Canadian auto service returns to ‘normal’ size, market share

by | Sep 7, 2023 | 0 comments

Canada’s auto service market has returned to a pre-pandemic level of $9.1 billion this year–down from $10.9 billion in 2022–in what can be seen as a return to normal service activity by Canadians.

That according to the J.D. Power 2023 Canada Customer Service Index—Long-Term (CSI-LT) Study, released. The study, which measures usage and satisfaction of service shops for vehicles that are 4 to 12 years old, also finds that customers in Canada are paying more for maintenance and repair work than a year ago.

“We saw the marketplace return to a more stable footing, more of an historical norm,” J.D. Ney, automotive practice lead at J.D. Power Canada, told Indie Garage. “If you recall from 2021, you know the overall market really cratered in terms of its overall value.”

Market volumes dropped during the period to the mid-$6 billion territory as enforced closures and lockdowns took hold, and then, says Ney, there was a strong rebound in 2022 to more than $10 billion, overshooting expectations based on historical norms.

“That was due, frankly, to just a lot of unperformed maintenance and repair work combined with people just holding onto their vehicles for a little longer because they were driving a little bit less,” adds Ney. That translated into higher average repair orders and an increase in service occasions.

With 2023 comes a return to a more normal state of affairs in terms of activity, though notably the impact of inflation has helped drive up average repair orders.

According to the study, the average cost per visit at a dealership is $432, up from $394 in 2022, while the average cost per visit at an independent shop is $262, an increase of $15 from a year ago.

“Inflation has certainly had an effect on automotive service,” said Ney. “Average spend per service visit is up year over year at both dealerships and aftermarket facilities—yet the number of service visits is down. While the pandemic caused a decline in service visits and revenue, the market has rebounded strongly. Now, we’re seeing a return to pre-pandemic levels for service on 4- to 12-year-old vehicles.

“It’s not great news for the aftermarket unfortunately,” Ney told Indie Garage. “What we’re seeing is that while the aftermarket did very well from a market share perspective in 2021 and a little bit better at least compared to historical norms in 2022, this year the new car dealers retained 61% of the dollars involved in the marketplace. And that gets them back on trend with where they were performing pre pandemic.

“Year over year, that’s a shift of three percentage points in favour of dealerships. That three percentage points represents about a quarter of a billion dollars that have migrated out of the aftermarket and towards the new car dealers.”

What’s driving service activity choices

“Why people select the repair channel that they pick, there’s some interesting differences there,” Ney said to Indie Garage.

“Dealers obviously hold an advantage when it comes to past experience with either the sales department or the service department, or certainly for warranty work. That’s where they do really well there when we ask people, “Why did you choose to bring your car there?”

“To be clear, the aftermarket locations do well in terms of past experience as well, but where they really differentiate–at least compared to dealerships–is recommendations and word of mouth. Many more Canadians choose an aftermarket location based on a recommendation from friends or family or coworkers than they would choose a dealership. So it points to the real necessity among aftermarket locations of providing top-notch level of service so that it generates that word of mouth.

“It’s, frankly, much more important those shops than it is for dealers,” who enjoy a somewhat “captive” market, says Ney.

He urges aftermarket shops to be forward thinking in how those recommendations can be expressed and communicated.

“Nobody even goes to a restaurant anymore without checking out the [online] reviews beforehand. And so as customers migrate out of the warranty years of their new vehicle, the first stop is always looking at Google reviews of shops in their town, in their city, or in their neighborhood. Managing your online reputation is just as important as that face-to-face reputation.”

Following are some key findings of the 2023 study:

  • Of the $9.1 billion total market revenue this year, dealerships have grown their overall share of the market to 61% in 2023 from 58% in 2022. That incremental 3 percentage points of market share translates to more than $250 million in revenue.
  • Dealerships also have experienced an increase in the number of average annual visits to 1.7 from 1.5 a year ago.
  • Doing it right the first time: When it comes to completing service work correctly the first time, aftermarket facilities continue to outperform dealerships. Aftermarket facilities correctly complete service work the first time 95% of the time—unchanged from 2022—while dealers’ success rate is at 93%, revealing a continuing decline from 2022 (94%) and 2021 (96%).
  • Drivers of dealership and aftermarket business vary: Nearly two-thirds (61%) of owners who chose a dealership over an aftermarket facility cite previous experience with the dealership as the main reason. Convenience of location (42%) and recommendation from friends and family (23%) are key motivating factors for choosing an aftermarket service facility.

Study Rankings

Lexus Dealerships and Volkswagen Dealerships rank highest in a tie in the dealership segment, each with a score of 842. This is the second consecutive year that Lexus Dealerships ranks highest. Toyota Dealerships (815) ranks third.

Jiffy Lube ranks highest in the aftermarket service segment, with a score of 818. Great Canadian Oil Change (809) ranks second.

The Canada Customer Service Index—Long-Term (CSI-LT) Study measures service usage and satisfaction among owners of vehicles that are 4 to 12 years old and analyzes the customer experience in both warranty and non-warranty service visits. Overall satisfaction is based on five factors (in order of importance): service quality (32%); vehicle pick-up (20%); service facility (17%); service initiation (16%); and service advisor (15%). The study is based on responses from 8,188 owners and was fielded from April through June 2023.

For more information about the Canada Customer Service Index—Long-Term (CSI-LT) Study, visit


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