SIC 7538 General Automotive Repair Shops


SIC 7538

This category covers establishments primarily engaged in general automotive repair, including those specifically engaged in repairing engines. Establishments primarily engaged in industrial truck repair are covered in SIC 7699: Repair Shops and Related Services, Not Elsewhere Classified.



General Automotive Repair


The general automotive repair industry, once dominated by small, independent service stations offering personal attention, evolved toward heated competition between manufacturers, dealer networks, and large, chain service centers. The rapidly increasing complexity of vehicles in the 1990s and early 2000s led to greater specialization among automotive mechanics. In some cases, however, the abundance of electronic engine components facilitated the diagnosis of problems.


Four types of businesses in the United States offer general automotive repair services: full-service gasoline stations, independent garages, automotive dealerships, and chain automotive centers. In the mid-1990s, full-service gasoline stations and independent garages experienced a decline due to the trend toward specialization in automotive mechanics and the competition offered by automotive dealerships and chain automotive centers. Results of a study conducted by Lang Marketing Resources, Inc., a consulting and analysis firm, showed a decrease in the service station and garage population from 227,000 to 155,000 between 1980 and 1996. Many of those stations were light vehicle repair locations. The Lang study showed that in 1980, service stations and garages installed nearly half of the aftermarket products in the United States, but by 1996, they installed only 35 percent of the product volume. According to U.S. Census Bureau figures, the number of automotive repair services had risen to 192,000 by the late 1990s.

Some owners of independent service stations complained that auto manufacturers reduced the repair options available to consumers by limiting availability of factory manuals and instruction to their own dealer networks. Other concerns about dealer repair centers focused on the expense of parts and repairs, as well as the conflict of interest involved when the same companies that sold new vehicles also provided most repairs. On the positive side, dealerships did offer a greater number of specialists with up-to-date training than most independent repair shops.

Because of their size, chain automotive centers garnered high levels of general automotive repair business and typically charged lower rates than dealerships. In the absence of any comprehensive regulatory standards, they also appealed to consumers because of their name recognition. Disturbingly, however, there were numerous cases in which such centers were found guilty of undertaking unnecessary repairs, and even of punishing employees who failed to maintain a set sales target for parts and service. In his book, Mr. Badwrench, Arthur P. Glickman quoted a study conducted at the University of Alabama at Huntsville in 1972 that found five major chains guilty of unnecessary repairs ranging from 22 percent to 47 percent of the total number performed. Similarly, in 1993 both Sears and K-Mart faced charges of making unnecessary repairs in their automotive service centers. Problems of this nature continued to arise with other companies through the late-1990s.

In an independent study conducted by Wiese Research Associates, Inc...

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