Holt opens iFLEX 2019 with state of quick lube industry

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NASHVILLE, May 13, 2019—Whether focusing on car counts or ticket average, operators in the fast lube industry are still keeping their costs to manageable levels and maintaining profits.

It’s true as much for the franchise owner as it is for the independent shop, said industry consultant Ragan Holt during iFLEX’s opening day.

“You can still get in and you can still make a profit doing so,” Holt said.

The education sessions at iFLEX opened on the morning of May 13 in the Music City Center at Nashville. Holt’s presentation relied on his research and data from the 2018 NOLN Operator Survey, which included 1,700 facilities in 50 states.

Holt shared survey numbers that operators are maintaining 17 percent net profits and keeping their labor and supply costs down around 25 percent.

He said shops are still seeing customers in what General Motors found is the service sweet spot: a vehicle age of three to 8.3 years. That’s where quick lubes have the upper hand over dealer shops within their service niche, Holt said.

Changes coming to the industry threaten to change some parts of doing business. The biggest, Holt said, are coming regulations on marine fuel oil use that could disrupt the industry’s disposal of used motor oil.

“The single biggest user of our waste oil is no longer going to be allowed to use our waste oil,” Holt said.

He cautioned against misplaced concern over electric vehicles, which have still made just small splashes in vehicle ownership. What should get more attention is the growth of rideshare companies like Uber and Lyft, which could displace traditional driving or even car ownership as they gain ubiquity.

But for business in general, quick lubes should continue to sell their suite of services under the banner of convenience. That’s where dealers have struggled to make gains in the market and repair shops haven’t fully replicated, he said.

“We have a unique way that we operate, that we’ve set the standard for how this service is supposed to be,” Holt said.

The 2019 Operator Survey is open for submissions. Click here to complete it and contribute to providing the latest industry data.

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