Overall research shows some pretty tepid increases for both parts and service in the fourth quarter, according to TLG Research. In talking with service repair centers, TLG says many are seeing modest growth and do not want to be the first to raise prices at the risk of driving away business. Parts manufacturers inform TLG that there continues to be pressure on pricing, and all the way through the channels. As market power consolidates further at all levels, one would expect price increases may be restrained, according to TLG.

“For 2011, it appears that there will be significant upward pressure on pricing,” says Tom Langer, founder of TLG Research. “Basic commodities are increasing relative to increasing demand and currency exchange issues given the fluctuation in exchange rates. This will put tremendous pressure in the system to raise prices in the coming year. Manufacturers, distributors and service repair centers alike are all operating at reduced margins so any inflationary push will be felt immediately dollar for dollar. Service repair centers are also becoming very aware of their need to improve both bay productivity and a fair rate of return for their bay capacity. In our opinion, 2011 will be a crucial year providing many challenges for pricing.”