The automotive aftermarket fares better than most industries when inflation goes up and consumers look for areas to cut back on. But that doesn’t mean consumers aren’t looking for areas where they can save some dough when they need their vehicle repaired.
When inflation was on the rise during 2022, the NPD Group asked consumers where they would be cutting back. Of the 81 per cent who said they would cut spending, discretionary areas like restaurants, apparel and air travel and road trips topped the list.
Automotive, as is typical in these rankings, was near the bottom of the list for good reason.
“Obviously for people, [vehicles are] essential to daily life, and so that tends to find its way to the bottom,” said Nathan Shipley, executive director for The NPD Group’s automotive aftermarket practice.
Rather than cutting out spending on their vehicle, people look for ways to stretch their dollars — it’s all about spending power and how much bang they can get for their buck.
“I’m … pushing that maintenance occasion further or I’m seeking out cheaper alternatives when I’m shopping for products in this space, whether that be stepping down from a branded into a private label,” is the reaction from consumers, Shipley described at AAPEX 2022 during his Aftermarket Outlook 2023 presentation.
The aftermarket has seen prices jump across the board — up 35 per cent compared to 2019. But it’s even more striking for consumers who may only enter the space every few years to, for example, buy a new battery or tires.
“And so all the stuff, it’s three years later, you’re in buying whatever it is again, it’s a 35 per cent difference in price. It’s a bit of a sticker shock,” Shipley said. “And that right there is likely an opportunity for that consumer to say, ‘I’m going to step down, or I’m shopping elsewhere, look online maybe and start to do a little price shopping.’”