Canadian Aftermarket Growing: Report

The Canadian automotive aftermarket is growing steadily, according to the 2005 Outlook Study released by the Automotive Industries Association. “We aren’t surprised that the study shows that the dollar size of the Canadian automotive aftermarket continues to see steady growth,” remarked Ray Datt, President of AIA Canada. “In comparison to other sectors, the aftermarket is nearly equal in size to the clothing sector and larger than the furniture sector. The average Canadian may not realize it but we have a big impact on the Canadian economy and Canadian employment.”

Total direct employment in the automotive industry in Canada in 2004 is up 1.9 percent over 2003 levels. Aftermarket employment saw an increase of 3.5 percent over 2003. The aftermarket remains the largest single sector in terms of employment representing 43.9% of total automotive industry employment. An alternative perspective on the importance of the aftermarket in Canada can be gained by examining retail sales data. The Study indicates the aftermarket at over $15.8 billion in 2004, an increase of 2.2 per cent over 2003. The number of import nameplate vehicles on the road in Canada continues to grow. In 2003, they accounted for 32.1 percent of the total fleet, and they are expected to reach 38.3 percent market penetration by 2008. The increasing market share of import nameplate vehicles, offers an opportunity to the traditional aftermarket. The industry has historically underperformed in this market segment and has substantial opportunities to grow. The Canadian market continues to be primarily an installed market with the majority of work being completed by professional service outlets. Overall installed work has increased over a ten year period reaching 66 percent in 2004. The DIFM (do-it-for-me) side of the aftermarket stands to benefit as increased vehicle complexity as well as consumer time availability contribute to the demand for professional service. The study is compiled using a variety of secondary and primary research, including personal interviews and input from AIA members. The AIA Outlook Study is published biennially by AIA.