Motorists delaying car repairs due to coronavirus

Auto service and repair industry suffers downturn.

Getting our vehicles serviced and repaired during COVID-19 has taken a backseat with the Australian Automotive Aftermarket Association (AAAA) stating 83% of automotive service and repair workshops nationally have reported a decrease in revenue, with half of all workshops reporting a downturn greater than 30%.

The auto service and repair workshop sector is one of the country’s largest, employing just over 150,000 people in 23,000 small businesses, according to the AAAA. 

Citing research firm ACA Research, which it commissioned to survey more than 300 auto service and repair workshops on the effects of the pandemic, the AAAA said the survey revealed an industry under intense stress but also displaying remarkable resilience. 
 
“When people aren’t getting their vehicle serviced or repaired that results in wider implications for businesses that make, sell and distribute brakes, oils, engine parts, tyres etc. – a sector itself that employs an additional 360,000 people,” said AAAA Chief Executive Officer Stuart Charity (pictured below).

“Despite taking such a financial hit, the auto repair and service industry is highly optimistic about the future – higher than any other small and medium business type.

“About 50% of our workshops are experiencing a 30%t or more downturn. We are only slightly behind the hospitality industry and worse than retail. 

“The reduction in turnover numbers is very concerning but the optimism is encouraging. It was quite heartening to read that 64% of automotive workshops reported that they are significantly impacted in the short term but believe ‘we’ll get through it’.”

Stuart Charity

Queensland workshops reported the lowest downturn at 41%, while Victoria was the most affected state with 61% of workshops experiencing a 30% or more decline in revenue.

Regional areas have also been less affected than metropolitan, with downturn figures of 40% and 56% respectively. 

Despite the optimism, the survey showed 12% cent of workshops were very concerned about surviving post COVID-19.

“If we translate that across our industry we will need to be providing some significant levels of support to about 2750 workshops nationwide,” Mr Charity said. 

He said the industry was hit hard because consumers were unsure about whether they could go to a workshop, particularly under the well-publicised state restrictions and edicts to stay home.  

“Despite this, most see this unprecedented situation as having a short-term impact,” Mr Charity said.

“They share a level of confidence about the ongoing viability of their business and they are more optimistic of a bounce back than any other sector.

“Consumers will need to attend to overdue services, or they will need an urgent repair to a vehicle that has been idle for a number of weeks.”

Car repair workshop

The survey, which was conducted in May, also collected data on satisfaction with government response to the pandemic, finding that 85% of workshops were either “somewhat” or “extremely satisfied” with the government’s business response, while 36% were extremely satisfied, which is higher than every other small business sector.   

Lesley Yates, AAAA Director of Government Relations, said: “The survey also showed good take-up of both the JobKeeper (52%) and the apprentice wage support offer (78%).

“Interestingly, and perhaps as a demonstration of the optimism in auto workshops, 25% of businesses are taking up the instant asset write-off and accelerated depreciation deductions.

“Clearly some businesses are in a positive financial position and can invest in tools and equipment during these hard times. These workshops are going to be able to gear up quickly and meet the market in what is likely to be an increase in consumer activity during the recovery.”