of the vaccine and increased knowledge of how to stay safe from the virus is helping the economy rebound and making it easier for Americans to find jobs. Yet, consumer spending trends and the rising prevalence of the Delta variant indicate Americans are remaining cautious when it comes to spending their hard-earned cash. They are turning to DIY and maintenance services to save money.
As the cost of new vehicles rises and consumer spending trends remain low, more Americans are putting off purchasing a new car. The average age of cars rose to 12.1 years, according to research conducted by IHSMarkit, a market research firm. The increase in the average age of cars on the road is a boon for auto repair shops. Older cars need more repairs and keeping up on maintenance is key to ensuring they run smoothly.
- Harsh Weather Conditions. Extreme weather conditions are helping increase profits at auto repair shops. Harsh weather is taking a toll on vehicles on the road and prompting people to take their cars in for repairs. Soaring temperatures are fading paint jobs and taxing cooling systems. This summer, many places in the country recorded record-high temperatures. July was the hottest month on record, the National Oceanic and Atmospheric Administration reported.
Now that hurricane season is in full swing, auto repair shops can expect to see an uptick in the number of cars damaged from flying dirt and debris. Researchers at Colorado State University predicted an above-average Atlantic hurricane season this year with 17 named storms. Winter weather conditions can also impact a car’s battery and tire pressure, calling for a trip to the mechanic.
Moran Provides Franchise Advantage
Auto repair shops are flourishing, and Moran’s family of automotive franchise brands offers a great opportunity for entrepreneurs to take charge of their future and build a legacy for their families. Moran is one of the largest automotive aftermarket franchisors with six different brands, including Milex Complete Auto Care, Mr. Transmission, Turbo Tint, and Alta Mere, across the United States and internationally in Africa and coming soon to Canada.
Our mission is to help franchise owners be in business for themselves but not by themselves. We strive to build relationships with our franchisees, and we value initiative, creativity, and an independent mind. We encourage our franchisees to ask questions and be our partners to help their business profit.
Moran sets itself apart from competitors in the auto repair industry by being a one-stop-shop for car owners. We encourage our franchisees to pursue co-branding options to provide extra services for customers. Co-branding can help generate more income and provide the multiple revenue streams they may need to succeed. We provide our franchisees with ongoing training and support, as well as a dedicated business franchise coach to help ensure profitability. Our marketing materials will enhance your location’s visibility and help you bring in new customers.
The total investment in one of our brands ranges from $118,219–$296,767, depending on the brand you choose. We are searching for partners who share our vision and put customers first. Our franchise owners all have a track record of maintaining ethical behavior in high-pressure situations and strive to be a mainstay in their local communities.
Learn More About Moran
If you are considering investing in a pandemic-resistant auto repair franchise, visit Moran Family of Brands to request information and connect with a franchise business consultant who can answer your questions about a profitable future in the aftermarket auto industry.