Valvoline, NAPA, AutoZone Speak On Consumers Deferring Maintenance
As low-income consumers seek to save money in every area they can, auto care chains are contending with how to communicate the need for maintenance before drivers meet costly repairs, reports The Wall Street Journal.
This conversation has been spurred by companies such as tire chain Monro and NAPA Auto Parts owner Genuine Parts seeing declining shares in the past year.
The reason for this, as Genuine Parts Company Chief Executive William Stengel shared with investors, is consumers being cautious with their money, and deferring necessary maintenance as a result.
In addition to this, a few weeks ago, Valvoline CEO Lori Flees added her observation of more automotive service providers turning to discounts and specials in an effort to attract customers.
“We are seeing some of those providers (such as tire service centers) promote discounted oil changes to drive traffic, as consumers are deferring or trading down those providers’ core service,” Flees wrote in an e-mail.
This is far from a problem unique to the automotive service sector, with dollar stores and food companies seeing the same from consumers; but while opting for a generic brand pasta may not make a difference, skimping on maintenance procedures will ultimately hurt the consumer more in the long run.
While vehicle owners may initially defer maintenance, it’s typically a cycle that lapses with inevitable breakdowns and expensive repairs, even in the midst of economically challenging times, argued AutoZone CEO Philip Daniele, who has been with the company for over three decades.
“In tougher economic times, people will generally defer maintenance and discretionary items early in the cycle,” said Daniele. “And then, as we get further through the cycle, they start to repair their cars because they realize a little investment today, maintaining their vehicle, defers a major repair into the future.”
This sentiment was echoed as well by O’Reilly Automotive President Brent Kirby.
“When you look back to the historically tough years in this industry…we did see a bounce back and we did see that customer return,” said Kirby in a recent call.
