Is industry’s financial success sustainable?

AASA’s Paul McCarthy speaks at the group’s 2022 Vision Conference

The automotive aftermarket is seeing its bottom line perform at levels it never has before. But is this just a blip on the radar or can it continue beyond pandemic times?

While challenges lie ahead — gas prices being one where if they rise too high, people may opt to not drive their vehicles — one industry leader believes “transformational cultural shifts” are positive signs for the future health of the industry.

Paul McCarthy, president and chief executive officer of the Automotive Aftermarket Suppliers Association believes “we’re leaving the pandemic with a more auto-centric lifestyle than we went into it.”

Even with the increase in used vehicle sales and more vehicles in operation these days, McCarthy told attendees of the recent AASA Vision Conference in Detroit that he sees sustainable industry growth ahead thanks to de-densification, shifts in where people live and other cultural changes that are happening coming out the pandemic.

Notably, people are leaving big city centres and moving to areas that are more car-centric.

“We see it in consumers’ desire for more space,” McCarthy said, pointing to increased house prices as people move away from major cities. “Where most [people] now seem to want to live they need a car — or a third or a fourth car. They need us, the aftermarket.”

He pointed to miles driven. Driving levels are near or above what was seen before the COVID-19 pandemic started. And that’s with fewer people commuting to the office as work-from-home and hybrid working options expand.

Beyond that, the evolution of vehicles brings more opportunities to the aftermarket. McCarthy highlighted the greater number of entertainment options and connectivity possibilities in new newer vehicles these days.

“We should expect greater demand moving to a new demand curve,” he said.

The supply chain is another challenge that continues to persist. Still, “we believe that this is an exciting time to be in and that we are a very exciting industry to be in,” McCarthy said. “And I think we’re all lucky to be part of this great aftermarket, and of this remarkable community that we have here today.”