Customers at auto service brands were more selective in recent years, but the everlasting need for car maintenance meant continued sales growth for car care concepts.
Across all auto brands in the Franchise Times Top 400, total sales came to $17.6 billion in 2023, a 10.2 percent increase from $16.01 billion in 2021. The number of units also rose, jumping 3.3 percent from 13,958 to 14,423 in 2023.
Gary Skidmore, senior vice president and chief operating officer at Big O Tires, said economic factors such as inflation impacted sales, but customers didn’t stop coming through the door. Instead, shoppers looking for new tires went for lower-cost options.
Big O Tires Senior Vice President and Chief Operating Officer Gary Skidmore
“The core thing we see with our customers is that they’re looking for value,” Skidmore said. “What we’ve seen is a bit of a shift from tier one tires to tier four. That shift hasn’t been a tremendous amount, but a noticeable move toward a value shopper. There’s been a rebound back into tier two and tier one, so we’re expecting the second half of 2024 to be very strong.”
Skidmore said the key to maintaining sales growth is ensuring each tire sold is good for the car, the consumer and the brand. That mentality helped the brand reach more than $1 billion in 2020 and drive sales up to nearly $1.3 billion in 2023.
Another brand showing strong sales growth is the oil change concept Valvoline, which crossed the $2 billion mark in 2022 with $2.4 billion and hit $2.8 billion in 2023. Adam Worsham, Valvoline Chief Franchising Officer, said the business is naturally resilient, even when there are economic setbacks.
“New car sales are increasing, and by about year three and beyond, we start to see those cars,” Worsham said. “When the economy is strong, people are buying new cars, and that helps fill the pipeline for the following few years. Then, when the economy is soft, and new car sales decline, people keep their car longer, which also fits us.”
Valvoline Chief Franchise Officer Adam Worsham
Similar to the situation at Big O Tires, Worsham said he sees the consumer being more mindful about their spending with monetary value in mind. However, he said the value of the service remains important.
“There are examples of that happening, where they continue to reward those retailers,” Worsham said. “Being able to offer quick, easy and trusted services in around 15 minutes is also a benefit to consumers who’re looking for convenience.”
According to Grand View Research, the oil change service market was valued at $7.48 billion in 2022, and is expected to grow to $11.31 billion by 2030. Across all types of U.S. auto services, Mordor Intelligence found the market valued at $188.13 billion, and is projected to reach $251.52 billion by 2029.
An aspect boosting the industry is the increasing age of vehicles, which has risen for a fifth year in a row, Mordor Intelligence reported.
According to leadership at Midas, though, sales growth for franchise brands needs to be backed up by a good working relationship between the company and owners.
Midas President and Chief Operating Officer Lenny Valentino Jr.
“The strategy for building growth is that you have to be a unified organization between the franchisor and franchisee,” said Lenny Valentino Jr., Midas president and chief operating officer. “We have a great relationship with our franchisees, and we’ve put together a governance program for our owners to make sure we make decisions together.”
That unified front helped Midas reach $1.93 billion last year.
Like Midas, Tint World CEO Charles Bonfiglio stressed the importance of the franchisor supporting its franchisees. Bonfiglio said the brand built out its real estate and marketing teams to ensure growth across the system.
“From content writers to social media directors, we have that all in house,” Bonfiglio said. “It’s important for us to work with franchisees to build the number of leads and turn it into customers.”
In 2023, Tint World’s sales grew to $89 million, up from $74 million in 2022.