Each year at the Automotive Aftermarket Parts Exposition in Las Vegas, R. L. Polk & Company reveals its latest list of five key trends affecting the automotive aftermarket.
As we reported in the March 2012 issue, much was made of the increasing popularity of the oil-change indicator light that is now being used on the majority of new vehicles.
Here’s Polk’s full list of trends:
1. OEMs are becoming more aggressive, as light vehicle sales more than recover.
Consumers have returned to the show room, says Mark Seng, Polk’s vice president of aftermarket and commercial vehicles. And that’s given carmakers a burst of energy and optimism that is amping up their dealer operations.
Final tally of light vehicle sales last year came in at 14.7 million units – a 13% year-over-year increase, and the third consecutive year of double-digit growth.
The expectation is that the industry will sell 15 million units in 2013, capping five years of industry recovery.
2. Age of vehicles continues to rise.
There are a growing number of vehicles on the road that are of an age that they’re likely to be repaired in the independent channel of the automotive aftermarket.
By the end of last year, the average age of vehicles stood at 11.3 years. Over the last 10 years, the life of passenger cars has increased by14%, light trucks by 17%.
“Vehicle quality of the vehicle is a big driver in that,” says Seng, “but this trend is really accelerating.”
He says consumer are hanging onto their cars. “In this economy, length of ownership has been increasing dramatically.”
Hand-in-hand with the age of vehicle statistics, are the scrappage statistics.
Over the last 60 years, the scrappage rate has come down by about 50 per cent, which has a huge impact on age of fleet.
3. Crossovers (CUVs) and midsize sedans are driving vehicle sales.
Crossovers have gone from 15% in 2007 to 25% of new car registrations in 2012. Midsize cars have gone to 20%. Together that’s 46% – a huge shift toward that size of vehicles.
These mid-size cars and CUVs give families the size they need, and a fuel efficient four-cylinder engine, which are more powerful than they were in the past.
That means four cylinder engines are definitely on the rise, up 20 per cent at the expense of other size engines.
Four-cylinder cars as a percentage of new vehicle registrations in the U.S. is up from 32% in 2007 to over 50% of all new vehicle registrations in 2012. Six cylinder are down 40 to 32%. Eight-cylinder vehicles are down 21% to 14%
In terms of Vehicle-in-Operation, the change is much less dramatic, but the trends definitely hold. You can see the six and eights start coming down in 2008/2009, coinciding with the recession.
There has also been a major shift from domestic vehicles to import models.
In 2010 there were more import cars on the road than domestics. They’ve only increased their position since then.
Trend is similar for trucks, though, in terms of vehicles on the road, domestics are much stronger.
Korean, European, Japan area all up; U.S.-built vehicles are down 8.5 per cent over past 10 years in terms of VIO.
This is important to the aftermarket, because of the need to keep track of shifting vehicle demographics, and type of engines. That will affect the kind of cars that are pulling into our shops in years to come.
4. Globalization of platforms and model families is accelerating.
The ongoing trend, seen over the last few years, is continuing. Carmakers are making more models on single platforms.
Global production of vehicles is expected to grow 44% over the next 10 years, to 114 million units globally. The expected growth in NAFTA countries is 7%, 9% in Europe, and 62 in Asia Pacific.
Globally, the 10 largest platforms now account for 24% of all vehicle manufactured. By 2023, that percentage is expected to rise to about 28%.
Largest global platform now is the Nissan B with 2.5 million units. By 2020, Polk expects it will be the Volkswagen MQB with 10 million units – four times larger.
This is important to aftermarket because it has a chance to reducing tooling and inventory costs. Understanding platforms is smart.
In the short run, parts proliferation will continue to grow. Over time, however, globalization of vehicle platforms is expected to result in reduced proliferation.
The automotive aftermarket is impacted by things like CAFÉ standards, telematics, and the decline in diesel-power compared to the rise in hybrid-power.
“We believe the aftermarket needs to be aware of these trends, and react to them. They bring their own challenges, but they also bring opportunity,” said Seng.
“The aftermarket needs to have properly trained technicians. The number of those alternative powertrains is relatively low, but for the first time ever, hybrids are on pace to outsell diesels in the U.S,” he said.
“We’re bullish on the aftermarket. We believe it has what it needs to win in the long run.’