TABLE OF CONTENTS Dec 2012 - 0 comments

A WARM OUTLOOK FOR A COLD WINTER

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By: Andrew Ross

It might take a robust set of booster cables to jump-start the optimism of business owners who are still waiting to see evidence of the economic recovery, but the fact is that every indicator is pointing upward for the coming months and years for the aftermarket.

The just-released Automotive Industries Association of Canada’s Outlook Study is certainly among the attention-getters:

“The overall size of the aftermarket is expected to increase by 3.5% annually, from $19.4 billion in 2011 to $22.2 billion in 2015. On the other hand, the rate of growth for installed labour is anticipated to reach 4.2% annually, partly due to anticipated shortage of skilled labour over the upcoming years,” say DesRosiers Automotive Consultants, authors of the study.

Those are pretty solid numbers. And, looking deeper, there’s even more good news down the road.

“Due to heightened levels of new vehicle sales from 1997 to 2008 and improved vehicle reliability, the proportion of vehicles in the 6-7-, 8-11- and 12-14-year-old age segments has grown tremendously. The growing size of the number of vehicles in these prime maintenance years will translate to a larger potential market size for the aftermarket industry over the next several years.”

The expected rise in vehicles in the installed aftermarket’s “sweet spot,” seven to 11 years old, won’t go unnoticed by aftermarket professionals. But demographics aside, there is another forecast that can be expected to generate some real returns in the near future.

Enter a recent letter by BB&T Capital Markets, which provides ratings and analysis for stocks. It offered its overall assessment of the 2013 U.S. market.

“With recent temperatures trending below seasonal averages, we appear to be kicking off what could be a much colder winter than last year’s record-breaking warm season. In conjunction with expected increases in Q4 miles driven due to declining fuel prices and higher forecasted holiday travel, we believe early ’13 aftermarket demand is positioned for a rebound in increased failure rates and seasonal product demand.”

The analysis went on to say that it expects the upswing to be regional, as those areas that have been doing well all along, the southeastern regions and west-coast U.S., won’t see the rebound expected in areas that have endured softer market conditions.

I hesitate to guarantee that we’re going to be socked in this winter, but I will suggest that you be at least prepared if (or when) bad weather arrives.

I can certainly understand the tendency to keep inventories lean, especially as the year winds down, but too often over the years I have heard tales of jobbers coming up short and missing key opportunities.

And you can miss big. The fact of having pent-up demand that was not unlocked by a mild winter last year – and a not-so-hot-summer for many this year – is that many systems are on the verge of failure. And when that car ends up in the bay, the jobber, or the dealer, that can provide the parts right away wins big. Everyone else will be left wanting – probably forever, as far as that specific vehicle is concerned.

On any given vehicle, you get one or possibly two chances at an alternator replacement. One chance at a heater core. Maybe two chances at a battery. Maybe one chance or two for hoses. The same for suspension parts and many other categories.

Once they’re replaced this winter, you and your customers may never see that car again.

Make sure you don’t miss out.—Andrew Ross, Publisher and Editor

BEST WISHES AND A SPECIAL THANK YOU

A special thank you from all of us to the many industry professionals who have made what we do at Jobber News possible: Those whose names and wisdom have appeared in articles, those whose advertising decisions have kept our printing presses and Web presence rolling, and others who have simply taken the time to offer us their knowledge and perspectives on the industry that keeps us informed.

Thank you, and here’s wishing everyone a safe and happy holiday season and a great year ahead.



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