Fast Lube / Auto Oil Change Service

The US automotive oil change and lubrication industry includes about 4,000 companies with combined annual revenue of $4 billion. Major companies include Jiffy Lube, Pennzoil 10-Minute Oil Change, Valvoline Instant Oil Change, and Texaco Xpress Lube. The industry is fragmented: the 50 biggest companies generate less than 40 percent of revenue. Fast lube operators, for the most part, are independent owners with one or two shops. Most companies operate a single location, with 10 employees and annual revenue of $600,000.

COMPETITIVE LANDSCAPE

Demand is driven by the amount of driving that consumers do and by new car sales. The profitability of individual companies depends on convenient location and good marketing. Large chains have an advantage in name recognition, but the operations of individual locations are similar. Small companies can compete successfully by owning favorable locations. Operations are labor-intensive: annual revenue per employee is just $60,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services are oil changes, installation of new oil filters, chassis lubrication, and preventative maintenance. Routine maintenance services like adjusting tire pressure, changing windshield wipers, replacing light bulbs, and topping off auto fluid levels, are usually done in ten minutes or less. Typically, more than 70 percent of revenue is from oil changes.

A typical location performs about 1,200 jobs per month. Most locations operate two to five bays in a drive-through building, and many use basement construction so that oil can be changed below while other services are being ...