Parts proliferation is about to get worse

Image credit: Depositphotos.com

The number of products needed to service and maintain vehicles of all kinds is growing at a rapid pace. In fact, perhaps too quickly, warned a recent report.

Lang Marketing observed that light vehicle aftermarket parts proliferation is growing exponentially. It predicted that it will “soar over the next five years, increasing the inventory and logistical burdens shouldered by manufacturers, distributors, retailers and installers.”

Lang’s report, Parts Proliferation Hits Overdrive, highlighted four major factors pushing parts proliferation: Foreign nameplate growth, increasing vehicle age, advancing vehicle technology and economic pressures on consumers.

Foreign nameplates accounted for more than half of all U.S. consumer vehicles, a share that has grown by a quarter in the last decade. This surge means there are more and different types of vehicles in need of repair as they enter the aftermarket sweet spot. That means more parts are needed to service a wider variety of vehicles.

With lacklustre sales of new vehicles and used vehicles remaining expensive with low inventory levels,  consumers are hanging on to their older vehicles for longer. The increased longevity of ownership is also driving up vehicle age.

“Accordingly, the older vehicle-age range of parts that must be inventoried has increased significantly in recent years and will continue to climb,” Lang’s report said.

With added vehicle technology comes greater complexity around repairs. Small parts (vehicle components with special sensors and software) have increased by 500 per cent over the last 11 years, according to Lang.

“Over the next five years, vehicles with advanced driver assistance systems (ADAS) will soar at least eightfold,” it added. “Vehicle technology is adding significantly to the breadth of products that manufacturers, distributors, retailers and installers must handle to support the repair and maintenance of light vehicles.”

Consumers, meanwhile, are feeling economic pressures as inflation hits and a recession looms, all while they’ve seen increased interest rates.

So when visiting their local service shop, it’s no wonder why they move towards the ‘good’ side of the spectrum, rather than the ‘better’ or ‘best.’

“Consumer price sensitivity to auto parts is also fueled by the increasing number of older vehicles on the road, increasing demand for products that are serviceable but not necessarily ‘better’ or ‘best,’” the report said.

As a result, the aftermarket is now handling and ensuring an array of different quality parts inventory to meet changing consumer demands.

Lang also noted that these four factors will only intensify with time, increasing the burden on the supply chain.