As new-car sales stall, repair shops prosper.

• Author: Taylor, Mike
• Position: SMALL [biz]

As a fourth-generation car dealer, Fred Emich IV doesn't have to go far to hear comparisons of the current economic crisis with other dire times in U.S. history.

Emich's great-grandfather started a Chevrolet dealership in Chicago after serving in World War I. His grandfather opened a Ford dealership in Joliet, Ill. His father grew a single Oldsmobile franchise in Lakewood into nine dealerships before selling to AutoNation in 1997.

"My grandfather's still alive, and he went through the Great Depression," says Emich, who owns Chevrolet and Volkswagen dealerships in Denver with his father and a third partner. "My father and my grandfather both worked through the '80s when interest rates were 21 percent. They battled some very high interest rates and inflation. And they said that this is much worse."

The outlook is especially bleak for domestic dealerships burdened by the uncertain future of the Big Three, slightly less so for foreign-car dealers. According to Emich, Volkswagen, for example, has a bond rating second only to Toyota and thus can still finance anyone with a credit score more than 600, "probably 75 percent of the population," whereas he says General Motors Acceptance Corp. can't finance anyone with a credit score below 700.

Still, Emich said a few days before Thanksgiving, "All facets of our business are down quite a bit."

He's not alone. U.S. new-car sales in November were the lowest in 26 years for that month.

But there is a silver lining to the sagging new-car sales: a surge in business for auto repair shops. Some of them.

Dana TePoel, owner of Lake Arbor Auto & Truck in Westminster, said business at his repair shop was up 18 percent for the first 11 months of 2008 compared with the same period a year earlier, and up a whopping 65 percent for the month of September compared to the same month in 2007.

Nationwide, the Automotive Service Association reported in November that business for auto repair shops was up 16 percent over 2007.

TePoel believes it's the fairly high-end demographic he serves that accounts for the increases in business. His shop, which one customer dubbed the "Garage Mahal," boasts a comfortable waiting area, a classroom for the shop's four technicians to receive periodic continuing education from visiting instructors, and even a spare office with a computer and two WiFi connections for customers to get work done while they wait on repairs.

TePoel...