The sweet spot for the automotive aftermarket has expanded — and will be reaping benefits dealerships enjoyed just a few years ago.
This sweet spot was generally vehicles between six and 10 years old and maybe even as high as 12, depending on to whom you talked. But the tail end of it should now be at least 13 years, and possibly growing, according to Todd Campau, automotive aftermarket practice lead at S&P Global Mobility,
He reported at AAPEX that the average age of a vehicle in the United States is 12.2 years. That means there are many vehicles older that require aftermarket service.
And this age group is going to swell in numbers. It was between 2015 and 2019 that new vehicle sales were the highest they’ve ever been. That’s true for both Canada and the U.S. — Canada saw more than two million new vehicle sales in 2017, with more than 1.9 million in the year before and the two years following.
“We’re starting to reap the rewards of all those vehicles coming into the aftermarket sweet spot,” Campau said. “I think the sweet spot for us and the really old vehicles are going to be a great opportunity for the aftermarket for at least the next five years.”
The average age of vehicles is driving upward thanks to consumers opting for light trucks over passenger vehicles.
Light trucks have a longer lifespan than passenger cars. With more than three-quarters of vehicle sales these days in favour of light trucks, that means vehicles are lasting longer and they’ve bigger. That also means more and bigger components that would be in need of repair, helping boost aftermarket bottom lines.
If it feels like more automakers have been offering more options for light trucks, it’s because they indeed have been, said Campau during his 5 Trends impacting the North American Aftermarket presentation at AAPEX 2022.
Automakers around the world are selling fewer passenger vehicles. It’s actually helped the reputations of domestic manufacturers who were stigmatized by consumer beliefs that their vehicles didn’t last as long. Now that they’re offering more light trucks — from crossovers to pickups — the average age has increased.
“That same thing I think is happening with Asian vehicles. As more cars are leaving the Asian population, the more trucks are coming in — the trucks last longer,” Campau said 5 Trends impacting the North American Aftermarket presentation, adding that European companies see a similar effect.
But just how high could average age go? To answer that, Campau looked at pickup truck trends where the average age of those vehicles is 14 years.
“That’s probably a pretty good indicator because pickup trucks have maintained a pretty steady share of our marketplace for a lot of years. And their average age has stayed there at that 14 [year old] level,” he said.
That’s not to say average age will ever reach such heights across all segments but it is probably the high end, he added.