Dragging economy revs up auto shops

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Certified Business Brokers, Houston, closed the deal between Buyer, Tariq Aziz, and Seller, Wayne Ray, of Mr. Transmission, on February 27, 2009.
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Published February 27, 2009 -- Houston Business Journal - by Allison Wollam

Tariq Aziz owned a health care software services company for 14 years. He considered the current economy, decided to change careers, and has purchased a Mr. Transmission/Milex Complete Auto Care shop.

“When I look at the economy, I’m thinking that people are choosing to maintain and repair theirs cars in case, God forbid, they lose their jobs,” says Aziz. “People are willing to spend a couple-hundred dollars to maintain their cars in order to get back and forth to work. It’s a scary time right now.”

A lot of concerned consumers are giving more business to local auto shops by putting off new car purchases.

Lee Gault, service manager for Montrose Automotive Center, says the 50-year-old shop on Montrose Boulevard is off to a record start in 2008 due to customers coming in for minor repairs and maintenance services.

“People never used to come in when they were supposed to for maintenance services, and now they’re coming in and demanding those services,” says Gault.

He notes more customers are coming in for 30,000-mile, 60,000-mile, and 90,000-mile checkups than he’s ever seen before.

Dan Proctor, general manager of Houston Automotive Center, has seen business surge over the past two months.

“We’re seeing a big increase in the business of fixing existing repairs and doing the little things that people were putting off in the past,” says Proctor. “People are much more willing to make the small repairs immediately to make sure that it doesn’t turn into a bigger problem.”

Proctor has stayed busy replacing training belts, hoses and repairing small coolant leaks since the beginning of the year.

Houston Automotive Center was established in 1999 and moved to 3707 Las Palmas St. in August 2007. Proctor says the past two months have been, by far, the busiest the shop has been since relocating.

Business has gotten an indirect boost from the exit of area auto dealerships such as Bill Heard Chevrolet and Lawrence Marshall in Hempstead. New-car owners want to make sure their dealerships will still be in business in the near future, according to Proctor.

“I feel bad for the people who feel compelled to do this, but it is good for business,” he says. “People feel like they have to take care of their cars now because they are afraid they can’t afford a new car, not because they want to take care of them.”

Bad news for car dealerships apparently is good news for auto shops not only in Houston, but also across the country.

Overall aftermarket sales were $286 billion in 2007, a 4 percent increase from 2006.

Potential for growth is driving entrepreneurs such as Aziz. His Mr. Transmission shop at 4802 Larkin keeps three mechanics and a manager hopping.

Aziz says he receives phone calls every day from other shops asking if he has any transmission builders who can help with the demand for services.

Mr. Transmission handles both retail and wholesale accounts, including used-car dealerships.

“We work with used-car dealerships that are selling 120 cars a month,” says Aziz. “Luckily for us, people seem to be buying older cars or just taking care of the ones that they have. This is a booming business right now.”

Aziz expects this trend to continue through the credit crunch affecting potential new car buyers.

“Banks aren’t loaning anyone money anymore, so even if you do want to buy a new car, you’re probably not going to be able to get the credit to purchase one any time soon,” says Aziz.

Proctor of Houston Automotive Center doesn’t see consumer apprehension going away in the near future.

“As long as people are keeping an eye on the stock markets fearing a recession, and are seeing the Big Three in the automotive industry struggle, no one is going to rush out to buy a new car,” says Proctor.