How dealers are moving to compete with the aftermarket

In an ongoing effort to attract more older vehicles — typically those in the aftermarket sweet spot — dealers are getting more creative in their pricing, according to a recent report.

In a strategy that it says has “gained momentum” since the Great Recession of 2008 and the COVID-19 pandemic, dealers are embracing their ‘all-makes, all-models’ strategy, and offering alternatives to OE parts

“This allows dealers to be more price competitive with independent (non-dealer) service outlets in the rapidly expanding do-it-for-me (DIFM) market,” Lang Marketing said in its report, Dealers Tweak Repair Pricing to Up Bay Biz.

This comes as the average vehicle age in Canada and the U.S. has increased in recent years. In Canada, average age has grown from 9.7 years in 2020 to 10.5 in 2024. In the U.S. over the same time, average age moved from 11.9 to 12.6.

This shift also aims to support a broader range of vehicle nameplates in service bays.

To appeal to a diverse customer base, dealers are adopting a ‘good, better, best’ parts selection strategy, as the aftermarket does. But here’s how they break down each category:

• Best Parts: OE brands used for newer models and dealer-sold nameplates.
• Better Parts: OE-supplier brands, often matching OE quality, used selectively for competitive pricing.
• Good Parts: Aftermarket brands, offering affordability for older vehicles and different nameplates.

Additionally, some dealers are offering lower labour rates for servicing older vehicles, making their services more competitive with independent repair shops.

As the used vehicle market is significantly larger than the new vehicle market, dealers are increasingly using non-OE brands to refurbish used vehicles. This strategy has contributed to dealers gaining a larger share of the DIFM market over the past five years, often at the expense of independent repair shops.

Looking ahead, Lang noted, these adaptations present growing opportunities for manufacturers and distributors of OE-supplier and aftermarket brands. As dealers continue to expand their use of non-OE brands, they offer a promising customer base, potentially offsetting declining sales in the independent repair sector.