Auto repairs, parts sales pick up
At Pep Boys in Commack, Nikhil Chaudhri repairs a 2003 Hyundai this week. The average vehicle nationwide is a decade old. Pep Boys reported profits up 60 percent in its last fiscal year. (June 7, 2011) Credit: Daniel Goodrich
The decline in new-vehicle sales during the recession is belatedly helping the auto repair and parts business as vehicles age.
Industry experts say sales of auto repair parts and labor flattened or fell during the recession; while people bought fewer new cars, they also tended to neglect the ones they had. Ciro Martinez, service manager at the Pep Boys Commack store, recalls people coming in with brakes badly worn. "They were overdue," he said.
Now, with new-vehicle sales still well below pre-recession levels and the average vehicle on the road nationwide about a decade old, neglect is catching up with vehicle owners, says Stephen Spivey, who tracks the market from the San Antonio office of the consulting firm Frost and Sullivan.
"For a lot of the routine maintenance that makes up the bulk of the products and services in the aftermarket, you've seen deferred maintenance taking place," Spivey said. "Now, people are circling back around, having made the decision to keep their cars a few more years."
Nicole Dash, Long Island area manager for Pep Boys, said Tuesday at the Commack store that high gasoline prices have spurred sales of items that increase fuel efficiency, such as engine air cleaners. "Customers are more interested in their maintenance now," she said.
Ron Rossi, director of research for the Automotive Aftermarket Industry Association in Bethesda, Md., says industry revenues totaled about $210 billion in 2007, stayed flat in 2008 and fell in 2009 to about $207 billion. They rose to $215 billion last year and are forecast at $224 billion this year.
AutoZone, the repair and parts chain based in Memphis, reported May 24 that its earnings rose by 12 percent in its third fiscal quarter ended May 7, to $227.4 million -- exceeding analysts estimates. AutoZone has more than 4,000 locations in 48 states, including 13 on Long Island, according to its website.
In April, Atlanta-based Genuine Parts said its first-quarter profits rose 26 percent from a year earlier, to $126 million. Genuine Parts is majority owner of the National Automotive Parts Association, a trade group that distributes auto parts nationwide to about 6,000 stores, including 10 on Long Island, its website says.
Pep Boys reported profits up 60 percent to $37 million in its last fiscal year, which ended Jan. 29; it reported earnings late Monday for the quarter ended April 30 that were up slightly to $12.4 million, or 23 cents a share, on sales up less than 1 percent to $513.5 million -- both of which missed analysts estimates. The Commack store is one of 10 conventional ones on the Island; an 11th location, in Centereach, does service only.
Not everyone sees growth. Anthony Pirrera, president of privately held Aid Auto Stores Inc., the Patchogue-based chain that has eight outlets on Long Island, says longer manufacturer warranties mean fewer repair parts sold at the retail level. Plus, he says, "the car we drive today requires very little maintenance." And, he says, the growing complexity of cars makes some owners reluctant to tackle repairs -- on what he says are largely unfounded fears of voiding warranties.
On the upside, he says, people intending to keep cars longer take better care of them -- including cosmetically. So, he says, his business hasn't changed much. "For me," he said, "it's been kind of flat."
