Take a Look at 5 Big Issues from 2014 and See What’s Changed (And What Hasn't)
A lot can happen in five years. Since 2014, the industry has seen major technology advances and legal changes. The oils and other products that shops used had to change as well to keep up with the times.
In other areas, things seem to remain at a relative constant. While shops might reach customers differently, top-notch customer service is always there. While operators might still worry about extended drain intervals, the numbers show that drivers still bring their cars in at about the same rates.
This month, NOLN turned back the pages to 2014 to see what big issues shops were talking about. Here’s a look at how those big issues look today and into the future.
The Issue: Drain Intervals
For years, operators have turned an uneasy eye toward late-model vehicles that more often use high-tech synthetic oils that can perform through longer change intervals.
Back in 2014, Nick M. Vuko told NOLN that his shops were looking for other revenue opportunities to offset the longer periods between oil changes.
“Extended drain intervals are causing us to have to find additional services to do per car,” said Vuko, who was at the time the general manager of Quick Nick’s Snappy Lube in Lincoln, Neb. “People aren’t changing their oil as often as the used to.”
The concern remains, especially with late models. The dealer-recommended oil change interval for a 2019 Honda Civic, for example, is 15,000 miles with an 0W-20 synthetic.
And shops are competing with dealers for those cars, Vuko says now. He’s now the president of the Walker Tire–Quick Nick’s shops in Lincoln. He says that, for customers who drive in the city conditions, his shops recommend a maximum 6,000-mile drain interval. And they’re still looking for opportunities to get more value to the drivers and more revenue for the shop. In one case, Vuko says he signed up with a program through a parts distributor to offer roadside assistance services for customers.
In another example, the shop offers free oil changes to customers who buy four tires from them.
“I think the big thing for every shop is to find some additional revenue streams for offsetting the increased intervals and look at that,” Vuko says. “I think there's some opportunity there.”
Still, the average car on the road today is 12 to 13 years old and often isn't running top-tier synthetic oils. Thus, operators haven’t reported drastic increases in intervals. According to NOLN’s annual Operator Survey, the average drain intervals have been:
It will take some time to see how drivers manage the intervals as these newer cars age into a decade and beyond. But if the past is any indication, car owners want to make sure they’re getting regular maintenance every 4,000 to 5,000 miles.
The Issue: Healthcare
The Affordable Care Act was a big topic for business owners in 2014.
That was the year that the landmark healthcare law took effect, four years after being signed by then-President Barack Obama. The law placed penalties on large employers and individuals who don’t purchase healthcare for themselves or their employees, respectively.
In 2014, operators told NOLN that larger shop networks were struggling at times to find ways to pay for expenses that arose with new health insurance requirements. “Large employers” meant that those with the equivalent of more than 50 full-time employees were required to provide coverage.
There have been changes to the law in recent years under a new presidential administration. In December 2017, the Tax Cuts and Jobs Act passed both the U.S. Senate and House of Representatives. President Donald Trump signed it later that month.
Included in the bill was the repeal of the penalty for an individual who doesn’t have health insurance. This effectively repealed the so-called “individual mandate” for health insurance.
What’s important to note is that the “employer mandate” remains in place for businesses with 50 or more full-time employees. The law requires that those large employers must provide coverage to at least 95 percent of those full-time workers and their children until the age of 26.
Businesses with fewer than 50 full-time employees aren’t penalized for not offering health insurance. They can, however, qualify for federal assistance to provide coverage through the Small Business Health Options Program. Employers with fewer than 25 full-timers may qualify for a tax credit.
Healthcare law is a vast, complex topic, which can see small details changing at all levels of government. Even in broad strokes, there is uncertainty in the future of U.S. healthcare laws as it stands.
The Trump administration is leading courts challenges to the Affordable Care Act. Meanwhile, 2020 presidential candidates are pitching different forms of expanded healthcare, including single-payer and “Medicare for all” models.
To make sure you’re in compliance with all the regulations, check with a local government healthcare expert or your insurer.
The Issue: Discover Customers
Back in 2014, operators told NOLN that they felt competition coming from dealer shops, which offered free oil change services in some cases.
The competition remains but hasn’t grown as much as some operators thought. At iFLEX 2019, industry consultant Ragan Holt said that while all shops are trying to add services to get people in the lot, dealerships haven’t been able to replicate the efficiency of the quick lube model.
“So far, the OEMs have not been able to achieve that on a big level,” he said during his session on the state of the industry.
More direct competition has come from general repair and tire shops that have been more nimble at adding dedicated quick lube bays. He said that has spread out customers across more businesses. But it’s still quick lubes that see customers on the most regular basis.
“We are the ones that are seeing the vehicles that they want in their shops,” Holt said.
That isn’t to say that market competition doesn’t exist. Nick M. Vuko, president of Walker Tire–Quick Nick’s in Lincoln, Neb., says his shops are feeling the pinch from dealers who offer service packages alongside vehicle sales as incentives.
“They're trying to presell three years of maintenance included in the car sale,” Vuko says.
It’s the quick lube shop’s model of efficiency, speed and convenience that continues to attract customers. Paired with excellent customer service, drivers should know your shop by name when it’s time for an oil change or related service.
The Issue: Telematics
In March 2014, NOLN featured an article about aftermarket telematics. One of the most recognizable examples then was the oil life monitor feature, which has become nearly standard in late-model vehicles today.
While the collection of diagnostic information by a vehicle is novel, it’s the release of that information over internet networks that makes the system really valuable, and auto manufacturers looked to capitalize on that tech to drive more aftermarket repairs to their shops.
Roger Lanctot, director of automotive mobility at Strategy Analytics, noted this market opportunity in the 2014 NOLN article.
“They (automakers) can monitor the vehicle, look at the odometer and proactively send out maintenance reminders,” he said.
Five years later, that’s still a quickly developing technology that automakers are exploring.
“More recently it's become clear with the growing amount of software in the cars that we need over the air software update capability,” Lanctot says now. “One of the reasons for that over-the-air software update capability is to preserve the cybersecurity of the vehicle.”
While the tech might be valuable to automakers, he said that it has met a less enthusiastic audience with consumers. There is no “killer app” that is booming in the consumer telematics market.
One reason is that while oil life monitors might be handy, there is little else that needs close monitoring on a new vehicle.
“By and large, the big problem in selling a new car with that functionality is that typically in a new car, not much goes wrong in the first two or three years,” he says.
Even so, quick lube and repair shops are still closely watching the topic. Groups like the Auto Care Association have launched campaigns on behalf of aftermarket industries to block that diagnostic data from being proprietary for automakers.
As NOLN reported in its July cover story, “The Battle Over Telematics Data,” shops are pushing to have access to the same business opportunities that might come from access to all that connected vehicle diagnostic information.
In short, a shop might be better positioned for business if it knows when a vehicle needs service before it happens.
“At the very least, anticipating problems for the consumer,” Lanctot said.
The Issue: Engine Technology
In June 2014, NOLN featured a story called “Air, Fire and Fuel: The Future of the Combustion Engine.”
Big changes were happening in engine design, and much of it was driven by efficiency targets in the federal government’s Corporate Average Fuel Economy (CAFE) rules.
“CAFE standards are driving the product in the direction that it wouldn’t necessarily have gone on its own,” Jay Kavanaugh, engineering editor at Edmunds.com, told NOLN at the time.
One trend emerged at the time as a combination of features: Smaller engines, direct injection technologies and, often turbocharging.
Automakers have looked at lots of different efficiency tricks in engine technology. Cylinder deactivation, stop-start, hybrid-electric drivetrains and others. None have exploded in popularity like direct-injection for gasoline engines.
Direct injection sprays precise amounts of fuel directly into the combustion chamber which, in communion with a precise spark timing, can maximize the power generated through that process. It’s an alternative to port fuel injection.
In 2015, the U.S. Department of Energy found that GDI (gasoline direct injection) technology exploded onto the scene, reaching nearly 40 percent of market share just seven years into use. That far outpaced competing efficiency-related designs.
In 2019, all automakers offer direct-injection engines for some models. They’re often paired with turbochargers and have smaller displacements than what might have been common before.
“Of all the emerging technologies, gasoline direct injection (GDI) has seen the highest level of adoption among manufacturers, reaching 51% for the 2018 model year,” the DOE wrote in a 2019 report.
Eight of the largest automakers included GDI in more than 75 percent of their vehicles.
There have been some bumps along the way. GDI engines were prone to added deposits on intake valves. The injectors spray at ultra-high pressure, which can blow some gasoline out of the combustion chamber.
Another big issue has been the emergence of low-speed pre-ignition in turbocharged direct injection engines. This “super knock” comes from excessive pressure in the cylinder that leads to abnormal combustion events. LSPI can cause major damage to engines.
The industry has responded to these issues in many ways. Oil companies are altering formulas and additive packages to help combat deposits. Standalone additive companies are developing their own products as well. And engine manufacturers are making design changes to make later models less prone to these issues.