Repair and maintenance revenue for light vehicles in the U.S. is projected to increase at an annual rate of 4.0%, reaching $105 billion by 2010, according to the latest study from the Freedonia Group. The industry's current moderate revenue growth results from improvements in new vehicle quality, reliability and durability.

Overall new vehicle quality and resulting durability began to improve significantly during the 1980s, as new technologies and improved electronic systems were gradually introduced into the vehicle platform. These improvements have offset other factors such as the expanding light vehicle parc, average miles travelled per year, increased labour rates, and increasingly complex vehicle designs. These and other trends are presented in Freedonia¡¯s "Automotive Repair & Maintenance Services" report.

It says franchised dealers held the largest share of the U.S. automotive service marke value in 2005, due to their typically large size, and industry-high labour rates. Parts and service work made up on average about 12% of a dealer's total revenues in 2005, and generated nearly 60% of total operating profits. Additional reasons for the expected growth of the new light vehicle dealer's share of the service market include the extended vehicle and powertrain warranties offered on many newer vehicles.

General repair garages and service stations are expected to experience below average growth as an increasing number of these providers install convenience stores in the place of service bays. As in Europe, independent garages are also hampered by the inability to access OEM diagnostic and service data at cost-effective rates, and often have difficulty attracting and retaining skilled technicians.

Bodyshops will continue to perform the majority of vehicle body repair work, although dealers are attempting to capture more of this business. Specialists will experience moderate growth as a group, as exhaust system specialists continue to see declines caused by the improved quality of stainless steel exhaust systems, which often last the life of the vehicle. Transmission and drivetrain specialists will be increasingly affected by OEM extended powertrain warranties. Tyre stores and repair chains will experience strong growth as they extend their value propositions into more service categories.