The Canadian automotive aftermarket is in for steady growth over the next few years, according to the 2003 Outlook Study published by the Automotive Industries Association of Canada.
The Outlook Study is published biennially to provide information and resources to members for business planning purposes.
The total aftermarket is forecast to grow in real terms by approximately 1.6% in 2003 and 1.4% in 2004. By 2006, the rate of growth is seen as increasing to 3.3% a year. This return to growth marks a welcome departure from the market decline seen in the 1999-2001 period.
"This is a time of great opportunity and great change for the automotive aftermarket in Canada," says association president Ray Datt. "We encourage aftermarket executives to use the 2003 AIA Outlook Study to plan for the opportunities in the future, as well as to develop strategies for the challenges identified in the study."
The market growth forecast for the aftermarket is being driven by a number of factors. Principal among these is the structure of the vehicle fleet in Canada. At one end of the fleet structure, the large numbers of new vehicles sold in Canada over the period 1997-2002 will start working their way into their prime aftermarket years (5 to 12 years old).
At the other end of the spectrum, there are still a large number of units sold in the late 1980s that remain on the road. Both of these factors provide a positive stimulus to the aftermarket.
Within the overall mix of the 17 million units on the road, other changes can also be seen. The percentage of the fleet accounted for by light trucks continues to grow, as does the share held by import nameplates. From a product proliferation standpoint, the number of distinct models on the road continues to increase, as new players enter the market and product lifecycles are shortened.
Other demand side variables also remain positive. The number of Canadians of a driving age continues to increase, kilometres driven per year remains strong, and dollars spent per year on vehicle maintenance remains strong.
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