Auto repair industry thriving in down economy

For decades, automotive repair has been seen as a grease-stained poor relation of the dollar-laden sales segment in the auto industry.

Not now.

As new-car sales have plunged along with consumer confidence, more people are spending to keep their current cars running. Auto service and repair arguably have become the lifeblood of the industry.

Dealership service/repair operations, independent auto shops and businesses that cater to do-it-yourself mechanics all are doing well. At most local dealerships, service/repair operations are now the primary money-makers.

"Our service and parts departments are among the most important, consistently profitable departments," said Rick Niello, president of the Sacramento-based Niello Co., which operates 13 mostly high-end foreign dealerships in Northern California. "I would say service and parts probably account for 75 percent of our profitability. … In past years, it was less than 50 percent."

Niello said the company's dealerships serviced about 100,000 cars in each of the past two years, five times what they were doing in 2001.

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