From the Magazine: The aftermarket’s inflection point

Why vertical integration could be the next strategic lever for jobbers

The Canadian automotive aftermarket is entering a period of renewed complexity. Over the past 12-18 months, macroeconomic pressures have re-emerged with force: Rising inflation, cost-of-living strain, geopolitical uncertainty and supply chain volatility.

These pressures are once again working their way through the value chain, most notably in base oil pricing, shipping costs and raw material inputs, driving upward pressure on parts and service pricing.

For consumers already facing affordability challenges, higher oil change costs, repair bills and parts pricing are no small matter. For jobbers and distributors, sitting in one of the most cost-sensitive and inventory-heavy segments of the industry, the impact is even more acute. The model has always been exposed to fluctuations in global supply chains, and today’s environment is testing its resilience once again.

Yet within this turbulence lies an inflection point.

Resilience and opportunity

Despite near-term pressures, the long-term fundamentals of the automotive aftermarket remain incredibly strong. The global vehicle parc continues to grow and age, providing a structurally supportive backdrop for the industry.

Consumers are holding onto vehicles longer due to high new-vehicle prices and economic uncertainty, directly increasing demand for maintenance and replacement parts. The average vehicle age continues to rise across North America and Europe, reinforcing a steady pipeline of service demand.

In parallel, new vehicle sales are plateauing in many developed markets, constrained by pricing and affordability challenges. The result: Repair, maintenance, and lifecycle extension are becoming the dominant consumer behaviours.

For jobbers and ASPs, this is not just stability; it is a multi-year growth runway.

Across Canada, many independent automotive service providers are approaching succession with no clear transition plan.

The workforce shift

At the same time, the broader economy is reshaping how businesses operate. Large corporations are aggressively managing operating expenses — streamlining teams, leveraging AI and driving productivity gains across their organizations. AI is already improving forecasting, diagnostics and decision-making across the aftermarket value chain.

This is contributing to a more uncertain labour market, with younger workers entering a changing environment while an aging workforce begins to exit. But within the automotive aftermarket, this shift creates a paradoxical advantage.

While many industries face displacement risk, skilled trades are gaining relevance. Vehicles are becoming more complex and require hands-on technical expertise that can’t be easily automated. Rather than replacing the trade, AI is enhancing it by supporting diagnostics, improving repair accuracy and increasing shop productivity.

The trade is becoming more valuable, not less.

And capital is taking notice. Private equity and institutional investors are increasingly viewing the aftermarket and the trades as a whole as a “flight to safety”— a stable, cash-flow-driven industry underpinned by non-discretionary demand.

Margin pressure in a fragmented ecosystem

Historically, jobbers have operated within a tightly competitive and fragmented landscape. The model is capital-intensive, requiring significant investment in inventory, logistics and working capital. Margins are constantly challenged by price competition, supplier dynamics, and customer concentration.

Most jobbers know the reality: 80 per cent of revenue often comes from the top 20 per cent of accounts. That concentration creates both dependency and vulnerability.

At the same time, upstream and downstream players have evolved their strategies. OEMs and large consolidated players have increasingly moved toward vertical integration by leveraging collision centers, dealer service lanes and affiliated repair networks to create closed-loop ecosystems that drive parts demand back into their own channels.

In contrast, much of the independent jobber network in Canada has historically avoided this path, largely due to one core concern: Competing with their own customers.

That concern, while valid, may now be outdated.

For jobbers focused on sustainability, succession and long-term growth, the question is no longer whether the industry will change. Because it already is.

Vertical integration as a strategic advantage

Today’s environment presents a different reality — and a different opportunity.

Across Canada, many independent automotive service providers are approaching succession with no clear transition plan. At the same time, the demand for service capacity is rising, and the trade is positioned for structural growth over the next decade.

This creates a window.

Jobbers are uniquely positioned within the ecosystem. They have:

• Established relationships with repair networks
• Local market knowledge
• Access to parts supply and pricing
• Scale advantages in procurement and logistics

Yet few are leveraging these advantages beyond distribution.

Vertical integration, when done strategically, does not need to be about competing with your best customers. Instead, it can be about:

• Preserving continuity when key accounts exit the market
• Investing in underserved service capacity in local communities
• Creating aligned ecosystems that protect and grow parts demand
• Building long-term enterprise value beyond pure distribution

The reality is that other segments of the industry have already embraced this model. Dealer groups, collision networks and glass providers routinely align parts, service and customer acquisition within integrated structures that reinforce margin and drive lifetime value.

The jobber system, by comparison, remains largely linear.

Economic pressures, workforce shifts, and evolving consumer behaviour are reshaping the industry — but they are also reinforcing its importance.

Think differently

For jobbers focused on sustainability, succession and long-term growth, the question is no longer whether the industry will change. Because it already is.

The question is how to respond.

Strategic planning in the jobber space has historically centred on incremental growth: Adding SKUs, expanding footprint, or improving operational efficiency. While important, these levers alone may not be sufficient in a structurally evolving market.

The next phase of value creation will come from thinking more holistically about the ecosystem:

• Where are the gaps in your local market?
• Which customers represent long-term strategic value versus transactional volume?
• What role can you play beyond distribution?
• How do you create a defensible moat in an increasingly competitive landscape?

Vertical integration is not the only answer, but it is increasingly becoming a cornerstone strategy for those looking to protect margin, diversify revenue, and build enduring businesses.

Final perspective

The automotive aftermarket has always been resilient. Today, it is also full of opportunity.

Economic pressures, workforce shifts, and evolving consumer behaviour are reshaping the industry — but they are also reinforcing its importance. Vehicles are aging. Technology is increasing complexity. Demand for repair and maintenance is growing.

For jobbers willing to evolve, this is a defining moment.

The next five years will not reward those who simply defend the status quo. They will reward those who see beyond it and who reimagine their role in the value chain and build strategies that align with where the industry is going, not where it has been.

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This article originally appeared in the July issue of Jobber News.

Zakari Krieger is the Fix Network, Canadian vice president of Prime CarCare, responsible for the Canadian retail business, encompassing the Speedy Auto Service and Novus Auto Glass business lines