First Weeks of Session Bring Quick Action on Federal Tax Conformity, Sets Table for Budget Bills

The 2023 legislative session is off to a fast-paced start. For the first time since 2014, one party, in this case, the DFL controls both legislative bodies and the Governor’s office. DFL leadership has identified its key priorities and has begun to move on some of them. The most bipartisan of these priorities is tax conformity (aligning federal and state tax policy), with committees hearing legislation during the first week of the session. The tax conformity legislation has flown through the process and already passed the House and Senate floors and was signed by the Governor during the second week of the new session.

More controversial issues getting early traction in the committees include: codifying the right to abortions, legalizing adult-use marijuana and amending the state’s renewable energy goals to accelerate the transition to carbon-free energy sources. Other key priorities that will be front and center include a new paid family and medical leave program, exempting taxes on social security and

by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists

investments to address the rising costs of child care. Also, expect a bonding bill and significant investments into education, health and human services and housing, given the record-breaking $17.6 billion surplus.

AASP-MN will again be advocating for legislation requiring insurance companies to accept or deny claims within three days. This year, the proposed legislation includes a penalty provision. If insurance companies do not adhere to the three-day requirement, they must pay a daily storage fee to shops. AASP-MN is also considering additional legislation and will monitor and support legislation that advances workforce development priorities in the auto repair industry, such as tuition reimbursement or tax credits, to name a few.

Incoming legislators include almost a third who are newly elected. There are also new chairs in some of the industry and AASP-MN’s key committees including continued on pg. 9

In Memory: Rich Udenberg

It is with great sadness that we announce the unexpected passing of long-time member and former board member Rich Udenberg of Cannon Auto Repair, Cannon Falls.

Rich began his career in the automotive repair industry in 1976, when he was hired as a detailer and oil change technician at a local dealership. In a few short years, he became a GM-certified master technician. After 20 years in the dealership environment, Rich went to Zumbrota Bearing & Gear, where he learned the ropes of transmissions and differentials. In 1999, he took a job at Cannon Auto Repair as lead technician and, in 2002, purchased the business.

Cannon Auto Repair has been a member of AASPMN since 1994. Rich was active on the Mechanical Advisory Committee from 2008-2012 and served on the association’s Board of Directors from 2009-2012. He was an active member, participating in many AASP-MN conferences, programs and events through the years. Rich and his crew also participated in the Race for Automotive Education for the past several years.

We extend our condolences to his wife of 34 years, Jan; his daughter Ashlan and son-in-law Toby Kaplan; grandchildren, Lincoln and Sophia; his dog, Bear and other family and friends.

Member Recruiter of the Year Award

The Alliance is pleased to announce Tom Archambault (BLVD Autoworks; St. Anthony) has won the 2022 Member Recruiter of the Year contest. The award honors members who recruit or provide leads for prospective members to the Alliance. Tom recruited one member in 2022 and will be recognized April 5 during the Annual Meeting & Leadership Conference for his efforts.

“Members are the best advocates the Alliance has. Their stories of success based on what they get out of membership is the most genuine sales pitch there is,” said Linden Wicklund, AASP-MN Executive Director.

The Member Recruiter of the Year award is based on a point system: five points are earned for new member recruits and two points are earned for referrals. The member who accumulates the most points throughout the year receives the award.

To learn more about the Member Recruiter of the Year program, contact the AASP-MN office at (612) 6231110 or aasp@aaspmn.org.

AASP-MN’s Automotive Scholarships Up for Grabs

The Alliance will be awarding scholarships to select students enrolled in post-secondary automotive (auto service or collision repair) programs. Scholarship awards will be $500 - $1,500 per student and can be applied toward tuition or tool purchases.

Applicants must be enrolled in a Minnesota-based ASE-accredited automotive program in the fall of 2023. Applications will be reviewed by a committee of industry representatives, with consideration given to scholastic achievement, education, career goals, financial need and written recommendations. Applications must be submitted electronically or postmarked no later than March 31, 2023.

Applications can be downloaded from the Alliance’s website, aaspmn.org/scholarships/ or submitted online at automotivescholarships.com/scholarships/alliance. Online submissions give students the opportunity to compete for several different awards, including those offered by the University of the Aftermarket Foundation Scholarship Committee and over 40 other automotive aftermarket organizations and companies. Specific requirements for each organization’s awards can be found at automotivescholarships.com

The Automotive Education Fund was established in 2002 to provide financial resources to support automotive students, enhance automotive programs and raise awareness of career opportunities in the independent automotive service industry. Since that time, nearly $310,000 has been invested in student scholarships, SkillsUSA and automotive education programs throughout the state. In 2016, AASPMN’s efforts to attract a future workforce expanded significantly with the creation of Minnesota Careers in Automotive Repair and Service (MNCARS), a statewide marketing and outreach initiative to encourage high school students to pursue an education and career in the automotive service and collision repair industry. Visit carcareers.org to learn more.

Minnesota Careers in Auto Repair & Service (MNCARS)

MNCARS is a nonprofit organization established in 2016 by AASP-MN. Its sole purpose is to promote careers in the automotive industry, recruit young people into the state’s collegelevel automotive service and collision repair programs, and, ultimately, into industry workplaces.

• MNCARS has been running a successful program called Adopt-a-School over the last handful of years and is now expanding the program to reach even more schools! Instead of selecting two schools to focus on, MNCARS now invites all schools to come forward with requests for support. This could mean asking for tools, cars to work on, materials, or volunteer expertise and time. Reach out and let us know if there is a school near you that could use some MNCARS support!

Take advantage of the resources in the MotorMouth toolbox at carcareers.org/motor-mouth. Get out and get active in your local community promoting industry careers!

Sponsorships Available for AASP-MN Annual Meeting & Leadership Conference

Vendor sponsorships are now available for the AASP-MN Annual Meeting & Leadership Conference, April 4 and 5, 2023, at Minneapolis Marriott Northwest, Brooklyn Park. The event will feature management education and social activities that provide opportunities to learn, meet and get to know AASP-MN members and other industry professionals.

Vendor sponsors are rewarded by increased visibility and recognition within the AASP-MN membership and industry at-large. It’s a great way to stand out, expand marketing dollars and connect with the best shops in the industry.

If you are interested in becoming a vendor sponsor at this year’s event, please contact the AASP-MN office at (612) 623-1110 or aasp@aaspmn.org

2023 Membership Dues Are Due!

If you have not yet paid your 2023 membership dues, PLEASE do so today. Your timely payment will save AASP-MN the additional cost and time incurred with re-billing and other collection efforts. We’d much rather be working on programs and initiatives to improve the automotive service industry – and your business. Thank you!

Year-Long Sponsorships Support AASP-MN’s Educational Programs & Other Activities in 2023

Recently, AASP-MN asked for year-long sponsorships from its Associate members and other industry vendors to help support educational programs and other activities in 2023. Sponsorships help AASP-MN deliver the quality programs members expect and keep registration fees affordable.

To date, the following companies have made sponsorship commitments:

Platinum Sponsors

LKQ Minnesota

Lube-Tech

Gold Sponsors

Auto Value / Benco

CBIZ

FinishMaster

ShopMonkey

Silver Sponsors

Aramark

Axalta Coating Systems

Colonial Life

Heartman Insurance

O’Reilly Auto Parts

PPG Automotive Refinishes

United Fire Group

Bronze Sponsor aaa Auto Parts

Auto Value / Benco

C.H.E.S.S.

Dentsmart PDR

Radco

$30 Billion DIFM Surge After COVID-19

Parts and Labor volume of the Do-It-For-Me (DIFM) light vehicle market surged by $30 billion during 2021 and 2022, at user-price, following the 2020 onslaught of COVID-19. This historic rebound was not evenly distributed among the seven major groups of light vehicle DIFM outlets.

Four of the seven groups of outlets generated more than 85 percent of the DIFM Parts and Labor surge over the past two years. Additional analysis of this DIFM rebound and the performance of each of the seven groups of DIFM outlets will be reported in future Lang iReports. A full analysis of the 2022 DIFM market will be completed in several months.

DIFM Parts & Labor Surge

The $30 billion rebound of Parts and Labor (Purchased Service) volume over the past two years is the largest surge ever recorded by the light vehicle DIFM market in the U.S.

It reflects the strength of the DIFM market and the pent-up demand for aftermarket Parts and Labor following the onslaught of COVID-19, which blasted a double-digit decline across the 2020 DIFM market.

Biggest DIFM Outlet Winners in 2021 and 2022

Three factors forged winners and losers among DIFM outlets: the evolving mix of foreign and domestic nameplates on U.S. roads, the growing technical complexity of light vehicle repair and the changing competitive strengths of DIFM outlet groups.

Four outlet groups generated over 85 percent of the $30 billion DIFM volume surge (Parts and Labor) during 2021 and 2022: Repair specialists, vehicle dealers, service stations and garages and foreign specialists.

Repair Specialists

Repair specialists (outlets focusing on a limited array of vehicle repairs) accounted for approximately 29 percent of the $30 billion Parts and Labor surge during 2021 and 2022.

Lang Marketing estimates that repair specialists added more than $8.5 billion in Parts and Labor sales during these two years over 2020 levels.

Most of this gain was the result of repair specialists expanding their repair scope, coupled with their growing foreign nameplate repair.

Vehicle Dealers

Vehicle dealers rang up nearly a $7.6 billion increase in Parts and Labor volume during 2021 and 2022.

This was the second largest gain of any DIFM outlet group and accounted for 25 percent of the $30 billion surge in DIFM sales.

Foreign nameplate dealers generated most of the repair growth (Parts and Labor) by vehicle dealers during 2021 and 2022.

Service Stations & Garages

Despite their diminishing population and market share, Service Stations & Garages ranked third in Parts and Labor growth during 2021 and 2022, topping a $5.0 billion gain.

Despite their loss of Parts and Labor share, Service Stations & Garages accounted for nearly 17 percent of the increase in DIFM volume during these two years.

Foreign Repair Specialists

Foreign repair specialists (outlets focusing on the repair of foreign nameplate cars and light trucks) were fourth in Parts and Labor gain during 2021 and 2022, up by nearly $5.0 billion. They generated almost 16 percent of the total DIFM rebound.

Their small population limited foreign specialists to fourth place in 2021 and 2022 Parts and Labor growth, but they rolled up the largest percentage increase in DIFM volume during these two years.

Other DIFM Outlets with Growth

Tire stores were fifth in Parts and Labor growth during 2021 and 2022, up $2.5 billion and accounting for over eight percent of total DIFM market growth. Discount stores/mass merchandisers with bays added $1.5 billion in Parts and Labor volume during 2021 and 2022, as they represented just over five percent of the $30 billion surge in DIFM Parts and Labor during these two years.

DIFM Outlets Losing Ground

Auto parts stores with bays declined in their share of 2021 and 2022 car and light truck DIFM Parts and Labor sales.

Despite the marketwide surge in DIFM Parts and Labor volume, auto parts stores with bays remained flat in light vehicle DIFM sales during these two years.

Labor Leads in DIFM Growth

Car and light truck parts accounted for approximately 47 percent of the 2021 and 2022 DIFM volume increase, while Labor (Purchased Service) represented about 53 percent of the estimated $30 billion DIFM rebound, at user-price.

Six Major Takeaways

• Light vehicle DIFM volume (Parts and Labor) surged by $30 billion during 2021 and 2022, at user-price, rebounding from the onslaught of COVID-19, which sent a double-digit plunge through the 2020 DIFM market.

• Repair specialists accounted for the largest share of the Parts and Labor rebound during 2021 and 2022, soaring by approximately $8.5 billion in DIFM sales.

• Vehicle dealers ranked second in the 2021-2022 DIFM rebound, expanding their Parts and Labor volume by an estimated $7.6 billion at user-price.

• Service stations and garages ranked third in the DIFM surge over these two years, topping a $5.0 billion Parts and Labor increase.

• Foreign specialists were fourth in the Parts and Labor rebound following the downturn in 2020 product volume caused by COVID-19, up nearly $5.0 billion over the past two years.

• Repair specialists accounted for over 29 percent of the spike in Parts and Labor volume during 2021 and 2022, followed by dealers at 25 percent, service stations and garages at 17 percent, foreign repair specialists at 16 percent, tire stores at eight percent, and discount stores/mass merchandisers with bays, recording a five percent growth share.

Legislative Update

continued from pg. 5

Senate Commerce and Senate and House Taxes. New leadership and committee rosters provide an excellent opportunity to educate chairs and members on some of the issues most important to AASP-MN members. AASP-MN is meeting with the chairs in the coming days and weeks to help advance our legislative agenda. We look forward to connecting AASP-MN members to their respective legislators on key committees to help advance impactful legislation and give elected officials an insight into members’ experiences.