Industry Overview: Auto Mechanics in Canada

Published: May 30, 2019
Last Updated: Jul 2, 2019

This industry overview will discuss the latest statistics and trends for auto mechanics who want to learn more about the auto mechanic industry in Canada.

Photo Credit: Photo by Ryan Doka from Pixabay

Key Takeaways

  • New Entrants: Steady growth in the demand for automotive repair services has led to an increase in the number of new entrants during 2014-2019.
  • Industry Growth: Revenue for the auto mechanics industry is forecasted to grow steadily during 2019-2024.
  • Stronger Downstream Demand: Increases in per capita disposable income are expected to contribute to stronger downstream demand during 2019-2024.
  • Increases in the Average Age of Vehicles: The average age of vehicles increased during 2014-2019. Older vehicles require more frequent repairs, supporting industry growth.

For more specific information about researching the automotive industry, please see our Automotive Repair Guide. If you are looking for information about related industries then see our Auto Dealership Guide and Automobile Detailing Guide.

Industry Structure

  • Industry phase: MATURE
    Automotive repair services in Canada are not expected to encounter sudden changes in demand. This is a key indicator that the industry is mature.

  • Concentration level: LOW
    Canada’s top industry players account for less than 5% of industry revenue. Most establishments in Canada are small businesses with limited reach.

  • Regulation level: MEDIUM
    Inspection procedures vary from province to province. With regard to recycling used oil, operators must abide by federal and provincial legislation.

  • Barriers to entry: MEDIUM
    Capital requirements, access to skilled labour, industry certifications, and establishing a brand name are among the barriers to entry.

  • Competition level: HIGH
    Internal competition — Companies compete on price, location, service quality, and reputation. A high number of competitors offering same/similar services means that price is a crucial point of competition.
    External competition — Automobile dealers that provide parts and services are a major competitor to the auto mechanics industry. Other external competitors include full-service gas stations and in-house repair services (Gonzalez, 2019).

Industry Performance Snapshot

During 2014-2019:

  • Industry revenue grew at an annualized rate of 2.6% to $10.8 billion.
  • Higher disposable incomes, consumer discretionary spending and sales of new vehicles drove industry growth.
  • The average age of vehicles increased. Canadians spent more money maintaining their vehicles (Gonzalez, 2019).

Industry Outlook

For the period 2019-2024:

  • Revenue is expected to grow at an annualized rate of 1.9% to $11.9 billion.
  • Increases in consumer disposable income and higher sales of used vehicles will contribute to ongoing demand for auto mechanic services.
  • The number of automotive establishments is expected to increase, with forecasted annualized rates of 1.5%.
  • Sales of new vehicles are expected to decline due to higher lending rates (Gonzalez, 2019).

Products and Services

Source: Gonzalez, E. (2019). IBISWorld Industry Report 81111CA: Auto Mechanics in Canada.

Key Markets

Source: Gonzalez, E. (2019). IBISWorld Industry Report 81111CA: Auto Mechanics in Canada.

Cost Breakdown

Source: Gonzalez, E. (2019). IBISWorld Industry Report 81111CA: Auto Mechanics in Canada.

Business Locations

Source: Gonzalez, E. (2019). IBISWorld Industry Report 81111CA: Auto Mechanics in Canada.

Trends & Changes

Increasing Services and Customers

  • Increases in per capita disposable income and the number of cars sold drove steady growth during 2014-2019. This is expected to continue during 2019-2024.
  • The total number of auto mechanic workshops in Canada is expected to reach 29,770 in 2024.
  • ​The total number of vehicle registrations is expected to increase, with forecasted annualized rates of 1.1% (Gonzalez, 2019).

An Expertise-driven Workforce

  • Increases to the size of the auto mechanic workforce and wage costs are forecasted for 2019-2024 (Gonzalez, 2019).
  • Auto mechanics will be expected to have a high degree of expertise in automobile functions (Telang & Karren, 2017).
  • Industry wages are expected to rise at an annualized rate of 1.7% to $3.4 billion in 2024 (Gonzalez, 2019).

External Pressure

  • Competition will continue to come from automobile dealerships, in-house repair services, and at-home repair activities during 2019-2024.
  • Dealerships will continue to be a major threat due to relationships with manufacturers that grant them access to repair instructions and diagnostic tools (Gonzalez, 2019).

Sources

Gonzalez, E. (2019). IBISWorld Industry Report 81111CA: Auto Mechanics in Canada. Retrieved from IBISWorld database.

Telang, R, & Karren, J. (2017, November 30). Help Wanted: The Future of Automotive Talent is Shifting Gears. PWC.
Retrieved from: http://usblogs.pwc.com/industrialinsights/2017/11/30/help-wanted-the-future-of-automotive-talent-is-shifting-gears/

Supplementary Resources

Government of Canada. (n.d.). Canadian Automotive Industry. Retrieved from: https://www.ic.gc.ca/eic/site/auto-auto.nsf/eng/Home

PwC Canada. (n.d.). Industries – Automotive. Retrieved from: https://www.pwc.com/ca/en/industries/automotive.html

Province of British Columbia. (n.d.). Business, Industry & Trade. Retrieved from: https://www2.gov.bc.ca/gov/content/data/statistics/business-industry-trade

Scotiabank. (2018). Global Auto Report. Retrieved from: https://www.scotiabank.com/content/dam/scotiabank/sub-brands/scotiabank-economics/english/documents/global-auto-report/GAR_2018-07-06.pdf

Statistics Canada. (n.d.). Canada Business Counts, With Employees, December 2018. Retrieved from: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3310010501

Statistics Canada. (n.d). Automotive Repair and Maintenance – 8111. Retrieved from: https://www.ic.gc.ca/app/scr/app/cis/businesses-entreprises/8111

Statistics Canada. (n.d.). Automotive Statistics. Retrieved from: https://www.statcan.gc.ca/eng/topics-start/automotive

Statistics Canada. (n.d.). Table 14-10-0220-02. Employment and Average Weekly Earnings (Including Overtime) for all Employees in the Automotive Industry, Monthly, Seasonally Adjusted, Canada. Retrieved from: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410022002

Statistics Canada. (n.d.). Table 21-10-0061-01. Repair and Maintenance Services, Industry Expenditures. Retrieved from: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2110006101

Statistics Canada. (n.d.). Table 23-10-0067-01. Road Motor Vehicle Registrations, by Type of Vehicle. Retrieved from: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2310006701

Industry Trends