While miles driven is still the strongest indicator for business growth post-recession, there are a number of other trends emerging that are affecting aftermarket sales. Even though miles driven show modest post-recession growth, they are still well below pre-recession levels. “Miles driven in 2014 was just a little bit better than expected, plus there was a little movement on price, and that’s why we are seeing 3.3% growth rather than the 2.3% that we had predicted,” explained David Portalatin of the NPD Group Inc., to a packed room at the morning Aftermarket Outlook session held at AAPEX. “The reality today is that we are driving 60 billion fewer miles than we were before the recession. That’s a big loss and a big hurdle to overcome since the recession. We can see that in the last five years or so, miles driven has come up but is not showing a sustained recovery. However, that being said, in the past year we are up 19 billion miles. Now just calculate how many oil changes 19 billion miles equals and you can see the significance of increased mileage,” says Portalatin. The three key indicators of aftermarket parts sales are miles driven, how consumers use their cars, and pricing of both new and used cars. “Studying 29 automotive categories, we tried to get a little more granular and get down to more details in the forecast to be more specific about drivers in the market. The reality is there have been some substantial changes in our work habits, with more people working at home or living closer to work. There have also been some generational changes. The millennial generation is less likely to get their driver’s license when they are 16 years old. Our research suggested that only 37% of millennials got their driver’s license at 16. This generation that is coming online is different than the boomer generation it is replacing,” explains Portalatin. “This market was built by 80 million baby boomers, with dual income lifestyles, driving two cars every day to and from work, vacations, shopping trips, etc. This generation created a car culture. Now as those baby boomers shift into lifestyle changes that include not working as much and driving much less, what we would like to see is the 75 to 80 million millennials who replace them, adopt the same behaviours. But the reality is they are on a different plane. They don’t start driving at the same age as boomers did, they don’t own cars at the same rate as boomers, and they live a more urban lifestyle. So even though we will see this group replace the boomer generation, which was the largest generation of drivers we’ve ever seen, I don’t think the millennials will be using vehicles at the same rate as boomers did,” said Portalatin. So what does this mean to jobbers? “You just cannot expect 3-4% growth every year. It’s just not there anymore. Thirty-five percent of the population is working closer to home or working at home, and many people are working less as, obviously, unemployment is higher than it was before the recession,” he added. The NPD Group’s data shows just 6% of vehicle owners are considering buying a new or used car next year. But the key data is the 62% who don’t plan on replacing their vehicle next year, which means they are going to be driving a vehicle that is another year older. Plus, there is a bit of difference in what consumers say and what they will do. “It’s really about intentions. There’s no way all 6% will buy a new car next year. A lot of people thinking new will go used too, so we will see 15 to 17 million new cars in 2015 and 40 million used cars purchased in 2015,” said Portalatin. “The used cars that consumers are buying today are different than the used cars they have bought in the past and I think it represents a new model,” continued Portalatin. “Consumers have fundamentally re-evaluated the way they think about the age of a car. A 10-year-old car is not even at the average age yet; that’s how much it has changed. The sweet spot is now much older than it ever was in the past. This is a huge opportunity for the repair business and it’s going to be around for a long time.” According to the NPD report, on average, people bought their used car when it was three or four years old, but as Portalatin points out, averages don’t always tell the whole story. There are cars in that average that are 20 years old, and the NPD Group commissioned a separate piece of research to go after these used car buyers to get more insight. People who bought three or so years ago bought a three- to four-year-old car. Four-year-old cars today are in short supply. Of the people who have bought a used car in the last three years, nearly a third of them purchased a car that is already 10 to 15 years old. A lot of people who own these older cars are millennials who don’t have a lot of money to spend, and they are also turning to online sites like YouTube to watch videos on how to fix/tweak their cars. “People are more willing to invest money today in older cars. They value older cars much more than they used to. Plus, when those purchases happen, there is a lot of spending that goes with it. The buyer might want to dress this vehicle up or might want to tweak this or check on that. The growing gap is in the 11-year-plus category. The sweet spot is changing and consumers are spending money on their used vehicles,” he adds. “Some owners of 11-year-old vehicles are looking to replace them in the next couple years. But, more than that, some are saying they are going to keep that car for three more years or longer. That raises the question, when they do replace the car, what will they buy?” said Portalatin. “Who buys a new car? People that already have a new car. You have two cohorts: the new car group and you have your old car group, and in the middle is the four- or five-year-old cars, but there’s not very many of them.” Cars are made better and they are lasting longer. Many are lasting well over 200,000 miles. Owners of 11-year-plus vehicles are much more likely to do some DIY work. “As we move into these older cars, we are investing in a value proposition that says, ‘I don’t want to replace my vehicle.’ When you ask people how much do you plan on spending to repair your vehicle? Most say, yeah, I will be spending at least $1000,” said Portalatin. Even though the millennial generation lifestyle is not as dependent on vehicle ownership as the boomer generation was, their affinity for older vehicles, regular maintenance, and customization bodes well for the aftermarket. The key is understanding this client base and communicating with them via smartphone apps and digital gathering places such as Facebook, YouTube, Twitter and Pinterest.