The Cubafication Of America's Roads

by Bertel Schmitt

Published: December 11th, 2010

The car industry is looking with envy and trepidation at the biggest bottom fisher in their market: AutoZone. Last week, AutoZone posted a 20 percent jump in quarterly earnings. And don’t look at their chart. You’d wish you would have bought AutoZone instead of the auto. But it’s not the financial results that has the industry worried. Everybody who knows the industry knows that the money is in fixing cars. The average expense per car for repair and maintenance is $1,200 per year, and if you multiply that with the 250 million cars and trucks on the street in the U.S., you’ve got yourself a nice $300 billion business. No, the industry is worried about why AutoZone suddenly is doing so well: America is in love with more mature models.Everybody expected the repair business to go up in 2009 as people kept their cars longer, and to go back down as people buy more new cars. Not so, says AutoZone CEO Bill Rhodes. Reuters reports Rhodes saying that “customers have been more focused on maintaining cars than they were three or four years ago.” Rhodes suspects there will be long-term benefit for the auto parts sector as drivers hold on to their cars longer.The most worrisome Rhodes quote: “I think people have changed their mindset on how they deal with their most valuable assets.”Translation: No more 2 year leases. Drive you car longer. Not that there is a shortage of cars in American garages anyway. Since 1972, there have been more cars than drivers. In recent years, that trend exaggerated. Despite cash for clunkers, the average age of cars and trucks is now 10.2 years. Now why do you think Paul Niedermeyer’s and Murilee Martin’s pieces are so popular? Nostalgia can’t be the only reason.

#Autozone #BertelSchmitt #Cuba #OldCars

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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Mike C. on Dec 12, 2010

I'd really like to believe the brighter outlook for Autozone, etc., is the result of more Americans deciding to become more educated about car repair. You have to wonder how long people will put up with the typical dealer fleecing... Maybe this is true for certain demographics, however, I have to wonder about today's teen drivers. Not that I've done any surveys but it seems very few teens I know show any interest in repairing their own cars. I'm 50 and will probably never buy a new car by choice. (barring a lottery win perhaps) I've saved bags of money doing my own repairs on my Subaru fleet (and 85 Porsche 944).

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Speedlaw on Dec 12, 2010

The simple fact is there is not much new from say, 1990 to present. Some cars have even gone backwards in terms of quality. Older hondas last longer than new ones-and they are not alone. Recently drove a new 335d and M3-my daily driver is an 03 330i. I couldn't feel much difference in feel and ride between the 2010 and 2003 cars. The M3 put the 330i on the trailer in terms of performance envelope, but for daily usefulness, even that wasn't all too different. They are all excellent and the newer cars had better shocks, but that is planned for the spring... I just installed an ipod and bluetooth module in the e46 so I'm not missing anything electronically. The newer cars have a prettier satnav, but that is not worth 50k. In terms of going, stopping, and cornering, there is nowhere left to go. a 0-60 of 7 seconds used to be nosebleed fast...now it's minivan. Everyone has ABS and most have DSC. 60-0 is in 150-180 feet. You can get nuts like a Vette, Viper or AMG Benz, but it won't make any difference in normal driving. This year's model is NOT any better than last years.... I'm currently supporting an independent shop and a few websites for parts. Once my Acura is out of warranty it too will never darken the dealer's door. They are quite good at selling $280 oil changes (er, "services") but not so good at troubleshooting an actual problem. The pretty girl always calls to "follow up", though.

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