Automotive Oil Change & Lubrication Services
Description
Companies in this industry provide motor oil changes and lubrication services for automobiles and light trucks. Major US companies include Havoline Xpress Lube (owned by Chevron), Jiffy Lube and Pennzoil 10 Minute Oil Change (both owned by Royal Dutch Shell), and Valvoline Instant Oil Change.
The global lubricants market size is forecast to reach about $180 billion by 2030 and is expected to grow at a compound annual growth rate (CAGR) of about 3.8%, according to Grand View Research. Asia Pacific has dominated the lubricants market, followed by North America and Europe. Growth of the global automotive oil change and lubrication services industry (aka the quick lube industry) is driven by increasing vehicle ownership in developing markets and the number of miles driven.
The US automotive oil change and lubrication industry includes about 8,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $6 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the amount of driving that consumers do and by new car sales. The profitability of individual companies depends on convenient location and good marketing. Large chains have an advantage in name recognition, but the operations of individual locations are similar. Small companies can compete successfully by owning favorable locations. The US industry is fragmented: the 50 biggest companies generate about 45% of revenue. The Canadian quick-lube industry is similarly fragmented, with a small number of large players accounting for roughly half of the market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are oil changes (about 80% of sales) and other schedules, factory-recommended, and preventive maintenance. Some locations provide repair services. Routine maintenance services like adjusting tire pressure, changing windshield wipers, replacing light bulbs, and topping off fluid levels are usually done in 10 minutes or less.
Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. However, to reduce capital requirements and enable quicker relocation, vehicle lifts can be used rather than basements. Locations can be built on a relatively small piece of property and require low capital investment, typically between $250,000 and $400,000.
Managers closely monitor daily vehicle count, average ticket price, and which services are provided to which customers.
The global lubricants market size is forecast to reach about $180 billion by 2030 and is expected to grow at a compound annual growth rate (CAGR) of about 3.8%, according to Grand View Research. Asia Pacific has dominated the lubricants market, followed by North America and Europe. Growth of the global automotive oil change and lubrication services industry (aka the quick lube industry) is driven by increasing vehicle ownership in developing markets and the number of miles driven.
The US automotive oil change and lubrication industry includes about 8,500 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $6 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the amount of driving that consumers do and by new car sales. The profitability of individual companies depends on convenient location and good marketing. Large chains have an advantage in name recognition, but the operations of individual locations are similar. Small companies can compete successfully by owning favorable locations. The US industry is fragmented: the 50 biggest companies generate about 45% of revenue. The Canadian quick-lube industry is similarly fragmented, with a small number of large players accounting for roughly half of the market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services are oil changes (about 80% of sales) and other schedules, factory-recommended, and preventive maintenance. Some locations provide repair services. Routine maintenance services like adjusting tire pressure, changing windshield wipers, replacing light bulbs, and topping off fluid levels are usually done in 10 minutes or less.
Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being completed above. However, to reduce capital requirements and enable quicker relocation, vehicle lifts can be used rather than basements. Locations can be built on a relatively small piece of property and require low capital investment, typically between $250,000 and $400,000.
Managers closely monitor daily vehicle count, average ticket price, and which services are provided to which customers.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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