Outlook Study: How the Canadian aftermarket is rebounding

The Canadian auto care sector remains resilient despite economic challenges, according to the latest insights from AIA Canada.

The Outlook Study, Edition 2024-2025 noted that growth in the automotive aftermarket will be driven by consumer demand for cost-effective services, the expansion of EV infrastructure and regulatory support for independent repair businesses.

The report analyzed the state of the Canadian auto care sector and provided insights into economic trends, employment and consumer behaviour.

Under the theme of Resilience in the face of economic uncertainty, it urged industry players to embrace technological advancements and workforce development to thrive in the evolving automotive landscape.

Under economic overview, AIA Canada reported that the Canadian auto care sector has rebounded strongly since the COVID-19 downturn. In those years and coming out of it, core auto care businesses have expanded, driving the industry to a record high economic output of $43.9 billion

During 2023, the auto care sector saw a slight contraction in employment, with the sector as a whole losing just almost 1,700 jobs. However, the losses were entirely in the non-core sector (general merchandise stores and gas stations, for example) with core aftermarket jobs gaining about 9,000 jobs from 2022.

Across Canada, there are more than 24,700 automotive repair and maintenance shops and nearly 5,000 parts, accessories and tire stores

“The small- and medium-sized enterprises continue be the backbone of the sector, with small enterprises (1-9 employees) representing 70.6 per cent of all auto care enterprises in Canada, while medium-sized enterprises represented 28.2 per cent nationally,” the report said.

When it came to consumer behaviour, the outlook examined what’s driving their decisions. It also looked at how much Canadians drove, noting significant fluctuations over the last several years.

After peaking in the third quarter of 2022, vehicle kilometres travelled have steadily declined. The study noted that pandemic restrictions, fuel costs and remote work trends have influenced this.

For full details and more on how the market has trended and where it could head, download the report from AIA Canada. It’s available only to AIA Canada members and is free to them.