Economy fuels auto repair shops' growth

In a down economy, it pays to know how to fix stuff.

Owners of some Springfield auto service shops report that they're seeing more cars rolling into their bays than at this time last year, and they suspect the bad economy is driving the trend.

"I'm guessing most folks that were planning to trade cars decided to fix it and keep it instead. They've been putting off repairs because they planned to trade," said Karl Bruning, who opened Family Auto Repair, 2140 S. Campbell Ave, in June 2008 after being laid off from Willow Brook Foods, which closed its doors in September 2008.

Across town, Sharon Williamson - who with husband Kelly has owned and operated Kelly's VIP Auto Services Center, at 2867 E. Sunshine St., since 1996 - is seeing the same thing.

Williamson said repairs and maintenance are definitely up, particularly in the last four months, though she didn't cite specific revenues. Many customers ask for a complete check-up with a prioritized repair list, and once they have the estimate, customers will either choose to take care of the issues then or spread the repairs out for several months, Williamson said.

"Their comments a lot are, 'We're planning on keeping this car for a couple of years,' or 'We don't want another car payment,'" she said.

According to Motor Intelligence, a company that compiles auto data, new-vehicle sales are down 38.4 percent since this time last year. And Springfield-based O'Reilly Auto Parts and Memphis, Tenn.-based AutoZone - two of the largest U.S. retailers of aftermarket auto parts - each saw their stocks rise to 52-week highs in the first quarter of 2009.

O'Reilly (Nasdaq: ORLY) reported fourth-quarter sales of $1.1 billion - an 84 percent improvement compared to the same period in 2007. According to its annual report to the Securities and Exchange Commission, O'Reilly's 2008 sales increased 42 percent to $3.58 billion compared to 2007, fueled in part by the company's acquisition of more than 1,300 CSK Auto Corp. stores. AutoZone (NYSE: AZO) reported in its annual SEC filing net sales for fiscal 2008 of $6.5 billion, up 5.7 percent from fiscal 2007, growth attributed partly to opening more stores in the U.S. and Mexico.

Car sales data and the growth of those retailers seem to indicate that cars are staying on the road longer, and people are willing to invest in the parts they need to keep them running, whether they do the job themselves or visit a repair shop.

And more often, according to area shop owners, car owners are making serious investments in keeping their autos on the road.

Bruning said he's doing more expensive repairs - "engines, transmissions, big stuff," he said, including a $4,000 engine job in mid-April.

Williamson said her customers also are more willing to spring for several hundred dollars' worth of repairs, a switch from their pre-recession attitudes.

"When the economy was better (a customer) would have ... been looking at a $500, $700 repair bill and their comment would be, 'Oh, well. We'll just trade it in and get a new car,' which kind of floored me," she said.

But repair shops aren't the only ones seeing increased business in the automotive sector. Joe Hinton, who opened Personal Touch Auto Detailing last December, already has seen enough of an increase to prompt a move to a new shop at 1910 S. Stewart Ave. While the square footage is comparable to his previous location, the new shop is insulated and has better security, Hinton said.

The sour economy prompted a shift in the type of business coming in to Personal Touch Auto Detailing, he said. As recently as January and February, 90 percent of Hinton's business came from dealerships, with the remaining 10 percent individual drivers.

But in mid-April, he said, business had shifted to 70 percent personal and 30 percent dealers.

"We're getting the normal daily driver in, someone who just wants their car to look nice again," Hinton said. "They can't afford to get a loan, or they're not approved for a loan anymore, so they're taking better care of their vehicles."[[In-content Ad]]