Dealerships Continue To Expand Share Of Canadian Vehicle Service Market

Canada’s auto service market is declining to a pre-pandemic level of CDN$9.10 billion this year — down from CDN$10.90 billion in 2022, according to the J.D. Power 2023 Canada Customer Service Index — Long-Term (CSI-LT) Study. The report — which measures the usage and satisfaction of service shops for vehicles that are four to 12 years old — also found that customers in Canada are paying more for maintenance and repair work than a year ago.

According to the study, the average cost per visit at a dealership in 2023 is CDN$432 — up from CDN$394 in 2022. Meanwhile, the average cost per visit at an independent shop is CDN$262 — up from CDN$247 in 2022.

J.D. Ney, automotive practice lead at J.D. Power Canada, noted that inflation has had an effect on automotive service. “Average spend per service visit is up year over year at both dealerships and aftermarket facilities, yet the number of service visits is down,” Ney added. “While the pandemic caused a decline in service visits and revenue, the market has rebounded strongly. Now, we’re seeing a return to pre-pandemic levels for service on four- to 12-year-old vehicles.”

The dealership service segment continued to expand its market share this year, according to J.D. Power Canada, at the expense of the aftermarket, both in terms of revenue and number of service visits.

Dealerships have grown their overall share of the market to 61% compared to 58% in 2022. That incremental 3 percentage points of market share translates to more than CDN$250 million in revenue. Concurrently, dealerships also have experienced an increase in the number of average annual visits, rising from 1.5 a year ago to 1.7 for 2023.

However, when it comes to completing work correctly the first time, aftermarket facilities continue to outperform dealerships. Aftermarket facilities correctly completed service work the first time 95% of the time in 2023 — unchanged from 2022. Meanwhile, dealers’ success rate was 93%, revealing a continuing decline from 94% in 2022 and 96% in 2021.

According to J.D. Power Canada, 61% of owners who chose a dealership over an aftermarket facility cited previous experience with the dealership as the main reason. Convenience of location at 42% and recommendation from friends and family at 23% were key motivating factors for choosing an aftermarket service facility.

Lexus dealerships and Volkswagen dealerships ranked highest (in a tie) in the dealership segment with a score of 842. Toyota dealerships came in third at 815.

Jiffy Lube ranked highest in the aftermarket service segment with a score of 818 followed by Great Canadian Oil Change in second place at 809.

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