Industry executives participating in the Virtual AAPEX Experience struck a positive note when asked to comment on the future of the automotive aftermarket on Tuesday.
In a session called “What to Expect on the Road Ahead,” aftermarket leaders shared a consistent message: that the automotive aftermarket continues to be resilient despite crisis.
“Compared to new vehicles, compared to most other retail sectors, the aftermarket sees much more stable demand. We are essential and we’re a great market to be in, rain or shine,” said Paul McCarthy, president, Automotive Aftermarket Suppliers Association (AASA).
“The aftermarket is forecasted to grow 11.7% in 2021 and is on its way to a market size of $341 billion in 2023,” said Bill Hanvey, president and CEO of the Auto Care Association.
The two leaders also discussed their respective association roles on several issues, including contributing to diversity, attracting talent to the industry and fighting for a fair and level playing field.
The keynote session also included an esteemed panel of industry executives who shared their views on the outlook for the aftermarket in this time of uncertainty.
Greg Johnson, CEO, O’Reilly Auto Parts, noted that in his 39 years, he has seen the industry remain very consistent and resilient throughout various economic changes. “I remain very optimistic,” he said. “The result of the softer car sales will help us; most people will continue to maintain their vehicles as opposed to buying new vehicles and I also see miles driven improving.”
From the manufacturer/supplier side, Duncan Gillis, CEO, BBB Industries, expects to see growth in aftermarket replacement parts. He said, “We are very bullish about 2021 … we’re fortunate that our industry is not like a lot of others. We are relatively recession resilient, and we need to take advantage of that. We’re in a great position, let’s go drive some business.”
When asked if the aftermarket will see permanent changes as the result of COVID-19, Sue Godschalk, president, Federated Auto Parts, noted that the e-commerce segment has largely outperformed the rest of the aftermarket recently as consumers are opting for more online delivery due to brick-and-mortar closures and to limit exposure to the virus. “I believe online ordering will continue to increase … I also think we’ll see more automation in the manufacturing and distribution centers and warehouses and I believe it’s going to continue to be hard to find workers,” said Godschalk.
Eric Sills, CEO of Standard Motor Products, said, “We’re a very stable industry, so even something as dramatic and unprecedented as this pandemic, I don’t think it’s going to cause any step wise permanent changes to our overall market and how business is done … There’s going to be some trends that either accelerate or decelerate, but no hard left turns as a result of this.”
Tom Greco, president and CEO of Advance Auto Parts, identified trends in the aftermarket that may have a mid-term impact for the foreseeable future, including that more people are repairing and maintaining their vehicles and more DIY, as well as the decline in people using mass transportation. “People will continue to order online and vehicle ownership is increasing in importance with people having more time to work on their cars,” said Greco.
Industry executives also weighed in on the growth in omnichannel and e-tailing and how the pandemic has challenged their leadership skills.