Mend &'Make Do is good news for automotive services

Despite the well documented problems of the new car manufacturing industry, perhaps surprisingly, franchises in the automotive services sector are offering better than ever opportunities to make money. Lloyd Evans, Chief Executive of ChipsAway, leading automotive paintwork repair franchisor, explains why

Although figures for new car production in the UK appear to be in free-fall, as people in fear of redundancy, tighten their belts and hold on to their money rather than splash out on a new car, you could be forgiven for drawing the conclusion that starting a business in this beleaguered sector might not be the best idea right now. However, you'd be wrong. At ChipsAway, franchise owners have been experiencing an unprecedented boom in new business and we believe this is set to continue.

Motorists may not be up for risking the major investment linked to purchasing a new car, however it seems that they are prepared to invest in maintaining their existing cars to extend vehicle life and improve residual value. This is great news for franchise owners such as ours who provide minor automotive paintwork repairs in a matter of hours and - most importantly in the current climate - at a fraction of the cost of traditional body shop methods.

ChipsAway franchise owners have seen enquiries for repairs soar over the last quarter. New business leads to the network between January and March this year were up a staggering 56 per cent on the same period last year. In March alone we took in excess of 9,000 enquiries, a figure higher than for any month over the 15 years since the company was first established in the UK.

With unemployment continuing to rise, the emphasis in most households - as well as many businesses - looks likely to remain on cutting spending and 'mending and making do'. This means repairs like those provided by ChipsAway, which cost a few hundred pounds, offer a highly attractive alternative to spending thousands on a new car. Accordingly, the automotive services marketplace is currently busier than ever, with the same people who previously had their cars repaired before selling now having repairs done to keep them on the road for longer. This trend is not just among private consumers, but in the business sector too. Many franchise owners in this sector include among their regular customers fleet managers and leasing companies. They are reporting that as residual values for lease cars drop, leasing companies are demanding that cars must be returned in pristine condition. Fleet managers are being charged heavily for even the most minor repairs, in a bid to claw back an extra £500 or so. Small wonder, business customers with large leased fleets are increasingly turning to specialists like ChipsAway to save them substantial costs.

Of course, what this essentially adds up to is good news for the automotive services industry in general and the minor automotive paintwork repair sector in particular. So, if you are considering the merits of investing in a franchise, you would do well to consider a business in this arena.