Aftermarket retail in a freefall? Not at all

The death of the aftermarket retail sector in Canada has been greatly exaggerated. Or, perhaps more accurately, quite wrongly predicted.

According to new data, aftermarket retail numbers didn’t just stay above water in the first half of 2021, they blew past highs of recent years.

Retail sales did predictably fall in the first half of 2020 as the global COVID-19 pandemic took shape. But according to DesRosiers Automotive Consultants, the first half of 2021 was an all-time high performer.

In its report Retail Sales Boom!, the group noted that “the aftermarket held up remarkably well in 2020, suffering a downturn that was far less than that seen in the new vehicle market. This performance came in stark contrast to the expectations of some non-auto industry-based consultants who, lacking an understanding of the aftermarket fundamentals, had predicted a freefall in the aftermarket.”

The first half of 2021 saw retail sales at Canadian automotive parts, tires and accessories stores hit about $5.5 billion. In 2020, that number didn’t reach $4.5 billion. None of the three prior year numbers even hit $5 billion.

Bruno Kelzer/Unsplash

Is inflation to blame for the jump? Not so, according to DesRosiers. Price hikes had a minimal effect as “CPI data for June 2021 shows that aftermarket inflation for parts and supplies has actually fallen in 2021 to a rate of only 0.4 per cent in June while inflation for repair and maintenance services has stepped up slightly to 2.5 per cent.”

In 2020, rates were 1.6 per cent and 2 per cent, respectively.

DesRosiers credits the boom in retail sales to Canadians getting out and driving.

“More driving creates more wear and tear which in turn creates more need for aftermarket parts and services,” the consultancy said.

Indeed, according to National Vehicle Kilometres Traveled Metrics – 2019 To 2021, the average daily vehicle kilometres travelled was 1.29 billion kilometres on Canadian roads during the second quarter of this year (from April to June). That’s the most in a quarter since the pandemic started. the World Health Organization declared COVID-19 as a global pandemic. The data prepared by StreetLight Data Inc. The report was released by the Automotive Industries Association of Canada.

“Overall, Canadians are driving their vehicles more than many would have expected under the circumstances and are therefore maintaining demand for aftermarket parts and services,” said DesRosier’s managing partner Andrew King in an announcement. “Aftermarket retail sales figures are remarkably strong and indicate notable strength in the Canadian aftermarket — the backbone of the Canadian automotive industry.”