How the New CHIPS Act Could Impact Your Auto Repair Shop

On August 9th, 2022, President Joe Biden signed the CHIPS Act which will provide subsidies to companies that make semiconductor chips in order to meet the demand for these chips and bring more manufacturing of them into the U.S. The automotive industry has been one of the hardest hit by global chip shortages causing dramatic delays in new car production, and the availability of components needing to be repaired or replaced that require these chips.

Tekmetric: come see what better shop management workflow looks like

The Impact of the Chip Shortage

As an auto repair shop owner, you have seen firsthand the impact the chip shortage has had on your business — in a positive way. Customers who would have traded in their current vehicle a year ago are instead investing in maintenance and repair knowing they can’t replace it. The price of used vehicles has also skyrocketed while people hang onto their used vehicles longer. Many of our ATI members who also own used car dealerships have seen the condition drop and the mileage increase for the cars they are able to get for their lots — requiring a lot more repairs work up front to even get the vehicle ready for sale.

What’s on the Horizon?

You probably won’t see any immediate changes in the market. It takes several years to get a new semiconductor (chip) manufacturing facility built and running. However, it does offer incentives to some companies outside of the United States, and we may see some improvement within the next 12-18 months in chips getting into new cars that have been sitting in manufacturing facility lots waiting for them.

What Should your Next Move Be?

Most of the auto repair shops I work with are extremely busy and enjoying record sales numbers with their biggest challenge still being the shortage of technicians. However, as new cars start hitting the market, many of your customers will be trading in their used cars — many of which will come with some level of maintenance included to get them back to the dealership’s service center.

Your best defense is to provide exceptional customer service to your customers today so that they don’t want to go anywhere else.

Ways to provide exceptional customer service:

  • Pick up/drop off service
  • Free Rental Cars
  • After Hours Secure Key Drop
  • After Hours Secure Key Pick-up
  • Digital Vehicle Inspections
  • Text Messaging
  • Easy Appointment Setting
  • Maintenance Reminders (Email, Text, Mail)
  • Free First-Time Visit Gift/Offer
  • Returning Customer Gift/Offer
  • Referral and Rewards Programs
  • Local Community Involvement
  • Charity/Non-Profit Support
  • Car Care Clinic Sponsorship
  • Boy Scout/Girl Scout Merit Badge Workshop

The list is endless — think about what you consider exceptional service and build it into your model today before you see your car count drop due to customers replacing their current cars.

Free Tool: SWOT Analysis

Wondering if your shop is ready for the chip shortage to come to an end? A SWOT (Strengths, Weaknesses, Opportunities & Threats) Analysis can help you pinpoint the areas you need to work on to be ready. Get your copy of the SWOT Analysis Tool here.