Auto Service World
News   November 26, 2015   by Allan Janssen

AAPEX show celebrates strong aftermarket growth

With vehicle sales up and more miles being driven, continued growth is predicted for next year.

AAPEX-2Industry watchers at an upbeat AAPEX trade show in Las Vegas in November called for continued automotive aftermarket growth in 2016.

Both David Portalatin of NPD Group and Mark Seng of IHS Automotive noted strong aftermarket growth in 2015, and predicted more of the same next year.

Portalatin started out his annual “Aftermarket Outlook” presentation by asking attendees how many had a better year in 2015 than in 2014.

Mark Seng of IHS Automotive

Mark Seng of IHS Automotive

“Yeah. How ’bout that?” he said. “Wasn’t that nice for a change? 2015 turned out to be pretty darn good.”
He said the combination of increased miles driven and strong retail price increases in a wide assortment of automotive products have put 2015 on track for 4.4% growth over 2014.

The forecast for 2016 is a 2.7% increase.

Looking at a number of market trends, he told the room of mostly jobbers, “I think there are some interesting things going on that are definitely going to create opportunity for you guys to grow your business in 2016.”

Seng, the global aftermarket practice leader for IHS Automotive (formerly Polk) agreed with that assessment, starting his presentation on “Five Key Trends” by saying, “There are some really great trends for the automotive aftermarket.”
The five trends he identified were 1) light vehicle sales nearing record levels in the U.S.; 2) continuing vehicle mix shifts as consumer preferences change; 3) an evolving aftermarket repair “sweet spot” as average vehicle age continues to grow; 4) growing OEM reliance on global “mega-platforms”; and 5) accelerating vehicle complexity as we move ever closer to autonomous vehicles on the road.

Seng said strong light vehicle sales – expected to break 17 million units this year for the first time in 10 years – do not pose a threat to the aftermarket.

“Think of it as your business pipeline,” he said. “Any time you’re adding vehicles to the fleet, that’s more opportunities for repair going forward. So it’s a great trend.”

The forecast peak is new-car sales is expected to be 2017, with about 18.2 million units sold.

It is evidence, he said, that the U.S. recovery is increasingly driven by “wants” rather than “needs.”

AAPEX-3Compact utility vehicles (CUV) are expected to dominate growth in the U.S. over the next few years. Similarly, consumers are expected to show strong preference for compact vehicles and imports.

As the average age of the U.S. fleet increases – it now stands at 11.5 years – independent automotive repair shops may start seeing much older cars than they’re used to seeing, he said.

“I think we have to look at the sweet spot differently. We’ve been defining it the same way for 20 or 30 years,” he said. “I think we’ll see more of our repairs from older vehicles. In my view, this trend is a great one for the independent aftermarket.”

He said rapid evolution in global automotive production poses some interesting challenges to the aftermarket. At the very least, it will require a dedication to training and research to stay on top of technological trends.

“We have to adapt to a whole new environment. It gives us a chance to do what we do best in the aftermarket, and that’s adapt and innovate and come up with new ways to serve this new generation of vehicles,” he said.

The trends bring opportunities as well as challenges.

“The key is understanding what’s coming, knowing that it is coming and getting ready to react to it,” he said. “If you do that you’re going to be successful going forward.”

The annual Automotive Aftermarket Parts Expo (AAPEX) show and the related Specialty Equipment Manufacturers Association (SEMA) show drew well over 100,000 automotive professionals from all over the world.



Print this page


Have your say:

Your email address will not be published.