Economic Recession Lends Momentum to Right to Repair Act

SAN ANTONIO, Texas, April 29 /PRNewswire-USNewswire/ -- The following was
written by Ratika Garg, Research Analyst, Frost & Sullivan Automotive
Practice:

Typically vehicles that are model year 1994 or newer are more complex than
older vehicles due to increased use of electronics and computerized systems.
In order to service and repair these vehicles, independent repair shops
require highly skilled technicians and an increased amount of technical
information and software tools. While the same is made available by auto
manufacturers to their dealerships, independent repair shops are left in the
lurch, struggling with repair work.

The Right to Repair Act, introduced in 2005, calls for regulations requiring
auto manufacturers to share all service information and tools with the
independent service industry, so that there is a level playing field between
dealers and independent repair shops. After the warranty has expired, the
dealership option results in more costs and inconvenience to the vehicle
owner. The Act, if passed, will give vehicle owners the flexibility of
choosing a repair shop over dealers for their vehicle's service needs.

Figure 1-1 is a representation of motivations for independent repair shops for
passage of the Right to Repair Act. This clearly indicates that there are
strong reasons for the independent service industry to support the passage of
the Act.

http://www.righttorepair.org/images/email/tarrancesurvey044909.jpg

In a challenging economic environment, the Right to Repair Act will be
instrumental in addressing many issues that the repair industry faces today.

1. Viable Alternative To Rapidly Closing Dealerships
The Right to Repair Act gains much more significance with an increasing number
of dealerships closing because of the economic crisis. According to Automotive
News, nearly 1,008 dealerships closed in the U.S. in 2008. With more closures
expected in 2009, a growing number of consumers will service their vehicles at
an independent repair facility. In such a situation, it becomes imperative for
repair shops to get access to the required technical information and tools.

2. Savings for the Growing Base of Price-Conscious Consumers
As consumers keep their vehicles longer, there is an increasing number of
older vehicles in total vehicle parc. Between 2008 and 2015, the percentage of
vehicles that are 8 years of age or older is expected to increase from 51.9%
in 2008 to 57.2% in 2015. This has a direct effect on repair and maintenance
required to keep the vehicle running. In many cases, independent repair shops
are unable to service the vehicle due to a lack of information and tools. This
leaves consumers with the costly and inconvenient option of approaching a
dealership. According to the Automotive Aftermarket Industry Association, on
an average, vehicle repairs at new car dealerships cost 34% more than at
independent repair shops, resulting in $11.7 billion in excess costs annually
to consumers. In a tough economic environment, the Right to Repair Act will be
instrumental in equipping independent repair shops with the right information
and tools to service the consumer.

3. Fills Void Created by Lack of Skilled Technicians
Frost & Sullivan estimates that the number of active technicians between 2005
and 2009 declined by over 50,000 in North America. While dealerships employ
14.1 technicians on average, over 90% of independent repair shops have an
average of 4.4 technicians. With every dealership closing, the pressure on
availability of skilled technicians increases. The Right to Repair Act
addresses the issue by ensuring that repair shops have access to all pertinent
information and equipment through which they can provide the same kind of
quality service to a consumer that a dealership can offer.

Conclusion

The debate on passage of the Right to Repair Act continues. Auto manufacturers
argue that the Right to Repair act will result in sharing of proprietary
information that will impact vehicle security systems. Also, with the Obama
administration showing support for the "cash for clunkers" program, demand for
maintenance and service for old cars will reduce. While the "cash for
clunkers" program aims to boost new vehicle sales as well as promote a greener
environment, in reality it is simply a tool to stimulate the economy by
incentivizing customers to buy new vehicles. The Right to Repair Act, on the
other hand, is a much more sustainable solution that addresses the concerns of
multiple groups -- cash-struck consumers who want a more affordable service
option, consumers who cannot buy a new and more efficient vehicle even when
they get government vouchers as part of the "cash for clunkers" program, and
independent repair shops that are currently struggling with repairs of
technology-savvy cars.

For more information, please contact David Escalante, Corporate
Communications, at 210.477.8427 or david.escalante@frost.com.

Date written: 15 April 2009

SOURCE Frost & Sullivan

David Escalante of Frost & Sullivan, +1-210-477-8427,
David.Escalante@frost.com