Auto Service World
Feature   January 1, 2015   by Auto Service World


The just-released AIA Outlook study predicts a bright future ahead for Canada’s aftermarket, and that is, to my view, a pretty accurate assessment.
If I am to be totally honest, however, I didn’t actually need that report in order to come to this conclusion. This is not to say that it doesn’t fill in many important details about the whys and wherefores of the optimistic outlook for the near future – though it does – but the broad strokes of the positive trend should be apparent to anybody working in this industry.
At its core is the ongoing tie that this industry has to the trends in aging vehicle populations. The bulge in vehicle sales that occurred in the mid- to late 2000s has been moving its way through the aftermarket and this will continue to be a strong factor for at least the next couple of years.
The current state of vehicle sales, now at record levels for many automakers, will stand the aftermarket in good repair for the next wave of demand for its services.
The “sweet spot” for the aftermarket, seven- to 11-year-old vehicles, has continued to be just that, even though many in the aftermarket have seen a trend toward the older end of that age range for some time now; OEM components last longer than they did a couple of decades ago, even outliving their design life in some cases.
Of course none of this happens in a vacuum. As much as the aftermarket continues to be well positioned to serve that aging vehicle fleet, it is also the case that the original equipment service (OES) sector is doing what it can to win market share in the service bay and, failing that, market share in parts sales to the independent. This is nothing new, but independent aftermarket players do need to be mindful of the improving ability of OES players to market to their customers.
And then there is the price of gas. While business pundits have cast the drop in oil prices as an economic disaster for Canada, there is absolutely no doubt that the rank and file of the Canadian driving public have greeted the recent steep decline in the price at the pump with unabated glee.
While there is certainly some degree of wait-and-see in the public at large – few are running out to replace the subcompact they bought when prices went up with a full-sized SUV – it does present the kind of easing on the pocketbook that can increase the willingness of folks to get in their vehicle of choice and drive. For many the impact of changing gas prices has been more psychological than real, but even I can’t deny that a 40-cent drop in the per-litre cost becomes a very real benefit to the household bottom line.
And, if history is anything to judge by, over time that bottom line will translate at least somewhat into greater expenditures in the service bay.
Add to this related economic shifts, and things can look even rosier.
Yes, there are regional effects, some positive and some negative. For those reliant on the price of oil and the wages being paid as a result, the drop in employment that will result from the drop in oil prices will surely be a negative, though they might find hiring for vacant positions a tad easier.
And for Canada’s manufacturing sector, improved competitiveness and growth are sure to follow – and since the aftermarket relies strongly on the volume generated by them, it will help build demand.
So that’s good news too.
Maybe it’s just the advent of the new year, but I’m finding it difficult to find any negatives to bleat about; 2015 and beyond is looking good for the aftermarket.
It surely won’t be without its challenges, but I think we’re up to it, don’t you?
— Andrew Ross, Publisher and Editor

Print this page


Have your say:

Your email address will not be published. Required fields are marked *