Wednesday, November 8, 2017

Why Carl Icahn feels this about auto repair serv....

Middletown NY-
Carl Icahn was a topic in a recent Bloomberg article by David Welch where Welch cites Icahns reasons for bets on his investments. We have high regard for the knowledge of and expertise of both.  https://www.bloomberg.com/news/articles/2017-11-08/carl-icahn-the-car-guy-why-he-bets-on-hertz-lyft-and-pep-boys
One of those bets is how Icahn Enterprises is buying up small mom and pop shops to make them into chain stores to service self driving fleets for self driving car owners such as Lyft drivers. Carl presumably states that he needs chain stores to service the fleets and check them for mechanical breakdowns. His thinking is that diagnosing these vehicles will require expertise.
What went wrong? 
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Industry experts, automotive trainers, and specialists all know that this strategy has a hole in it. Why? Local repair shops have always done much better at diagnosing difficult electrical problems and repairs than chain stores. While locally owned mom and pops may participate in franchises such as Goodyear and AAA Repair centers, when there is a local expert who also owns it the wealth of knowledge and experience is far greater than what is typically found in any chain store.
A large department store is an example of this, they struggle to maintain an age of professional technicians who have the knowledge to properly repair any vehicle. There are many, but suffice to say any reader who actually gets their car fixed knows that local mom and pop repair shops are far better than chain stores at fixing cars and in most cases lower priced and better value in many ways than car dealers as well. 
The reasons are vast and many but think about it this way - a mom and pop repair shops sees more complex problems due to age, and mom and pop repair shops typically have a average vehicle age of their customer base in the 10 year range and over 150,000 miles. New Car dealers typically see 5 to 7 year ages and less than 100,000 miles. Chain stores with young teams typically have little experience or desire to understand complex difficult problems and lack the experience to deal with or diagnose them. Your local mechanic has literally seen it all and given the time will figure it out at a lower overall cost to restore the system. They also focus on properly restoring the car so problems are completely repaired. Where as chain may be incentivized to make targets and bonus over output. Its understandable to see that large companies are focused on making money, as large investors want the maximum gain possible.

These opinions are expressed by the writer of this article and may not be those of the company mentioned herein.

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