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Detroit 911
February 2009 | Issue One
 
 
DETROIT 911
 
This is no time to be in the auto industry… or is it?
While the Big-Three auto execs turn to Prozac in record numbers,Many small businesses in the auto trade could rev up in ‘09
 
THE BIG-THREE PILEUP
 
Any traffic report on the auto biz will hurt your ears. A Big-Three pileup inDetroit, hats-in-hand trips to the nation’s capital (first on private jets, then viamore humble, and PR-correct modes of transport), and a very uncertainfuture.
Photo: Close observers might even have seen this tasty bit of schadenfreude circling theweb (photocredit The Beast, buffalobeast.com).
 
BUT! BUT! BUT!
 
The car business is big, it’s broad, and it’s NOT very monolithic. But what about the many (many, many,many) small businesses in the car trade? Theirs is a different story.BizEquity.com tracks the value of small businesses in the U.S. (we’ve been referred to as the Zillow of small business values) and our BizEquity database is signaling a bullish trend for many types of small autobusinesses.
PEOPLE NEED TO GET AROUND
Why? Because people need to move in the U.S., and we’re not a country known for particularly efficient or popular public transport options. So while people are treating new car dealers as, well, lepers right now,other small businesses that focus on keeping cars going or selling used (aka “previously owned” or “gentlyworn”) vehicles are looking to do a brisk trade in a more cost conscious economy. In fact, our databaseshows that car repair shops and used car dealerships are actually worth more now than they were a year ago. And we predict continued improvement for them.
 
 
BY THE NUMBERS
This report covers the U.S. Market for three sectors of the auto industry: New Auto Dealerships, Used AutoDealerships, and Auto Repair & Maintenance Shops. Data used in this report has been generated from theBizEquity database.
358,856 POINTS OF LIGHT (Well, Except for the New Car Dealers)
There are approximately 717,712 small businesses in the auto industry. Thetotal value of all of these businesses at the end of 2008 was $123.4 billion.Small auto businesses, with a dramatic exception amongst new car dealers,saw their value rise, on average, since mid 2008. Now, new car dealershipsacross the country are worth $7.972 billion dollars less than they weremidyear, while the value of repair and maintanance shops and used car dealerships increased by $4.578 billion and $1.321 billion repsectivly.
Photo: Manufacturers are only part of the story
 A GOOD YEAR FOR THE FIXERS
There are 541,566 auto repair and maintenance shops inthe U.S., and this economy will be good for them. Peopledon’t want to buy new cars right now, for a lot of reasons.Like wondering if the companies will be around in a coupleof years, and if not, will the warranties still be any good?Since the U.S. is NOT a nation of hermits or bicyclists,people who fix cars for a living will see a rise in demand for their services.
Photo: These are the people we all go to for a bailout when our car decides totake a downturn.
Repair and Maintenance ShopsAverage ValueAug. 2008Average ValueDec. 2008Total Value Aug.2008 (in Bil.)Total Value Dec.2008 (in Bil.)Percent Change$81,102$89,454$43.866$48.445 10.44%
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