April 14, 2021—A mixture of factors, including consumer spending on services and older vehicles on the road, points to a strong comeback year for automotive maintenance and repair, according to one analyst.
Writing for Seeking Alpha, Elliott Gue focused on Driven Brands, which runs Take 5, Meineke, and collision brands. He said that gasoline consumption trends indicate that the driving lull is coming to an end, which means drivers will need shops for service.
"More driving demand spells greater demand for basic automobile maintenance services and oil changes as well as rising auto loss ratios for the insurers and demand for DRVN’s collision repair services," he wrote.
At the same time, older vehicles on the road typically need more maintenance. Gue wrote that Driven's franchise model also helps profitability. In the long term, he is concerned about the rise of electric vehicles cutting into the business model.
