The automotive aftermarket is reporting a positive trend in sales growth among retailers, with significant optimism for 2024.
DesRosiers Automotive Consultants collaborated with Automotive Aftermarket Retailers of Ontario members to unveil insights into the performance of the Canadian automotive aftermarket in 2023, alongside predictions for the year ahead.
“In recent years, the automotive aftermarket had maintained strength even as significant portions of the auto industry witnessed significant setbacks,” observed Andrew King, DesRosiers managing partner. “Despite lingering parts availability and pricing issues, the aftermarket saw significant success in 2023 with more growth expected in 2024, this time in step with a recovering new light vehicle sales market.”
The survey’s findings indicate that members saw 2023 as a year of growth for the sector, with half of respondents reporting a sales increase of one to 10 per cent. Another 37 per cent witnessed growth exceeding 10 per cent.
A small number of aftermarket outlets (12 per cent) said they saw a decline in sales, with just 2 per cent observing no change. When comparing current sales to pre-pandemic levels, 60 per cent of retailers reported that they’ve seen an increase, while about three in 10 (29 per cent) stated that sales today are similar to those before the pandemic.
Looking forward to 2024, the majority of retailers (69 per cent) anticipate single-digit sales growth. A small 8 per cent are optimistic, expecting sales to rise by more than 10 per cent. Among other predictions, 12 per cent expect stable sales for the year ahead, though 10 per cent are bracing for modest declines. Only 2 per cent foresee a significant drop.
The survey also highlighted ongoing parts supply challenges from both jobbers and new vehicle dealers, albeit with some improvement noted over the year. While 67 per cent of retailers faced supply issues from jobbers in the first half of 2023, this number dropped to 52 per cent for the year.
Additionally, retailers reported a noticeable increase in parts prices in 2023 compared to the previous year, with over half of the responses indicating price hikes of 6-10 per cent from both jobbers and new vehicle dealers. Despite the clear inflationary pressures, DesRosiers noted, there was a slight easing in the rate of price increases from the early to later parts of the year.