Hi Bayview,
I'd suggest you are basically wrong, and just suffering from Vic-shock.
And in retail, you might be surprised to know that the volume of 'stuff' being sold hasn't dropped; it's just the prices that have dropped. You can buy a pair of perfectly good jeans at Big W for $8.50 today, or pay $185 at a high street boutique. Guess where a million mums are shopping today? And your own customers, they haven't stopped driving cars. They're just taking them to K Mart Auto-Service and Ultra-tune, i.e. the cut-price McDonalds of your industry.
It's not me who is wrong; I'm simply reporting what I get told by others who are experiencing stuff.
Can they all be wrong?
What about places like Retravision, Harvey Norman and the like; they are all reporting less sales (Retravision has just reported some very bad news since your post), and there haven't been too many retail sectors like electronics, white goods etc which have enjoyed (for the customer) such a dramatic drop in prices as these. Despite the drop in prices, their sales are down.
With regards to our own industry, again it's not just me I refer to. All the anecdotal info I post is from the industry people; tyre reps, parts reps, the wholesalers themselves etc.
I am not silly enough to think it is only my one workshop that has suffered a slow down and then cry about it as a nation-wide phenomenon.
Across the board our industry is down whether you talk about a Lexus or a 1992 Conformadore about to blow up.
You contradicted yourself in your own post; it may be true that the volume of sales hasn't dropped (I would suggest it has) - if everyone is reverting to buying cheap clothes on Ebay, or budget clothes from Target etc, or budget car services, letting their tyres run down to the steel belts, letting the services go 20k, 30k overdue...what does that say about the state of play? It means they are tightening the belt, spending it on more necessary items, saving money or they haven't got any.
Incidentally; we don't lose too many customers to budget establishments for services. I don't even try to compete with their product because I would get creamed if I did. I don't have the ability to advertise so comprehensively and nationally to get the volume of customers to make their system work for me.
A $99 service is going to get you almost exactly what you pay for; a quick oil and filter change, quick "safety check" and push the car out the door. Spending only $99 on a service is only putting off what needs to be done to a later time, and often becomes more expensive because the car breaks down when things get neglected. What customers don't realise either is that their staff are instructed to try and sell other repair work over and above this to cover the cost of the service.
It is physically impossible to do a service for $99 and make a profit. The labour alone for the mechanic is $20p/hour (or more unless you can fill the workshop with apprentices - but someone has to supervise them). The oil is at least 4 litres for a small car and an oil filter - no change out of $50 for the cheap stuff. Then there is advertising, rent, worksafe insurance, insurance, equipment, consumables and on and on. So, the profit has to come from somehere.
It is "loss leader" selling. Advertise the cheap product at a reduced price, and up-sell from there when the customer comes in to get them to spend more money that visit..some tyre places do it every day with tyres - "Tyres for small cars from $55". Key word being "from".
The reality it is a 155/75/13 which no-one has sold in about 5 years and they have 1 in stock. And so on.
Certain repairs are reported as being needed to be addressed when a car comes in at a certain mileage and/or age - whether it is needed or not. Shock absorbers is a common one.
What we do instead is offer truthful reporting and no hard-selling, and this is the reason why our customers come back to our place, and pay more. Often times we will tell folk their car needs attention on something at the next service, or sometime in the not-too-distant future. This is what brings customers back - and they do come back.
Mind you; if I could acquire 5 or 6 of these hi profile hi turnover franchise workshops I would. Bugger working for a living.