Transmission Chains Increased Sales, Franchise Growth Reflects Economic Trends

While consumers continue to put the brakes on new car purchases, Automotive franchises are benefiting from the fueled demand for vehicle services and repairs.

"Unable to afford the rising price of new vehicles, consumers are keeping their cars longer - significantly increasing the demand for automotive services and repairs," said Barbara Moran, president of Chicago-based Moran Industries, a leading franchisor in the automotive aftermarket, with specialty automotive repair chains totaling 190 locations throughout the United States.

In fact, in 2001, Moran experienced a 7 percent increase in system-wide revenues; a 12 percent system growth in new centers; a 64 percent increase in Franchise inquiries and a 13 percent jump in franchise applications. Each of Moran?s specialty chains, including 150 transmission repair facilities that operate under the trade names Mr. Transmission, Multistate Transmission, Atlas Transmission and Dr. Nicks Transmission, enjoyed the ride as consumers filled their waiting rooms with vehicles requiring fast and reliable service.

What's "driving" the demand?

According to Moran, which also Franchises Milex Tune Up and Brake, a general automotive repair chain and Alta Mere, which specializes in window tinting, auto security and auto accessory products, the following factors have contributed to increased revenues at automotive repair shops throughout the nation:

• The average age of vehicles in United States moved from 7.8 years in 1990 to 9.2 years in 2000;
• The average number of miles driven annually is increasing with dual income households;
• With increased technology and electronic equipment, new vehicle prices rose 53.8 percent between 1990 and 1999 and another 6.4 percent from 1999 to 2000;
• Improved quality and engineering is allowing vehicles to remain on the road longer;
• New vehicle registration increased 11.9 percent from 1990 to 1999 while vehicle salvage only increased 5.3 percent; and
• The number of vehicles on the road in the United States increased from 130 million to 216 million from 1980 to 2001.

Capitalizing on industry demand, Moran is in the midst of campaign to unify its trade names to create a stronger brand identity. It has nearly completed conversion of all of its Atlas Transmission centers to Mr. Transmission, the largest and most widely recognized brand in the Moran family. Mr. Transmission has a solid reputation for quality service that has spanned over 40 years in many major markets.

"The merge sets the stage for us to expand on national basis with established brand identity. It's perfect timing," Moran said. "The conversion will help increase the value of our business at all of our locations. We enjoyed many years of success as Atlas, and want our customers to understand that we continue our quality service and nationwide warranty program under the Mr. Transmission name."

In addition to increased consumer demand, Moran has experienced renewed interest in its franchise opportunities, which Moran said is directly tied to economic factors and corporate downsizing, and our commitment to our franchisees success and growth.

"As people are laid off from the corporate world, they are seeking a valuable investment that gives them control over their own destiny in a stable market," she said, noting that the U.S. transmission service segment has been estimated to see a growth from $2.5 billion in 1996 to over $3.6 billion by 2002.

"We see a renewed interest in transmissions as investors come to realize that this segment is not going to go away," Moran said. "A vehicle will always need a transmission to change the power of the engine into movement. The technology involved might change, but the need for service will never go away. This isn't a trend - it's a reality."

Moran Industries, founded in 1990, has created a family of services that meet all of America's automotive aftermarket needs. Moran Industries has created a unique and dynamic franchise system that has established itself in the forefront of the Franchising industry.